How much of your salary should you save and invest?

Short answer: save and invest at least 20% of your take-home pay, and more if you started late or have big goals ahead. On ₹1,00,000 a month that's ₹20,000. Invested and raised with your pay, it can grow to about ₹2.7 Cr in 20 years.

The exact number matters less than two habits: save a fixed share before you spend, and raise it whenever your pay rises.

Where a ₹1 lakh salary usually goes

The 50/30/20 rule splits take-home into needs (50%), wants (30%) and savings (20%). Real budgets in Indian cities rarely look like that, mostly because rent or a home EMI takes a big share.

If needs are over half your pay, trim wants first: eating out, shopping and subscriptions add up fast. In a big city a 60/20/20 split, with 20% still saved, is a fair target.

What each savings rate grows to

Say you invest a fixed share of a ₹1,00,000 take-home and raise it 8% a year as your pay rises, earning 10% a year:

The last column matters. At 6% inflation prices more than triple in 20 years (retail inflation was 4.38% in June 2026, lower than its long-run average^[1]), so a big number then buys much less than it sounds.

How much should you save?

• Starting out, in your 20s: 15–20%, even if wants feel tight. Time does most of the work.
• With a home loan or children: keep at least 20%, counting EPF and PPF contributions.
• Starting after 35, or the only earner: 30% or more. How much money you need to retire shows why.
• After every raise: save at least half of it. Your lifestyle still improves, and your savings rate climbs.

Save in the right order

1. Emergency fund. 6 months of needs is ₹3.3 L here. At ₹18,000 a month it takes about 19 months to build. See how many months to keep.
2. Costly debt. Clear credit cards and personal loans before investing.
3. Insurance. Health cover for the family, and term cover if anyone depends on your income.
4. Goals. Retirement, a home, children's education. How much to invest in a SIP every month sizes each one.

Automate it: a SIP or transfer on salary day moves the money before you can spend it.

What this doesn't mean

• Returns aren't guaranteed. 10% is an assumption for a mix of equity and debt over the long run.
• Savings rate isn't everything. Someone saving 15% of a high income may save more rupees than someone saving 30% of a low one. The rate shows whether your lifestyle leaves room to grow.
• Rules of thumb are a start. Your own goals and dates decide the right number.

Take-home pay after tax; savings invested at the start of each month and raised 8% a year; 10% a year return; 6% inflation for today's money. For illustration only, not investment advice.