How much percentage of body fat is good for health and why?

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It depends on the person's needs, sex, and age

1. Needs

An athlete would have very little need for body fat. 21-25% is fairly okay (less than 21 is considered underfat)

Generally, 21-35% is considered healthy

2. Sex

Females generally have more body fat than men. When working on increasing or reducing body fat, you should consider your gender. It's okay if as a female you weigh more than the males in your age bracket (as long as you stay within the healthy range)

3. Age

Newborns need a lot of body fat to help with the cold (especially if you stay in cold regions). Most children shed off their body fat as they grow up so you generally only have to bother about their diet