Have a net worth for yourself?

Do you always wonder if you are on track for a relaxed financial future? And, are you just getting started with your career? The most important thing in your mind would be the student loan and job. At this stage in life, you probably would not be worrying too much about saving, however, a little financial planning will help you have a secured future during your retirement days.

One way to achieve a secured future is by increasing your net worth by age. Periodically ensure that you are increasing your savings to increase your net worth. In simple terms, net worth is calculated by adding all your assets and cash and subtracting your debts. Have net worth targets that you want to achieve at each age.

In your 20s

You are just graduating and entering your first job, and probably have a student loan to pay off. Do not worry as your net worth might be negative. This is the best time to start focusing on building your net worth and coming out with a plan for future. Start saving from your first job itself, and you’ll know that you’ve made the best decision during your retirement when you see the money grow multifold. As part of your salary, most companies invest in Provident Fund. This contribution by you and your employer forms part of your retirement savings scheme.

You can also invest in a Public Provident Fund (PPF); it is a voluntary contribution by you. There are two advantages for investing in a PPF – Tax Saving and it is a long-term investment. The part of these retirement schemes in that money grows and gets compounded until you withdraw during your retirement. Aim to save at least 10% towards your retirement.

Equity and Mutual Funds can be other avenues that you can explore at this age when your risk appetite is high.

By 30

Aim high – to have a high net worth. By this age, aim to hold an amount equal to at least 50% of your salary in your retirement account. Simultaneously aim to achieve your short and mid-term goals by investing in other avenues. Mutual Funds are great investments for medium-term goals. Systematically invest part of your salary in Mutual Funds to meet dreams your and your family’s dreams. For example, save for your family holidays, to buy a car, a home or for your kid’s education.

By 40

Aim to have a net worth that is twice your annual income. Owning a real estate property would help you grow your net worth. Investing in real estate would grow your small down payments exponentially, as the value of your house increases. Have an emergency fund for all the unforeseen event that may take place. Do not neglect this one. These savings will help you during retirement if unused.

By 50

Aim to have a net worth that is 4 times your annual income. The figures might bizarre you, but starting your investing at a very young age would help the money compound over time. If you start late, have an aggressive approach toward your investments.

With age, responsibilities increase. Your kids would be growing up and so are the skyrocketing education expenses. With an aim to give only the best to your kids, do not compromise on your retirement funds. Have different investments for your kids and make sure you are earning enough to achieve your goals. Else, look for other sources that help you earn some extra bucks.

By 60

With all the goals and investments under control, by this age, your net worth should be around 6 times your annual income. Going forward your net worth depends on the way you choose you to live your life during retirement. In other words, if you want to continue to stay where you are or move to a countryside peaceful home or spend time in exploring the world and ticking off things on your bucket list. A common rule of thumb is to replace 85% of your working income in retirement.


We all struggle towards having a secured and peaceful retirement. Therefore, make sure you have a realistic approach towards your lifestyle upon retirement and invest systematically towards it. Starting early in life, this will help you build a good net worth for yourself and have a well-planned life.


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