A common starting rule is 20% of your take-home pay into SIPs, raised to 25–30% in your 20s (fewer obligations) and eased to 15–20% in your late 30s–40s once EMIs and school fees show up. The right number for you depends less on a fixed percentage and more on how many goals you're funding and how far away they are.
Generic advice treats SIP as one lump sum. In practice you're usually funding several goals at once — retirement, a child's education, a house down payment, a car — each with a different horizon and risk tolerance. A flat 20% might be too little at 26 and debt-free, or unaffordable at 34 with an EMI eating 35% of income.
A more useful way to size it: list every goal, its target amount, and years to go, then work out the SIP each one needs (assuming ~11–12% for equity, ~6–7% for debt-heavy goals). Add them up — that total, not a round percentage, is your real number.
| Life stage | Typical monthly obligations | Suggested SIP % of take-home |
|---|---|---|
| Early 20s, no dependents | Rent, basic expenses | 25–35% |
| Late 20s–early 30s, married, no EMI | Rent/EMI, insurance | 20–25% |
| 30s–40s, home loan + kids | EMI, school fees, insurance | 15–20% |
| Late 40s+, catching up | Lower EMI, higher income | 20–30%+ |
These are ranges, not targets — under current rules there's no tax or regulatory definition of a "correct" savings rate. Treat the table as a sanity check against your goal-based number, not a replacement for it.
Two mistakes show up constantly:
A goal-based plan (like the 6-step plan in this app) runs this calculation goal-by-goal automatically, rather than leaving you to guess at one flat percentage.
Q. Is 20% of salary always enough for retirement?
A. Not necessarily — it depends heavily on when you start. Starting at 25 with 15–20% can outperform starting at 35 with 30%, purely from extra compounding years.
Q. Should the percentage be of gross salary or take-home pay?
A. Take-home (post-tax, post-EPF) is more realistic since that's the cash actually available to allocate. Using gross salary tends to overstate what you can actually invest.
Q. What if I can't hit even 15%?
A. Start with whatever is sustainable — even 5,000 a month — and use a step-up SIP to raise it 10% each year as income grows. Consistency for longer beats a higher amount started late.
Q. Does this percentage change once a goal is close?
A. The total percentage can stay similar, but the mix should shift — money for a goal 1–2 years away should move from equity into debt, regardless of the rest of your SIPs.
Plan Our Future · AMFI-registered Mutual Fund Distributor (ARN-360754). Mutual Fund investments are subject to market risks, read all scheme related documents carefully.