Retire in India

The calculator that assumes you were never here

Every Indian retirement calculator makes the same two assumptions: that you saved in rupees, and that you will spend in rupees. For a resident Indian, both are true and the arithmetic is straightforward.

For you, neither is true. You have been accumulating in pounds, dollars or dirhams for fifteen or twenty years, and you will spend in rupees for thirty more. Between those two facts sits an exchange rate that moves every day for the whole period, and two inflation rates that are not the same as each other.

Getting that wrong does not produce a slightly imprecise answer. It produces an answer that is wrong by a multiple.

The number that surprises everyone

Ask most NRIs what a comfortable Indian retirement costs and they will quote a figure in today’s money — ₹1 lakh a month, perhaps ₹1.5 lakh for a couple who want to travel.

That is a perfectly sensible figure. It is also not the figure you need to fund.

At 6% inflation, ₹1.2 lakh a month becomes ₹3.85 lakh a month in twenty years’ time. Not because you are living better, but because you are living the same. And you need to fund that rising number for thirty years after it starts, which is where the corpus figure climbs into the crores and stays there.

The single most common error in retirement planning is inflating from the retirement date rather than from today. It quietly removes twenty years of compounding from the bill.

Healthcare is not one line among many

Group your retirement spending into two buckets and something uncomfortable emerges.

Everything ordinary — food, utilities, help, travel, the family obligations that do not stop when you retire — inflates at roughly 6%.

Healthcare does not. Health insurance premiums for the over-sixties have risen fast enough that in January 2025 the insurance regulator formally directed insurers that they “shall not revise the premium for senior citizens by more than 10% per annum.” That is a regulatory ceiling, imposed because increases had been running above it.

Ten against six sounds like a rounding difference for a single year. Compounded across a thirty-year retirement it means healthcare’s share of your household budget roughly doubles — and it climbs every single year, fastest at exactly the age when your ability to earn more has gone.

If you are coming from Britain, add one more thing: you have probably never experienced healthcare as a budget line at all.

The rupee’s fall is not a strategy

There is a comfortable belief among NRIs that money left abroad quietly gets more valuable, because the rupee always falls. It does fall. It is not, however, free money.

The rupee declines broadly because Indian inflation runs above foreign inflation — and that same inflation is raising the price of everything you intend to buy with the proceeds. The gain on the exchange rate and the loss on the price level are two views of the same fact.

Restated in terms of what they actually buy in India, a 6% return in pounds with 2% rupee drift comes to roughly 2% a year. A 9% return in rupees against the same 6% inflation comes to roughly 2.8%.

They are close. Close enough that the “keep it abroad or bring it home” argument should be settled on currency risk, tax treatment, repatriation rules and your own tolerance for Indian market volatility in your seventies — not on a currency effect that mostly is not there.

The step change on the day you land

One thing changes discontinuously the moment your residential status does.

Interest on NRE deposits is exempt from Indian tax under section 10(4)(ii) only while you are a non-resident. Become resident again and the exemption ends. The same deposit, at the same bank, paying the same rate, becomes fully taxable at your slab rate.

For a retirement funded substantially from NRE deposits, that is a real cut in income arriving at exactly the moment the money stops being accumulated and starts being spent.

There is a window, though. Most people returning after a long spell abroad are Resident but Not Ordinarily Resident for two or three financial years, during which foreign income stays outside Indian tax entirely. Realising gains on foreign assets inside that window rather than after it is frequently worth more than several years of diligent saving. The RNOR tracker works out how long yours runs.

What the model will not tell you

The arithmetic above is exact. The inputs are thirty-year guesses, and small changes to any of them move the answer a great deal.

The defaults lean conservative on purpose — returns towards the low end of the historical range, inflation towards the high end, currency drift rounded down — so the model errs towards telling you to save more rather than less. Treat the output as an order of magnitude, not a target, and come back to it every few years.

And check the other side of the move before you commit to it: moving back to India covers what the country you are leaving will charge you on the way out, which for Canadian and Australian residents is a bill that arrives before you have spent a single rupee.

Two things worth settling alongside the corpus figure. Which city matters more than most people expect — cost of living compare puts Mumbai about 46% above Kochi for the same standard of living, which over thirty years of drawdown is a difference measured in crores rather than percentages. And if you still have children to put through university, the degree cost planner prices the other claim on the same savings, on a clock that runs out well before this one does.