Most of us want to enjoy a similar, if not better, standard of living after retirement. As a non-resident Indian (NRI), you have many decisions to make in retirement. More than most other people. And you need to do some serious financial planning if you are to make that dream come true.

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Planning your retirement is more important to an NRI than it is to a resident. But with a little forethought, you can make your money work for you!

Let’s look at a few NRI retirement Tips to help you prepare for your future.

Financial planning for NRIs

Financial planning is more important to NRIs than to most other people. There are a number of decisions you have to make about your retirement long before you retire.

Some of the questions you need to answer when you begin planning your retirement include:

  • You may have moved to your host country in search of a better quality of life. Can you keep this lifestyle with your pension contributions after you retire? Or do you want to move back to India for your retirement?
  • How will inflation, the exchange rate and future fluctuations in the value of money affect your retirement savings?
  • Most governments offer incentives to save for retirement through tax deductions or credits. What are the tax implications of saving for retirement as a non-resident?
  • What investments do you have access to as an NRI? Is your investment portfolio sufficiently diversified in terms of risk?

How do you plan your retirement as an NRI?

When deciding how much to save each month and where to put your money, consider the following financial decisions that will affect retirement:

  • Life expectancy – The average life expectancy in India is increasing. Living longer means you need to plan more carefully so that you can live comfortably the rest of the time. Can you keep your lifestyle with your pension contributions?
  • Exchange rate – If you have existing savings or pension funds in a foreign currency, you can exchange them for INR. Often times the exchange rate is in your favor. Sometimes you can also transfer a foreign pension fund to an INR retirement pension.
  • costs – While your expenses will differ depending on the retirement lifestyle you choose, there are some new expenses to consider. As you age, so do medical bills and equipment. Make sure you plan for this.
  • inflation – A developing economy like India tends to have higher inflation rates. When planning your retirement, you need to consider the real cost of goods and services in the future.

Retirement planning Tips for NRIs

Planning your retirement is a process unique to you. It depends on where you want to retire, what lifestyle you want, and what kind of retirement plan you prefer.

You need to start planning for your retirement as early as possible. Where and how you want to retire affects how much money you need to have in your pension fund. When you want to retire, it will affect the nature of your investments.

1. Take into account your where, when and how

The first retirement decision you need to make is which country to retire in.

Although you do not currently reside in India, you may want to retire there. Often times, people choose to retire in India as the higher purchasing power of the money they have made outside India means they can enjoy a better retirement lifestyle in India compared to their host country.

You also need to decide when to retire. This decision influences the investment decisions you need to make in your retirement portfolio. The sooner you start saving for your retirement provision, the greater the effect and benefit of compound interest.

How you retire is up to you. Depending on the lifestyle you want after you retire, you can save money, retire early, and just live. The most common type of old-age provision, however, is to deposit money into a pension fund or retirement pension every month. You may have a pension fund in your host country that can be converted into an INR pension. You can invest in that too National pension system for NRIs to maximize insurance and tax benefits.

2. Know your retirement goals

Your retirement goals speak for the lifestyle you want to maintain after you retire. Most of us want to enjoy a similar, if not better, standard of living after retirement. To do this, we have to plan it.

You need to consider the expenses associated with your retirement goals. If you are going to travel or want to start a new hobby, plan this in mind. If you want to live close to your grandchildren, you must be able to afford to rest in an area close to where they live.

3. Find investment opportunities in India

If you don’t have a pension fund in your host country or you just want to diversify your portfolio, you should look for investment opportunities in India. This often enables you to maximize your insurance and tax benefits.

You can consider the following investment opportunities in India:

  • Mutual Funds – As an NRI, you can invest in mutual fund systems and monthly income plans.
  • Equity – You can invest in direct equity through an account linked to your External (NRE) Account or Ordinary Foreigner (NRO) Account.
  • Fixed-term deposits – A fixed-term deposit tied to your NRE gives you tax-free interest.
  • National Pension Scheme – When you invest in the National Pension Scheme as an NRI, you get the same insurance and tax benefits as a resident.
  • Real Estate – Although as an NRI you cannot own agricultural land, you can invest in residential and commercial real estate.

4. Avoid the most common mistakes

Don’t start saving for your retirement late in life. You need to save and invest at every opportunity. The sooner you start retirement planning, the longer and harder your money will work for you. Compound interest is strongest over a long period of time.

Estimate your retirement budget as accurately as possible. If you underestimate your retirement expenses, you can make bad investment decisions early on.

When making provision for old age, you need to consider the investment risk. A more volatile, high risk portfolio can result in good growth early on in your investment program. However, as you approach retirement age, you want to protect yourself from risk and invest in retirement funds that pay off your benefits consistently.

And one last tip – Keep your documentation up to date for hassle-free investing.


There are many options available to you as an NRI plan for your retirement. Once you’ve decided where, when, and how to retire, you’re ready to start planning.

The sooner you start saving for retirement, the better. Careful planning is required for a balanced investment portfolio. Find out about investment opportunities in India to maximize your insurance and tax benefits. It takes a little forethought and planning, but you can put your money to work for you!