Best retirement practices for NRIs in India.

 Planning your retirement is as important as planning your current financial implications and investments. A well-defined retirement plan can make your yesteryears peaceful, doubtful free and debt-free. Charting out a retirement plan is essential for everybody, especially an NRI who may wish to come back to India after retirement. Though deciding upon how you want to spend your retirement years may come naturally to you, there are certain practices that you may consider before funding your retirement plans.


Define the when, where and how


Factoring upon different aspects of your retirement can make your transition into your retirement easy. First things first, define the when, where and how of your retirement. Answering the when question means determining at what age or what strata of your professional career do you wish to retire. Where defines the place where you want to settle. It may the country of your residence, your homeland India or any other country which fulfils how the question of your retirement plan. In the how-to section, you need to decide upon how would you want to spend your coming retirement years. Some may want to take up a second job and still work at leisure. Some may wish to retire from all work responsibilities and lead an adventurous life. While some may simply want to relax and enjoy their hard-earned money. Answering these 3 questions will help you chart your retirement plans well.


Determine your retirement goals


A retirement goal is directly related to your retirement financial planning. Whether you want to lead a luxurious life or lead a modest lifestyle, fulfil your life with charitable work or build an ancestral fortune for the next generation. Your retirement goal will help you determine your financial planning to achieve these goals. Save, invest or park your funds in a wide range of investment instruments depending on your risk-taking ability to fulfil your retirement goals. 


Square down your Investment options


Once your retirement goals are in place, your need to square down on investment options that suit you the best. Invest in the following investment instruments to achieve financial stability successfully.


- Index funds – Index funds are considered as a haven for savings for the later years of life. They are exchange-traded funds that follow a passive investment strategy. Index funds hold bonds and equities that mirror the security of a safe benchmark index irrespective of the state of the Indian markets. Index funds have gained more popularity than mutual funds because of their low operating fee, wide market exposure and low portfolio turnover.


- Monthly Income Plans – To comfortably take care of your monthly retirement expenses, it is advisable to invest in Monthly Income Plans which provide you with steady returns every month. These plans mainly invest in debt securities where your principal amount is safeguarded and you receive a regular monthly amount.


- Liquid Funds – Retirement means a considerable reduction in your cash inflow. To maintain your pre-retirement lifestyle, you will need an investment option that matches both your cash inflow and outflow well. Liquid funds are low-risk funds with reasonable returns and complete flexibility of redemption. Liquid funds invest in securities with a maturity period of 91 days or less. It is better to invest in Liquid funds if you plan to have a dynamic inflow and outflow of funds in the future.


- Pension Plans – Pension funds provide multiple benefits of insurance and investment. Saving a certain amount early during your work life leaves you with a large accumulated sum that generates steady cash flow once you retire. Pension funds provide tax exemptions, monthly liquidity and government support in most cases.


Prepare for Emergency Funds


By emergency funds we mean a certain amount kept aside for contingency. Money kept aside in emergency funds are not attached to any life goals. They are highly liquid and consist of the extra funds that you may have after fulfilling all your overheads. However, this does not mean that you leave this fund amount idle. Park your emergency fund amount in liquid low risk or no risk investments like NRE Account Fixed Deposit or FCNR fixed deposit accounts.


Keep your documentation updated


While you invest all your time in planning and investing for your retirement, make sure all your back-end work is up to date. Ensure all your paperwork and legal documents are ready, attested and secure.

While planning and acting on your retirement plan early can be cumbersome, it is always advisable to take help from industry experts working in the country you wish to settle. SBM Bank India’s NRI account services, not only help you with fund transfers, documentation but also guide you throughout your investment plans and saving in the Indian markets. Choose from an NRE, NRO or FCNR savings account and start parking your funds to help you enjoy your retirement to the fullest. SBM India is always happy to support you in case of any assistance that you may require. Also, visit SBM India to know more about our NRI interests.

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