Monthly Savings Target Calculator

## What is the Monthly Savings Target Calculator? The Monthly Savings Target Calculator helps you understand how much of your monthly income you should save and invest to build long-term wealth. It goes beyond the standard save 20% of income advice by factoring in your specific financial goals, expected investment returns, and current savings. ## Formula Used Future Value of SIP = P x [((1+r)^n - 1) / r] x (1+r) To find monthly target from a wealth goal: Required Monthly Saving = Goal Corpus x r / ((1+r)^n - 1) / (1+r) Where r = monthly return rate n = total months ## Worked Example Monthly income: Rs 1,00,000, Target wealth: Rs 50 lakh, Expected return: 12% p.a., Tenure: 20 years (240 months) r = 12/12/100 = 0.01 monthly Required monthly saving = Rs 50,00,000 x 0.01 / ((1.01)^240 - 1) / 1.01 Required monthly saving = Rs 8,500/month (0.8% savings rate — very achievable!) Projected corpus: Rs 50,50,000 ## Frequently Asked Questions 1. What is a good savings rate for Indian households? A good savings rate depends on income level and life stage. For mid-career professionals: 20 to 30% of gross income is a healthy target. For high earners (Rs 2 lakh+/month), 40 to 50% is achievable. 2. How much should I save per month for retirement? A simple target: save 15% of your monthly income toward retirement starting at age 25. For a Rs 1 lakh/month income, that is Rs 15,000/month. 3. Is it better to save more or invest more? A practical approach: first build your emergency fund (savings), then maximize tax-saving investments (PPF, NPS, 80C), then invest the rest in growth assets (equity mutual funds). 4. What happens if I delay saving by 5 years? The cost of delay is significant. Saving Rs 10,000/month for 25 years at 12% = Rs 1.57 crore. Starting 5 years later means 20 years: Rs 31,17,000 — you lose Rs 1.26 crore (80% of the corpus) simply by delaying 5 years. 5. Should I save first or invest first? Automate investments via SIP on salary day so you pay yourself first before discretionary spending. First build emergency fund (savings account), then tax-saving investments, then remaining income for spending and long-term investing.