What Is The 30-30-30-10 Rule? How Can It Help You Build A Retirement Corpus?
Suppose your monthly salary is Rs 50,000 - read to know how you can implement the 30-30-30-10 budgeting strategy to build a retirement corpus
Suppose your monthly salary is Rs 50,000 - read to know how you can implement the 30-30-30-10 budgeting strategy to build a retirement corpus
Retirement Plan
Advertisement
Individuals bear many demands on their income, from basic to discretionary expenses. It’s easy to overlook the need for a systematic expenditure that includes saving for the future. What if there was a straightforward method to help you balance your present needs with your future financial goals? The 30-30-30-10 rule is a simple yet powerful financial strategy to help you build a secure and comfortable retirement.
Also Read: Public Vs Private Charitable Trusts: How Do They Differ, Which One Should You Opt?
Advertisement
Under this rule, you devise a percentage-based budgeting mechanism that limits expenses across multiple essential categories.
Break down of earnings as per the 30-30-30-10 rule:
Advertisement
As per the breakdown above, you commit a hefty amount, almost 30 per cent of your income, to your investment plans and savings instruments. This is quite a large and sufficient segment dedicated to savings every month.
Also Read: Estate Planning: 6 Factors You Can’t Afford To Ignore
Let’s look at this example to understand:
Suppose your monthly income is Rs 50,000.
This is how your income will be divided across categorical expenditures as per the 30-30-30-10 rule:
This would create a discipline or routine that helps you save regularly. If you invest carefully in instruments that offer decent returns, you can easily amass a sizeable corpus for your retirement.
Further, this rule can streamline the money at your disposal and inculcate financial discipline such as a structured saving approach, debt management, emergency preparedness via hefty savings/investments, and a long-term focus by regularly contributing to retirement accounts.
Advertisement
Retirement planning isn't only about saving money; it is smart allocation, diversification and letting compounding do the heavy work on your investments.
To ensure financial security at retirement, consider investing in assets that have historically provided inflation-beating returns, such as mutual funds, stocks, real estate, etc.
According to the 2011 census, the number of people aged 60 and above in India is expected to reach 178.59 million by 2031 and 300.96 million by 2051
Get all the latest stories delivered to your inbox
Advertisement
Get all the latest stories delivered to your inbox