Financial experts are challenging the conventional wisdom about mutual fund investment percentages, with Rhishabh Garg, CEO of FundsIndia.com, stating there is no single number that fits everyone. According to reports from Mint, Garg recommends starting with 20% of monthly income initially and gradually increasing to 30% over time. Nitin Agrawal, CEO of Mutual Fund by InCred Money, agrees that the exact percentage should be guided by age, income stability, liabilities and financial goals rather than income alone. The experts emphasize that working backwards from specific financial goals is more effective than picking arbitrary percentages.
Experts recommend adjusting investment amounts based on income growth rather than maintaining fixed percentages. As reported by Mint, Garg recommends increasing mutual fund investments by at least 10% every year to keep pace with rising incomes. Agrawal points to the concept of a step-up SIP where investors increase their SIP amount annually in line with income growth. The experts caution against allowing all salary increments to be absorbed by higher spending, instead recommending that a portion of every increment goes towards investments before lifestyle upgrades.
Before increasing equity investments, experts strongly advise building a liquidity buffer. According to Mint reports, Garg recommends maintaining funds equivalent to around six months of essential expenses in a savings account or liquid fund before directing additional surplus towards long-term investments. Agrawal recommends maintaining three to six months of essential expenses, with larger buffers for households with variable incomes, dependents or ongoing EMIs. This protects investors from having to sell equity investments at inopportune times during emergencies.
The latest data reveals Americans now believe they need $1.46 million to retire comfortably, representing a 15% increase from the previous year's target of $1.26 million. According to the Northwestern Mutual 2026 Planning & Progress Study, this matches the 2024 record high, with four key forces driving the increase: persistent inflation raising healthcare costs to approximately $172,500 for a 65-year-old, longer lifespans with more than 27% expecting to live to 100, Social Security uncertainty with the trust fund projected to be depleted by 2032, and AI-related career concerns. The gap between perception and reality is stark, with median retirement savings for Americans aged 55-64 at just $185,000, representing only 13% of the target amount.
