Starting A New SIP in 2026? Learn How To Set Your SIP Amount Based On Age And Factoring in Income

Your SIP amount does not have to stay the same throughout your life. As your income, expenses, goals, and responsibilities change with age, your SIPs can also change to keep pace. That’s why considering your age and income levels can help decide how much to start investing and whether you can gradually increase your contribution over time.

Starting a new SIP in 2026 can feel simple at first, until you start thinking about how much to invest and where to invest. Your age can influence the time available for different financial goals, while your income helps determine how much you can realistically invest after taking care of your regular expenses and commitments. 

So, if you’re figuring out how to start SIPs in 2026, looking at age and income together can be a useful starting point.

Here’s why age and income play a vital role in new SIP planning:

• Your Age

Your age determines how long you can stay invested - in other words, your investment horizon. Starting at a young age means you still have years until major life goals like retirement. This also means you might be able to remain invested in the market for longer, allowing your SIP investments to compound and grow over time. 

• Your Income

Your income is equally important because it determines how much you can realistically invest and still meet your existing obligations. 

Now, how to start SIPs as per your age? Firstly, there is no definite rulebook when it comes to starting SIPs as per your age. But it’s safe to say that for most of us, our responsibilities and goals tend to change with age. The idea is that the SIP should match these changes.

Here’s an illustrative example of how SIPs may change with age:

*Views Disclaimer: The above information is illustrative and represents general views for investor education purposes only. It should not be construed as investment advice, a recommendation, or a prescribed asset allocation. Investment decisions should be based on individual goals, risk appetite, investment horizon, and financial circumstances. 

Now, coming to income, there are two sets of thumb rules (guidelines only) you may use to understand how to start SIPs. Let’s see what they are:

1. Using the 50-30-20 Rule

The simplest way to decide your new SIP amount is using the popular 50-30-20 budgeting rule. According to this rule, you use your post-tax income in the following way:

• 50% for essentials like rent, bills, etc.
• 30% for personal wants like dining out, shopping, etc.
• 20% for savings and investing

For example, suppose your monthly post-tax income is Rs. 50,000. Based on this rule:

• Rs. 25,000 would go towards essentials
• Rs. 15,000 would go towards wants
• Rs. 10,000 would be used towards savings and investments

Now, you can choose to start a new SIP with this Rs. 10,000 or break it up into multiple smaller SIPs in different funds. Or, you may divide this amount between an emergency fund, mutual fund SIPs, and other savings or investments based on your goals and financial situation.

2. Stepping Up SIPs with Income Growth

Step-up SIPs allow you to increase your SIP investments as your income grows. This helps your SIPs keep pace with your income increase. Plus, contributing more every month also increases the compounding base to accelerate potential growth over time.

For instance, suppose if you would have invested Rs. 8,000 per month for past 5 years through a regular SIP in equity funds. Your total investment would have been Rs. 4.8 lakh, which would have grown to approximately Rs. 6.25 lakh, assuming a 10% annual return.

Now, if you had increased the SIP by 10% every year, you would have invested around Rs. 5.86 lakh over the same period. At the same assumed 10% return, the corpus would have grown to approximately Rs. 7.48 lakh. This illustrates how gradually increasing your SIP can add to the corpus over time.

Note: Mean of 10-year rolling returns between 01/06/14 and 31/05/24 for Nifty 50 is CAGR 12.42% & Sensex is CAGR 12.62%. Past performance may or may not be sustained in future and is not a guarantee of any future returns.

*Disclaimer: The figures are illustrative and based on an assumed 10% annual return. Actual mutual fund returns are market-linked and may vary; they are not guaranteed.

Here are a few key strategies that might help you plan how to start SIPs better vis-à-vis your age and income:

• Use an SIP calculator

Enter your SIP information like your new SIP amount, tenure, and expected rate of return to estimate your total corpus. This may help you plan for specific goals at different ages and income levels better.

• Map your new SIPs to goals

Starting a new SIP isn’t enough. You should link it to a goal like buying a home or going on a trip. Linking SIPs to goals may help you stay disciplined and motivated.

• Check ongoing SIPs

Before you start a new SIP, check how many ongoing SIPs you have and factor that into your current income levels. For instance, if your income is Rs. 50,000 and you already have SIPs worth Rs. 7,000 on, the total amount available for new SIPs will be Rs. 3,000 (as per the 50-30-20 rule). 

• Review periodically

Check your SIPs periodically to see how they are performing. But remember not to make emotional decisions based on daily NAV fluctuations.

If you’re wondering how to start SIPs, one way to approach it is through your age and income. Your life stage can provide context for your goals, investment horizon, and ability to take risk, while your income can help you decide how much you can realistically invest.

However, age and income are only starting points. Your SIP amount and fund selection should ultimately reflect your financial goals, risk appetite, existing commitments, and investment timeline.

1. What is a good SIP amount for a 25-year-old?

As such, there is no ‘good’ SIP amount for a 25-year-old investor. It entirely depends on your income, living expenses, existing emergency fund, and financial goals.

2. How much of my salary should go towards SIPs?

There is no universal salary percentage that will be suitable for all investors. A general thumb rule is to use 20% of your salary for savings and investing. However, this too is just a general guideline. How much you actually invest depends on your financial stability, existing responsibilities, and other factors.

3. Why should I increase SIPs over time?

Raising your SIPs periodically as your income grows can help potentially achieve your financial goals faster, as the extra amount also keeps compounding. Plus, stepping up SIPs may even help potentially cushion the impact of inflation on your corpus.

4. Should I start a new SIP when the market is down?

You can start a new SIP at any time - including when the market is down. SIPs are created to invest regularly regardless of market conditions. Starting an SIP when the market is falling is particularly beneficial as you may buy more units at a cheaper cost. 

An Investor Education and Awareness Initiative by Tata Mutual Fund . 

To know more about KYC documentation requirements and procedure for change of address, phone number, bank details, etc., please visit: https://www.tatamutualfund.com/deshkarenivesh

Please deal only with registered Mutual Funds, details of which can be verified on the SEBI website under ‘Intermediaries / Market infrastructure institutions.’

All complaints regarding Tata Mutual Fund may be directed to service@tataamc.com and/or https://scores.sebi.gov.in/ (SEBI SCORES portal) and/or https://smartodr.in/login

Nomination is advisable for all folios opened by an individual, especially with sole holding, as it facilitates an easy transmission process. 

This communication is a part of the investor education and awareness initiative of Tata Mutual Fund.