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The 30:30:30:10 Rule Of Retirement Planning

September 01, 2023


Saving money is a good practice, but creating a budget is not always simple. It can be intimidating for many people because it requires confronting their financial situation. Many people desire to plan for a comfortable and financially secure retirement. It helps to have a clear strategy in place to handle the difficulties of retirement planning. The 30:30:30:10 rule of retirement planning is one such technique, a blueprint that outlines how to allocate money at various phases of life to ensure a comfortable retirement.

What is the 30:30:30:10 rule?

The 30:30:30:10 rule is a technique that proposes how individuals should spend their income at various times of their lives to achieve a pleasant retirement. Let's break it down.

Category 1 - Housing: Housing, transportation, utilities, groceries, entertainment, and other day-to-day expenses are all included in this category. Aside from these charges, the costs of minor home repairs or the purchase of housing items are also covered.

Category 2 - Needs: This category includes all other basic costs besides housing expenses. Grocery bills, transportation costs, electricity bills, your children's school fees, the purchase of household goods and clothes, and fuel costs and taxes are all examples of needs.

Category 3 - Goals: As retirement approaches, it is advisable to devote approximately 30% of your income to securing your financial future. With the HDFC Life Pension Guaranteed Plan, you can also ensure a lifelong monthly income after retirement. Allocating a considerable amount of your earnings to future financial security assures that you will be well-prepared to maintain your desired lifestyle once you leave the workforce.

Category 4 - Wants: This category provides for freedom and enjoyment in the present while keeping a long-term financial goal in mind. It can be used for personal pleasures such as travel, hobbies, entertainment, or any other activity that brings joy and contentment.

How does it help you with retirement planning?

The 30:30:30:10 rule provides a framework for individuals to effectively and strategically manage their money to guarantee a successful retirement. However, it is critical to note that individual financial situations, goals, risks, tolerance, and time horizons should all be considered while developing a retirement plan. Because everyone's financial situation, ambitions, and risks are unique, the rule of thumb may not be perfect for everyone. Here's how this rule can assist in retirement planning:

1. Balanced and Stricter Budgeting: The rule stresses contributing 30% of one's income to current living costs. Furthermore, this guideline only allocates 10% of your income to demands and discretionary spending. It is more aggressive than other budgeting regulations in this sense.

2. Long-term Savings: Another 30% of revenue is devoted to financial goals, such as long-term retirement savings. By continuously putting a considerable amount of your salary aside for retirement, you can amass a sizable nest egg over time.

3. Secured Retirement Planning: As retirement approaches, the rule recommends dedicating 30% of income to financial stability. This includes boosting retirement account contributions and lowering outstanding debt.


Individuals can find a balance between covering current lifestyle needs, prioritising long-term savings, ensuring future financial well-being, and enjoying personal pleasures by adhering to the 30:30:30:10 rule. It fosters an organised approach to retirement saving and investing and helps individuals attain and retain financial discipline.

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ARN: ED/08/23/3977

Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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We at HDFC Life are committed to offer innovative products and services that enable individuals live a ‘Life of Pride’. For over two decades we have been providing life insurance plans - protection, pension, savings, investment, annuity and health.