Retirement planning for NRIs- factors to consider, investment options

 


Retirement planning is essential whether you are an Indian citizen or NRI planning to retire in India. Retirement plans for NRI in India are somewhat similar to that of Indian citizens but with a few constraints.




This blog will help you understand some important things to consider when planning your retirement, your investment options, and mistakes that you can avoid. 


  1. Retirement age


There is no right age to retire; it depends from person to person. Some might want to continue working because they want to despite no financial constraints, some might want to retire early and live a peaceful retired life. 


Retirement age is one of the most important factors in retirement plans for NRIs this will help determine your investment options. 


  1. Retirement location


It is a known fact that different places come with different costs of living. If you plan on retiring in a big city, you might need more money than if you were retiring in a small town. This is a personal choice that you need to consider before thinking about retirement planning.


  1. Post-retirement plans


The cost at hand for retirement also depends upon what you do after you retire. If you plan on taking a year to travel the world, you will need a lot more money than someone who wants to stay with their grandkids at home. Your lifestyle matters and you should take this opportunity to think about the things that you want to do post-retirement. 


  1. Passive Income options


A lot of people consider passive income options for their retirement. E.g., Leasing out an owned property, consulting, tutoring as a passion. These can make a big difference in your retirement fund. 


Investment options for NRIs in India


After you have considered all the above variables, now know have a better idea of what amount you need at hand when you retire. Now is the time you start planning your investments. 


Following are the investment opportunities for NRIs in India:


  1. FCNR Fixed Deposits: NRIs wanting to invest in India need to have FCNR accounts. An FCNR account allows you to invest money earned outside the country into FDs. NRI fixed deposit is a good option for investment. 


  1. Mutual funds: NRIs can invest in mutual funds in India provided they adhere to the Foreign Exchange Management Act (FEMA). They are easy to manage and quite popular among NRIs. 


  1. Equity Investments: NRIs can invest in equity through their Demat accounts linked to their NRO accounts. A good amount of research and risk appetite can get you great returns on this investment. 


  1. Real Estate: As an NRI, you are allowed to invest in housing and commercial projects but not in agricultural projects. One needs to be careful when investing in real estate as it requires a lot of attention and management. Although, it can be a great investment if you plan on using it as your retirement house. 


Mistakes to avoid


  1. Investing late: The best time to start investing is in your early 20s. Start investing as early as possible. 

  2. Forget about Inflation: Today if you can buy a bar of chocolate for INR 10, forty years down the line that same chocolate will cost you INR 30. Make investments that help you beat inflation. 

  3. Ignore risk appetite: As you get older, your risk-taking capacity decreases, so it is best to invest in the 20s when you can take the most risk and stand a chance of getting better returns. As you get older, invest in opportunities with lesser risk. 

Comments

Post a Comment

Popular posts from this blog

Why is India a Good Destination for Investment

Image
India continues to be an attractive destination for the investors, and form a huge part of the world’s fastest-growing economies. Indian residents and Non-Resident Indians(NRIs) are actively looking to earn money by Investing in India. Also, if the investments are made by NRIs then it is treated as ‘foreign investments’ as per the Indian foreign exchange regulations, making India one of the top recipients of  foreign remittances   from its diaspora. Here are some reason why India is a good place for investment:- Indian economy is one of the world's fastest-growing economies According to the Department of Promotion of Industry and Internal Trade, India has crossed the $70 Bn mark in the Fiscal Year 2019-20 and recorded a total FDI inflow of $73.45 Bn, ranking amongst the top countries for investments by leading investors. Indian infrastructure story More than $1.5 trillion investments have been planned for Indian infrastructure for the next two decades across the key government...
Read more

All you need to know about an FCNR Account.

Image
  Providing NRIs with lucrative returns without much hassle was the main objective with which the FCNR account was first introduced. This primary objective still holds.  What is an FCNR Account? FCNR stands for Foreign Currency Non-Resident Account. It is a term deposit account popularly known as an FCNR deposit . These fixed deposit accounts are opened for depositing foreign currency income earned overseas. The account is maintained in the same foreign currency as deposited.  NRIs (Non-Resident Indians) and PIOs (Person of Indian Origin) are eligible to open an FCNR account with an authorized bank or dealer.   FCNR account is more beneficial to those NRIs who are sure to repatriate their funds from the account on maturity. Also, FCNR deposits are a good option for NRIs who are looking for a secure hassle-free fund deposit option in India. You can book your FCNR Account in  US Dollars Canadian Dollars Australian Dollars Pound Sterling Swiss Franc Euro Japan...
Read more

What are the benefits of opening an NRI account?

Image
NRI account s can be opened by Non-Resident Indian who reside outside the geographic territory of India. This account facilitates account holders to manage transactions in the currency of their country of residence. There are types of NRI saving account one can opt to open: NRE Account NRO Account NRE Account: NRE (Non-Resident External) account is accessible to deposit overseas savings as rupee dominated. It is an account opened in India in the name of NRI. One can open a joint account between two Non-Resident Indians or a Person of Indian Origin with the SBM NRE savings account . Benefits of NRE account: Interest 6% p.a. with monthly payout of interest Tax-free returns Fully repatriable Competitive forex rates Dedicated Relationship manager Preferential pricing on a host of products and service Premium privileges with Personal concierge NRO Account: NRO (Non-Resident Ordinary Rupee) is an account opened in India by the name of NRI to manage the income earned in India. That earning c...
Read more