{"id":12118,"date":"2020-10-19T07:14:10","date_gmt":"2020-10-19T07:14:10","guid":{"rendered":"\/blog\/?p=12118"},"modified":"2021-12-02T06:23:28","modified_gmt":"2021-12-02T06:23:28","slug":"what-percentage-of-your-income-should-you-save-at-every-age","status":"publish","type":"post","link":"https:\/\/tata-blog.osian.dev\/moneyfy\/investment-guide\/what-percentage-of-your-income-should-you-save-at-every-age\/","title":{"rendered":"What percentage of your income should you save at every age?"},"content":{"rendered":"\n

As you move across\nthe various stages in life, your financial goals and dreams may also keep\nchanging. You\u2019ll have a different target to achieve at each stage. This is why\nit becomes extremely important to draw up an adequate savings plan and stick to\nit. However, this is often easier said than done, primarily because most people\nhave little to no idea about how much to save. If you\u2019re in the same boat, then\nthis guide will help you chalk up an age-related savings framework.<\/p>\n\n\n\n

How much to save at every age?\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong><\/h2>\n\n\n\n

Before we move on,\nit is important for you to understand that these values and percentages of\nincome are merely averages. Technically, there are no clear-cut rules with\nrespect to the percentage of income that you should save at every age, since it\nbasically depends on your individual financial goals and objectives. The\nfollowing pointers are only meant to serve as a guidepost that can help you\nchart out your own plan.  <\/p>\n\n\n\n

By the time you reach 30<\/h3>\n\n\n\n

There have been\nextensive surveys and informal researches conducted by various investment\nmanagement companies such as Fidelity and T. Rowe Price. According to these\nstudies, by the time you reach 30 years of age, you should ideally have around\n50% to 100% of your current yearly salary saved up. <\/p>\n\n\n\n

For instance,\nassume that you\u2019re 25 years of age drawing a yearly salary of around Rs.\n3,00,000. By the time you reach 30, you should have ideally saved up around 50%\nto 100% of your current salary, which comes up to around Rs. 1,50,000 to Rs.\n3,00,000. <\/p>\n\n\n\n

While reaching this\nfigure is important to be able to satisfy your financial objectives, the number\none thing that you should focus on when you\u2019re in your 20s is to get rid of your\ndebt. By paying off your debts early, you can save up a larger portion of your\nincome in the years to come.  <\/p>\n\n\n\n

Additional\nRead:<\/strong> <\/strong>How\nand where to keep an Emergency Fund?<\/a><\/p>\n\n\n\n

By the time you reach 40<\/h3>\n\n\n\n

Here\u2019s when things\nstart to pick up. When you\u2019re in your 30s, you will most likely be earning at a\nfaster rate than when you are in your 20s. So, ensure that you make full use of\nthis period for saving up and building your corpus. As a rule of thumb, by the\ntime you reach 40 years of age, you should have around 200% to 300% of your\ncurrent yearly salary as savings. <\/p>\n\n\n\n

Let\u2019s take up the\nprevious example once again. By the time you reach 40, you should have saved up\n200% to 300% of your current salary of Rs. 3,00,000, which would come up to\naround Rs. 6,00,000 to Rs. 9,00,000. <\/p>\n\n\n\n

Ideally, by the\ntime you reach 40, you should have paid off all your existing debt. However, if\nyou find yourself in debt even by this age, then ensure that no more than 20%\nof your income goes towards paying them off. \n<\/p>\n\n\n\n

By the time you reach 50<\/h3>\n\n\n\n

By this age, your\nsavings corpus should have grown tremendously. Additionally, you would also\nmost likely be in a senior position in your organization, with a significant\nincrease in your salary. And so, by the time you touch 50 years of age, your\nsavings should have increased to around 500% to 700% of your current salary. <\/p>\n\n\n\n

Using the same\nexample, let\u2019s try to compute just how much you should have saved. By this\ntime, you should have around Rs. 15,00,000 to Rs. 21,00,000 as your savings.<\/p>\n\n\n\n

By the time you reach 60     <\/h3>\n\n\n\n

As your retirement\nfast approaches, your 50s are the perfect time for you to cut down on your\nexpenses and focus on your savings aggressively. This way, you would be able to\nmaintain your current lifestyle even after you\u2019ve retired and lost your primary\nincome source. Furthermore, your 50s would most likely be the years where you\nearn the highest. And so, it makes sense to increase your savings multifold.\nIdeally, you should have saved around 800% to 1,100% of your current salary by\nthe time you touch 60.<\/p>\n\n\n\n

Going by this\npercentage of saving, this would mean that you would have had to save around\nRs. 24,00,000 to around Rs. 33,00,000.    \n<\/p>\n\n\n\n

Additional\nRead:<\/strong> <\/strong>Is\nELSS a Wealth Creation & Tax-Saving Tool?<\/a><\/p>\n\n\n\n

Conclusion<\/strong><\/h2>\n\n\n\n

Now that you know how much to save, there\u2019s another major point that you should make note of. The above-mentioned age-related savings framework are merely rules of thumb that can be flexed around a little. Always remember, these guidelines only serve to help you put things in perspective. To save up adequately, you need to diversify your investment portfolio. And here\u2019s where the Moneyfy app by Tata Capital can help. You can use the app to start SIPs, invest in equity mutual funds, governmental bonds, liquid funds, insta redemption funds and more from the comfort of your smartphone. That\u2019s not all. You can even account for your investment horizon, keep an eye on your portfolio, and instantly redeem your funds if needed using the Moneyfy App<\/a> by Tata Capital. <\/p>\n\n\n\n

Download Moneyfy App<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"

As you move across the various stages in life, your financial goals and dreams may also keep changing. You\u2019ll have a different target to achieve at each stage. <\/p>\n

Read More<\/a><\/p>\n","protected":false},"author":1,"featured_media":12120,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[68],"tags":[],"class_list":["post-12118","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investment-guide"],"yoast_head":"\nSavings by Age: Percentage of your income you should save at every age - Tata Capital Blog<\/title>\n<meta name=\"description\" content=\"Wondering just how much to save? Simple thumb rule for savings: Savings by Age. Here\u2019s an age-related savings framework that can help you out. 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