How Much Do NRIs Need for a Comfortable Life in India?

Meet Ramesh and Anjali – Returning After 15 Years Abroad

Ramesh and Anjali Mehra are a typical NRI couple you might relate to. They’ve been living in Dubai for over 15 years. Ramesh works as a finance professional in a logistics firm, while Anjali teaches at an international school. Over the years, they’ve built a stable life abroad — good income, decent savings, and a community of friends. But now, they are looking for retirement planning.

Because lately, things have changed. Ramesh’s parents in India are ageing and need more attention. Their kids — Aryan (12) and Aanya (8) — are beginning to ask questions about “home” and “India.” And deep down, both Ramesh and Anjali miss the idea of being closer to family, festivals, and a slower pace of life.

They’ve decided to move back to Bangalore in the next 3–5 years. Thankfully, they had bought a 2BHK apartment there 7 years ago — it’s fully paid for. Their dream now is to lead a comfortable but not extravagant life in India. It’s more like their retirement planning.

But the decision brings a lot of questions:

• Will their savings be enough in India?
• What’s the monthly cost of living now?
• How much will they need post-retirement?
• And most importantly, how should they start tweaking their investments before the big move?

Their goal is simple:
“We want to live comfortably in India, without compromising on our kids’ education or our peace of mind.”

Defining Their Future Lifestyle in India

The first step to financial clarity is defining what “comfortable living” means — because everyone’s version is different.

For Ramesh and Anjali, it doesn’t mean luxury villas or private jets. It simply means:

• A good apartment in a metro city
• Quality education for the kids
• Good healthcare access for themselves and their parents
• A yearly family vacation
• And no stress about monthly bills or sudden medical costs

They plan to live in their own apartment in Bangalore, so no rent. But they’ll need to manage monthly expenses, school fees, transport, medical costs, and lifestyle spending.

Here’s a breakdown of their estimated monthly living expenses:

This adds up to ₹13.2 lakhs per year for a family of four to live comfortably in a metro city like Bangalore.

Now, this is 2025 pricing. If they plan to settle for good, we must consider inflation. That ₹13.2 lakhs today could be close to ₹26–30 lakhs per year by the time they retire in 15–20 years.

That’s why just saving isn’t enough. They need a clear investment and income strategy — especially in Indian financial instruments — to beat inflation and preserve lifestyle.

Inflation and Retirement Planning

When Ramesh and Anjali looked at their estimated ₹13.2 lakh annual expense in India, it seemed manageable today. But what about 15 years from now, when they retire around age 60?

That’s where inflation steps in – the quiet but powerful force that reduces the value of your money over time.

What does inflation really mean for them?

Let’s assume an average inflation rate of 6% (which is reasonable for India, considering education and medical costs are rising faster than general inflation).

Using a simple calculation:

Future Expense = Current Expense × (1 + inflation rate)^years

So,

Future Expense = ₹13.2 lakhs × (1.06)^15 = ₹31.6 lakhs/year approx

This means, by the time Ramesh turns 60, they’ll need ₹31.6 lakhs per year just to maintain the same lifestyle they are planning for today.

Now let’s estimate how much money they would need to support themselves for 20 years post-retirement (from age 60 to 80):

They may not spend exactly ₹31.6 lakhs every year in retirement (some costs like kids’ education will go away), but medical costs and lifestyle expenses will continue or even rise.

Let’s assume they’ll need around ₹25 lakhs per year on average after retirement.

To sustain this for 20 years, they’ll need:

₹25 lakhs × 20 = ₹5 crores approx (excluding investment growth)

But if we consider that this corpus will be invested and generate returns (say 7–8% in safe mutual funds or annuity products), they might need a bit less — around ₹3 to ₹3.5 crores as a minimum retirement corpus.

So what’s the takeaway?

• Living comfortably in India today costs ₹13–14 lakhs/year
• In 15 years, they’ll need ₹30+ lakhs/year
• To retire comfortably, they’ll need at least ₹3 to ₹5 crores in a diversified and inflation-beating portfolio

This is why starting early & smart retirement planning is essential — not just to build wealth, but to protect your future lifestyle.

What Investments Do They Currently Have?

Ramesh and Anjali aren’t starting from zero. Like many NRIs, they’ve built a solid foundation over the years. Let’s list what they currently hold:

Assets:

• NRE Fixed Deposits: ₹50 lakhs
  These are safe and tax-free as long as they are NRIs. But once they return, interest becomes taxable, and they’ll need to convert the account.
  
• Mutual Funds (Indian + Global): ₹35 lakhs
  They’ve been investing in a mix of international index funds (like the S&P 500) and Indian equity mutual funds via NRE/NRO accounts.
  
• US Retirement Account (401k equivalent): ₹40 lakhs
  This account is held in the US. They’re unsure whether to keep it or move it to India.
  
• Fully Paid Apartment in Bangalore
  No EMIs. Rental income isn’t a priority — it’s their future home.
  
• No liabilities or loans

Also read: Retirement Planning with Digital Gold Investment

Their current asset mix is solid. But here’s what they need to think about:

1. Liquidity in India
   A good portion of their wealth is in foreign assets. Once they move back, they’ll need to shift some assets to India to ensure local liquidity — for everyday expenses, healthcare, etc.
   
2. Tax Implications
   After returning, income from FDs, mutual funds, or even rent becomes fully taxable in India. They’ll need to rebalance investments accordingly — maybe reduce reliance on FDs and look at more tax-efficient income sources like SWPs or debt mutual funds.
   
3. Currency Risk
   Assets held abroad will be exposed to exchange rate fluctuations. It’s safer to build an India-specific portfolio for expenses that will happen in rupees.

So while they’ve saved well, they now need to start reshaping their investment mix for a rupee-based life.

Tweaking Their Investments for the India Move

Ramesh and Anjali have about ₹1.25 crore in total investments across NRE FDs, mutual funds, and international retirement accounts. That’s a good start — but since they’ll soon be living in India, it’s time to prepare their portfolio for a rupee-based life.

Here’s how they’re planning to tweak their investments:

Step 1: Shift Focus to Indian Assets

Once they become Indian residents again (after their RNOR period), they’ll lose the tax benefits on NRE FDs. So, it’s better to:

• Gradually withdraw NRE FDs before maturity or let them run their course but avoid renewing.
• Move funds into low-cost mutual funds or tax-efficient debt mutual funds in India.

For example, instead of keeping ₹50 lakhs in FDs earning 6% post-tax, they can move ₹30 lakhs to a balanced hybrid fund — aiming for 9–10% long-term returns with moderate risk.

Also read: Build Funds for Retirement in India as NRI/OCI

Step 2: Set Up a Local Emergency Fund

While they were abroad, emergency funds were held in USD/AED. But in India, they’ll need:

• A ₹10–12 lakh emergency fund, parked in a liquid mutual fund or savings account for quick access.
• This should cover at least 6–9 months of their expenses, including medical costs.

Step 3: Build a Rupee-Income Stream

Rather than relying only on global income or assets, they’ll:

• Set up a Systematic Withdrawal Plan (SWP) from mutual funds to get ₹40–50k monthly.
• Consider a Senior Citizen Savings Scheme (SCSS) or annuity post-retirement for steady income.
• Explore dividend-paying equity funds to supplement income while still getting capital appreciation.

Step 4: Keep Some Global Exposure (but reduce it)

While having 10–15% in global markets is good for diversification, too much of their wealth abroad can expose them to exchange rate swings.

They plan to:

• Retain their US retirement account and let it grow till retirement
• But not add more to global investments, and instead build an INR-focused portfolio

The Goal?

By the time they move, at least 70–75% of their investments should be India-centric, focused on generating income in INR, matching their life stage and lifestyle needs. This will support their retirement planning.

Healthcare and Children’s Education Planning

These are two areas where NRIs often underestimate costs when returning — because unlike abroad, there’s no blanket insurance or free schooling.

Healthcare: Preparing for the Unexpected

Ramesh’s parents are already in their 70s, and he’s seen how expensive hospital stays can be in India — especially in metros.

So, here’s what they’re planning:

• Health Insurance for the Entire Family
  They plan to take:
  • ₹20 lakh floater policy for the 4 of them (Ramesh, Anjali, kids)
  • Separate senior citizen policies for Ramesh’s parents
    Annual cost: ₹55,000–₹60,000 approx
    
• Top-up plans: These offer additional cover at low cost. For instance, a ₹50 lakh top-up with ₹5 lakh deductible costs as low as ₹3,000–₹4,000 per year.
  
• Health Emergency Fund: Separate from their regular emergency fund — just for medical needs.

Why this matters: One major surgery or critical illness can wipe out years of savings if not insured properly.

Children’s Education: Planning for the Big Spends

Aryan and Aanya are still in school, but college is just a few years away. If they plan to study in India (private universities, IITs, MBBS, etc.), the cost could range between ₹10–25 lakhs.

If they plan to go abroad later, that figure could jump to ₹1 crore or more.

So the plan is:

• Start a dedicated education fund using SIPs (₹25k/month)
• Choose hybrid and large-cap equity mutual funds for long-term growth
• Keep reviewing corpus growth every year to ensure they’re on track

They’re also considering:

• Education loans as a backup, especially for foreign studies
• Leveraging their apartment (as collateral) if needed, without touching retirement funds

So far, Ramesh and Anjali have gone from broad dreams of moving home to building a clear, step-by-step financial strategy.

What Should Other NRIs Learn from This?

Ramesh and Anjali’s case isn’t unique — many NRIs dream of returning to India someday. But very few take the time to restructure their life and finances with the same level of clarity. Here’s what you can take away from their journey for a perfect retirement planning:

1. Planning Early Pays Off

They began planning their return 5 years in advance. That gave them time to:

• Review and tweak investments
• Understand taxation after NRI status ends
• Build INR-based income streams

If you wait until the last year, you’ll be forced to make rushed decisions – often leading to tax hits or liquidity issues.

2. Don’t Underestimate the Cost of Living in India

India may seem cheaper in comparison to Dubai or London, but a comfortable, urban lifestyle — including private schooling, AC summers, good healthcare, domestic help, travel — adds up fast.

Always calculate for the lifestyle you want, not just the base cost. This is a good approach towards retirement planning.

3. INR vs Foreign Income: Plan for Currency Transition

Once you settle in India, most of your expenses will be in rupees. Investments should eventually reflect that. Holding 100% of your wealth abroad doesn’t work long-term due to:

• Exchange rate risks
• Tax complications
• Liquidity challenges

A balanced global-to-local investment strategy works best.

4. Health and Education Need Special Attention

Even with crores saved, a sudden illness or foreign college admission can derail your plans. Don’t rely on just income — build dedicated funds and get insured early, while you’re still young and premiums are lower. Start that retirement planning on all fronts.

8. Final Checklist Before Moving Back to India

Here’s a simple and actionable return checklist for NRIs who want to settle back smartly, just like Ramesh and Anjali:

Financial Planning Checklist

• Estimate monthly expenses in India for your lifestyle
• Account for inflation over the next 10–15 years
• Calculate required retirement corpus
• Start shifting 60–75% of investments to Indian assets
• Open NRO/NRE/NRO PIS accounts as needed
• Build a rupee-based emergency fund
• Review and adjust insurance (health + term)

Tax & Legal Checklist

• Understand RNOR status and benefits
• Plan asset transfers before becoming a resident
• Consult a CA about global income taxation
• Update KYC, PAN, Aadhaar, and residential status in banks and demat accounts

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Lifestyle Checklist

• Finalize city and housing (rent vs own)
• Research good schools, hospitals, and local transport
• Make arrangements for elderly care if needed
• Build a local support network (family, help, community)

Final Thoughts

Moving back to India is not just a physical relocation — it’s a financial transformation. But with the right planning, NRIs like Ramesh and Anjali can enjoy the best of both worlds: the comfort of home and the security of smart investing.

Start early. Be intentional. And let your money move back before you do. That’s the way to go for a perfect retirement planning.

FAQs 

1. How much money should an NRI save before moving back to India?
It depends on lifestyle, location, and life stage, but for a comfortable urban life, couples should target a corpus of ₹2–3 crore and a monthly income of ₹1–1.5 lakh.

2. What is the RNOR status and how does it help returning NRIs?
RNOR (Resident but Not Ordinarily Resident) status allows returning NRIs to enjoy certain tax exemptions for up to 3 years on their foreign income, helping smoothen the financial transition.

3. Should NRIs close their NRE/NRO accounts after returning?
You should convert your NRE/NRO accounts to resident accounts once your residency status changes. Until then, you can continue using them, but update your KYC documents as needed.

4. How can NRIs plan healthcare after moving back to India?
Take a comprehensive health insurance plan (₹20L–₹50L cover), especially if you’re 40+, and set up a separate health emergency fund to cover unexpected expenses.

5. What happens to foreign investments after returning to India?
You can retain them during RNOR years. After that, they may become taxable, so plan to gradually shift your portfolio toward INR-based assets while keeping a small global exposure.

6. Should NRIs buy property before moving back?
It depends. If you’re sure of the city and plan to stay long-term, it’s worth exploring. Otherwise, rent first to avoid being locked into an illiquid asset.

7. How do NRIs maintain a regular income stream in India post-return?
Set up SWPs from mutual funds, consider annuity products, senior citizen schemes, or dividend-paying funds — all of which can generate monthly income in rupees.