How A One-time Investment Can Pay You ₹3.13 Lakh Monthly For 30 Years

Many people dream of earning a consistent monthly income without actively working for it, especially after retirement. While this may seem ambitious, financial experts suggest it’s achievable with the right strategy and patience. A one-time investment in a mutual fund, when allowed to grow over decades and coupled with a Systematic Withdrawal Plan (SWP), could create a reliable monthly income stream for 30 years. Let’s understand how this transformation from a single investment to decades of passive income could unfold.

Phase One: Building A Corpus With Long-Term Investment

The first phase focuses on the compounding power of a long-term mutual fund investment. Suppose an individual invests ₹18 lakh in a mutual fund scheme that yields a 12% annualised return. According to financial planners, letting this investment grow uninterrupted for 30 years could result in an estimated corpus of approximately ₹5.39 crore.

This calculation banks on the principle of compound interest, where returns themselves begin to earn returns over time. By the time the investor turns 55 (if the investment began at age 25), this patient approach could result in a substantial wealth pool — ideal for funding post-retirement needs.

Tax Considerations On Long-Term Gains

Before tapping into the generated corpus, one must account for taxation, particularly Long-Term Capital Gains (LTCG) tax. Under current tax rules, LTCG from mutual funds are taxed at 12.5% after an exemption of ₹1.25 lakh. In this scenario, the taxable capital gain is about ₹5.20 crore, leading to a tax liability of approximately ₹65 lakh.

After paying the LTCG tax, the investor is left with a post-tax corpus of around ₹4.74 crore. This amount becomes the foundation for generating monthly income in the second phase of the plan.

Phase Two: Deploying Corpus Into Income Through SWP

The second phase involves reinvesting the post-tax corpus into a mutual fund that prioritises regular income — typically a hybrid conservative or debt-oriented fund with an expected annual return of around 7%. By initiating an SWP (Systematic Withdrawal Plan), the investor can begin receiving a fixed monthly income.

Based on estimates, a corpus of ₹4.74 crore can potentially yield a monthly payout of ₹3,13,700 for a duration of 30 years. This transforms the one-time investment into a reliable income stream without exhausting the invested capital prematurely.

Monthly Income Projection And Sustainability

Over the 30-year withdrawal period, the total estimated amount withdrawn through SWP could be approximately ₹11.29 crore. Even after these withdrawals, a small balance may remain, showcasing the sustainability of such a well-planned strategy.

This monthly income can cover retirement expenses, healthcare, and lifestyle needs without compromising the principal investment too early. The structure also ensures that the investor does not have to depend solely on pension or rental income in later years.

The Role Of Patience And Discipline In Wealth Building

Financial advisors often stress that such a model works best for individuals who are not chasing short-term market highs. It requires discipline to avoid early withdrawals and patience to let the corpus grow. Regular review of the investment and minor adjustments may be necessary to keep it aligned with risk appetite and market changes.

Not A One-Size-Fits-All Model

It’s important to recognise that this strategy may not be suitable for everyone. Risk tolerance, financial goals, tax policies, inflation, and actual fund performance will influence the final outcome. Consulting a certified financial planner before initiating such a plan is crucial to tailor it to individual needs and life goals.

This approach highlights how a one-time decision, when backed by long-term vision and sound financial tools, can turn into decades of consistent monthly income. With proper planning, taxation awareness, and the right fund selection, a single ₹18 lakh investment can potentially support a worry-free retirement through regular income.

Disclaimer: This article is for informational purposes only. It does not constitute investment advice. Please consult a qualified financial advisor before making any investment decisions. Calculations are based on assumed growth rates and current tax rules, which are subject to change.