Finance

4 Important Tips Every NRI Needs to Know About Retirement Planning

NRI retirement planning: Here's a step by step guide for NRIs to retire rich - The Economic Times

As a youngster, you may have several aspirations in life and you may accomplish your goals slowly and steadily. Similarly, one of the most common goals that everyone of us have is to live a similar lifestyle, if not better, after we retire. As an NRI (Non-resident Indian), you would have to take several retirement decisions, and plan your finances well to make this dream a reality.

As an NRI, if you wish to settle down in India post-retirement, retirement planning is critical for you than a local resident. And, with a little bit of forethought, you can make the work for you and build a decent corpus. Here are a few retirement planning tips for NRIs that you must know.

Determine when, where and how

The first step in retirement planning is asking yourself a few critical questions. Firstly, you must decide where you want to retire. Although you may not currently reside in India but would want to eventually settlement down there. Many people decide to spend their retirement life in India as the increased purchasing power of the money they earn from overseas means they can enjoy a better retirement lifestyle.

Secondly, you must decide when you want to retire. This is a critical decision and it will influence your investment choices. Nowadays, many people prefer retiring early so that you can enjoy doing things that they cannot do otherwise due to commitments. Irrespective of when you want to retire, it is advisable to start investing towards retirement from an early age as it allows the money to grow with compound effect.

Lastly, how you want to retire is entirely up to you. Depending on the lifestyle you want to enjoy, you can save money retire early and live a simple life. The most common way of retirement planning is to invest a small amount every month towards to the retirement fund. You may have a pension fund in the country of your current residence, which you can transfer to an INR annuity.

Have a fixed goal

Everyone has certain retirement goal. For example, you may want to build a house in your favourite holiday destination and live the rest of your life there. Or you may want to leave behind a big corpus for your family. Irrespective of the goal, you must start planning for it from an early age.

Choose the right investment plan

If you do not have a pension fund in the country of your residence, you can start building your portfolio in India. And, some of the investment schemes, you can have in your profile, include:

  • Mutual funds – you can invest in various mutual fund schemes and monthly income plans to suit your financial goals and risk-taking ability.
  • Equity – You can invest in various equity-oriented funds through and account linked to your NRE or NRO bank account
  • FD – A fixed deposit is an excellent scheme to have in your portfolio. You can link your FD to NRE account to get tax-free interest.
  • NPS – This is another excellent scheme for building retirement corpus. It allows you get tax benefits as well as inflation adjusted returns.

Avoid the common errors

Remember, retirement planning is not a one-time thing, it is a continuous process. And, to build a significant retirement corpus, you must start investing from an early age and remain consistent with it. The sooner you start, the harder the money will work for you.

Make sure to account for investment risk while planning your retirement. A high-risk portfolio may yield high returns, but as you near the retirement age, it is better to invest in secured schemes that provide assured pay out like monthly income plans.

Final Word

The key to successful retirement is planning your investments from an early age. Do your research well about any scheme you choose to invest and make sure that you invest in scheme that aligns with your goals.

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