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Retiring in India at 67: How much do I need to live comfortably?

Ramalingam Kalirajan |7279 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Dec 18, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more

Question by uday on Dec 18, 2024Hindi

Hi Ramalingamji I am living in Australia. I am 67 and my wife is 61. We are planning to retire in Hyderabad. I have invested in a flat which is expected to be ready by June 26. My question is how much do we need to sustain a living as a retired couple in India. Please assume that the flat has been paid for. I know I will have to keep some aside for medical needs. I have been unsuccessful in getting a health insurance because of my age, a stent 13 years ago and diabetes. Your views and advice will be appreciated. Regards Uday

Ans: Retirement planning requires a detailed understanding of your lifestyle and financial needs. Below, I will guide you on how to evaluate your expenses, manage medical costs, and optimise investments to sustain your retirement in Hyderabad.

Monthly Living Expenses for a Retired Couple in Hyderabad

Basic Living Expenses

Grocery, utility bills, and house maintenance costs are reasonable in Hyderabad.
Expect Rs. 25,000–35,000 per month, depending on your lifestyle.
Transportation and Miscellaneous Costs

Local travel and entertainment costs can vary between Rs. 5,000–10,000 monthly.
These include outings, public transport, or private car maintenance.
Domestic Help and Services

A cook, maid, or caretaker could cost Rs. 5,000–10,000 monthly.
Ensure a budget for regular maintenance or repairs.
Medical Needs and Healthcare Planning

Health Insurance Challenges

Your age and pre-existing conditions make getting health insurance tough.
Build a separate medical corpus of at least Rs. 30–40 lakhs.
Focus on Preventive Care

Regular health check-ups can prevent expensive treatments.
Include costs for diabetes and stent-related care in your budget.
Emergency Medical Fund

Keep liquid funds for unplanned medical expenses.
Access to cash in emergencies will reduce financial strain.
Income Management for Sustained Living

Investing for Regular Income

Create a portfolio of debt mutual funds and balanced hybrid funds.
These provide stability and regular income with moderate growth.
Avoid Over-Reliance on Fixed Deposits

FDs provide safety but may not beat inflation.
Diversify into high-quality debt instruments for better returns.
Keep a Cash Reserve

Maintain six months' expenses as cash or in a savings account.
This ensures liquidity for emergencies.
Adjusting Lifestyle for Financial Comfort

Budgeting and Expense Monitoring

Track monthly expenses and adjust for inflation annually.
Limit discretionary spending to control your overall budget.
Focus on Value Spending

Prioritise needs over wants.
Engage in low-cost recreational activities like community events.
Plan for Inflation

Inflation can erode purchasing power.
Review investments every two years to ensure returns match rising costs.
Strategies to Overcome Health Insurance Gaps

Explore Specific Senior Citizen Plans

Some insurers offer health plans with limited coverage for seniors.
Accept higher premiums or deductibles if necessary.
Focus on Emergency Health Funds

Health savings should complement your medical corpus.
Keep these funds accessible at short notice.
Stay Connected with Local Hospitals

Build relationships with local doctors and hospitals.
Avail discounted packages for long-term treatment plans.
Long-Term Investment and Financial Planning

Capital Protection

Invest in capital-protected debt funds for secure returns.
Choose investments with low risk and predictable returns.
Equity for Growth

Allocate a small percentage to equity mutual funds.
These provide long-term growth and hedge against inflation.
Systematic Withdrawal Plans (SWPs)

Use SWPs from mutual funds for regular income.
It ensures predictable cash flows without depleting capital quickly.
Inheritance and Estate Planning

Write a Will

Ensure a clear and legally valid will for asset distribution.
Include your flat and investments in the
Nomination in Investments

Assign nominees to all financial and bank accounts.
Review these nominations regularly for accuracy.
Discuss with Family

Share your retirement and financial plans with your children.
Transparency avoids disputes and secures their support.
Final Insights

Retiring in Hyderabad can be comfortable with proper financial planning. Create a balanced budget, focus on medical safety, and invest wisely for growth and income. Consult a Certified Financial Planner for a detailed and personalised strategy. This ensures financial security and peace of mind for you and your spouse.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.