Close
Close

Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak Guaranteed Fortune Builder

A plan that offers guaranteed income for your future goals. Know more

Kotak e-Term

Protect your family's financial future. Know more

Kotak Assured Savings Plan

A plan that offer guaranteed returns and financial protection for your family. Know more

Kotak Guaranteed Savings Plan

A plan that offers long term savings and life cover. Know more

Kotak e-Invest

Insurance and Investment in one plan. Know more

Kotak Lifetime Income Plan

Retirement years are the golden years of life. Know more

Close

Get a Call

Enter your contact details below and we will get in touch with you at the earliest.

  • Select your Query

Thank you

Our representative will get in touch with you at the earliest.

Mastering the 30:30:30:10 Rule: A Guide to Effective Retirement Planning

The 30:30:30:10 income and retirement rule provides you with a strategy to manage and invest your funds without compromising your current financial needs. Want to know more? Read ahead.

  • Jul 17, 2023
  • 2,009 Views

Updated on 17 July 2023

Are you also struggling with managing finances? Or run out of money by the end of the month? If yes, then this blog will help you manage your finances in a better manner by throwing light upon the 30:30:30:10 rule.

    Key Takeaways

  • Defining the financial goal is the first step toward retirement planning.
  • Early investments reap the maximum benefits post-retirement.
  • There is no one size fits all plan for financial planning, as everyone’s financial situation and goals are different.
  • A diversified investment portfolio is important to eliminate the risk involved with the investment.
  • Dynamic investment plan helps you modify your investment according to your current income and situation.

By investing and saving funds as soon as the beginning of regular income, you can get the maximum benefit by the age of retirement. Not just this, proper management of income gives you a buffer in a life full of hills and valleys. To understand the rules of saving and investment, you must read ahead.

Getting Ready for the Future

Better planning of funds is essential for bringing stability to life. Hence, it is said to start planning early in to reap the maximum benefits. However, most people struggle to manage their monthly income and can hardly save anything for future uncertainties. To solve this vicious cycle of income and expenses, you must have a look at the 30:30:30:10 rule, which is among the best retirement investment plan.

30:30:30:10 Rule for Retirement Investment

Long-term saving and investment are crucial for financial well-being, especially post-retirement, which restricts the source of income. The retirement saving 30:30:30:10 rule helps you invest income in an organized manner. It suggests investing 30% of savings into stocks, 30% in bonds, 30% towards real estate, and the remaining 10% in cash and cash equivalents. This gives birth to a balanced financial portfolio.

30:30:30:10 Rule for Income

Better management of finances helps you live a smooth life. Thus, it becomes important to prioritize your income. According to the 30:30:30:10 rule, you must devote 30% of your income to housing (EMI’S, rent, maintenance, etc.), the next 30% to needs (grocery, utility, etc.), another 30% to your future goals, and spend rest 10% on your “wants.”

For example: If you earn ₹1,00,000 per month, you should not spend more than ₹30,000 on EMI or rent of a house. The other ₹30,000 is on grocery and personal needs. The remaining ₹30,000 will be on future goals, and the remaining ₹10,000 will be on luxury or wants.

Plan Your Way

Before starting retirement planning, you must take into account the financial situation, goals, risks, and time horizon. There is no one size fits all plan for financial planning, as everyone’s financial situation and goals are different. General financial rules can provide you with a starting point, but for long term, you must adjust the plan according to your needs and circumstances. Therefore, a dynamic retirement plan is important that can be modified with time and situation.

However, retirement planning is a continuous process and not a one-time event. Hence, you must change planning with the change in income, expense, and market condition.

Benefits of 30:30:30:10 Rule

The 30:30:30:10 rule provides a base for long-term investment without compromising your current financial requirements. Here are a few benefits you can get by following the rule:

Usage of Funds

If you are investing your funds properly, you will have a financial buffer throughout your life. you can utilize the money in case of medical or financial emergencies in the family. Thus, an investment made toward the future never gets wasted.

Better Management of Finances

The 30:30:30:10 rule helps you manage your finances in a better way by allocating the percentage of income based on the priorities of life. This is one of the simplest ways to save and manage your income.

Diversified Portfolio

The rule of 30:30:30:10 for long-term investment allows you to invest your money in different investment options, such as stocks, government bonds, mutual funds, etc. By doing so, you eliminate the risk of major losses.

To Sum Up

There is no single great financial plan, as it depends on the individual’s financial goal, annual income, and circumstances. However, the 30:30:30:10 rule is one of the basic rules that can be followed by anyone who has started earning. It helps you build a consistent habit of investment which is useful for having financial stability.

Kotak Life Time Income Plan

Download Brochure

Features

  • 6 Plan Options
  • Tax benefits ^
  • Higher annuity rates for higher purchase price
  • 4 Annuity Modes

Ref. No. KLI/23-24/E-BB/1052

T&C

- A Consumer Education Initiative series by Kotak Life

Similar Articles

7 Best Guaranteed Income Plans 2023 in India Their Eligibility, Features & Benefits

Top 3 Reasons Why You Should Start Retirement Planning Early

What are the 4 Financial Phases of Retirement? How to Budget For Each One?

How To Check EPF Claim Status- The Complete Process

Importance of Retirement Planning

Reasons you should Buy a Retirement & Pension Plan

Meaning of Sum Assured in a ULIP

Types of Annuity Plan | Annuity Definition - Meaning & Key Benefits

How To Calculate The Present Value And Future Value Of Annuities?

Retirement: A New Start to Life!

Retirement and Pension Plans in India- What are Your Options?

14 Tips to Ensure Successful Retirement Planning

What are the Rules for Exit From NPS?

Important Questions To Ask Yourself Before Choosing A Good Retirement Plan

4 Tips to Avoid Running Out of Money in Retirement

Inflation: A Key Factor to Consider into Retirement Planning

Managing Your Money After You Retire

15 Passive Income Ideas for Seniors to Boost Retirement Income

What is an Annuity Plan, and How Does an Annuity Plan Work?

The Significance of Number 8,000 in Retirement Planning

The Rise of ESG Investing in Retirement Planning

Terminologies You Should Understand About Retirement Plans

What is a Defined Benefit Plan and How it Works?

Here's are Advantages of Pension Schemes and Retirement Plans

ULIPs or Pension Plans – Which is a Better Retirement Plan?

What are the Differences Between ELSS ULIP and Mutual Funds?

Types of Pension Plans for Your Retirement

Pension Funds In India – Meaning, Overview, How Do Pension Funds Work, Types, Pension Plan Features and Tax Benefits

Turbocharge Your Retirement Savings with Annuities: Unlock Greater Returns

Which are the Best Investment Plans for Indian Senior Citizens in 2022?

How Do Annuity Options Work In NPS

7 Secrets that can Make Your Post-Retirement Phase Prosperous

Benefits of Early Retirement Planning

3 Ways to Save Early to Keep Living Out Your Dreams Post Retirement

Changing Jobs? Reinvest Your Retirement Funds

Do Pension Plans Allow Any Death Benefits?

How to Protect Your Retirement Account from Hackers

What are the Charges Levied on ULIP?

Which Is Better: ULIP or SIP?

How to Calculate Your Retirement Corpus?

Plan Your Retirement in India - Retirement Calculator

Know the Pros and Cons of Retirement Annuities

How to Save for Retirement With Retirement Investment Plans?

Is an Annuity a Good Investment Option?

Retirement planning with a systematic life insurance plan

Guide to Long Term Investment

NPS for Housewife

Tips to invest your voluntary retirement scheme money

Top Investment Options for Retirement Planning

Benefits of Annuity Plan Investment

How Can NPS Help You Save Tax?

Getting Close to Retirement? Six Key Retirement Planning Tips That Can Help You Retire

Early Retirement Planning Tips

Retirement Planning: Use our Retirement Calculator to Plan Ahead

What are the Instruments Available for Building a Retirement Corpus?

What Are Superannuation Benefits?

How Has NPS Performed in Comparison with Other Instruments?

Understanding Annuity Plans

A Quick Guide to Retirement Plans

Retirement Planning at 50? You Are Still Good to Go

Embracing the FIRE Movement: Financial Independence and Early Retirement

Which Pension Plan Suits You best?

Importance of financial Planning for Retirement

Different Types of Retirement Schemes

How Much Corpus Does One Need for Retirement?

Ten Signs That You're Ready to Retire

What Are Retirement Pension Plans?

Retiring soon? Here’s why buying annuity plans may make sense

How should one decide on fund allocation within NPS?

Demystifying Retirement Financial Planning

Here's Retirement Planning Guide for Working Men & Women

Gift Your Parents a Sound Retirement Plan

ELSS vs ULIP: Which is a Better Investment?

Types of Retirement Plans

How to Maximize Your Retirement Savings with a Pension Scheme in India

5 Best Investment Options for Senior Citizens in India

What tax benefits are there on saving for retirement?

10 Steps to Figure Out How Much Money You Will Need For Your Post Retirement Plans

Why is it Good to Have a Retirement Plan Before Your Marriage?

What are the Benefits of ULIP - Explained

Retirement Planning for Millennials

Long-Term Investing: Boost Retirement Income with an Income Booster

Is it possible to live a financially independent life, even after you retire?

Types of Pension Plans and Their Tax Benefits

Turbocharge Your Retirement Savings with Annuities: Unlock Greater Returns

How To Choose The Right Pension Plan?

What is the Minimum Lock-in Period for ULIP?

What Are Mortality Charges In ULIP?

Benefits of Early Retirement Planning in India

Why Should Retirement Planning Be on Top of Your Priority List?

Steps to Figure Out How Much Money You Will Need After You Retire

How to Register An EPF Grievance Online

Here's Benefits of Post Retirement Investment Options

What Is A 401(k) Retirement Plan?: A Beginner's Guide

Mistakes You Must Avoid While Planning Retirement

What Retirement Would Look Like 30 Years From Now

What is the Difference Between EPF, VPF, and PPF? What are Their Tax Benefits?

Annuity Plan | How to Choose the Right Annuity Plan | Kotak Life

Is ULIP Better Than FD?

Retirement Planning Guide: These 5 Steps Will Help You Towards a Safe, Secure and Fun Retirement

How Does ULIP Work in India?

How Does NPS Work?

How to Win at Retirement Savings?

What is a Retirement Plan - What are its Features?

Right Age for Retirement Planning and How to Go About It

6 investment options for the retired

6 Signs That You Are Not Financially Ready For An Early Retirement