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How can NRI’s Plan for Retirement?

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Most of NRI’s do not understand that financial planning can help make their retirement life a joyous journey. Proper financial planning can empower them to be independent even in their non-earning years. NRI’s, refrain from retirement planning because of its complex nature. It’s similar to a jigsaw puzzle, but it can be fixed by matching one’s financial position and goals. In this article, we will try to understand the reason for poor retirement planning by NRI’s. We will also do a case study so as to make you understand the process of retirement planning.

Why NRI’s do not pay attention to Retirement Planning?

Primary reasons for poor retirement planning by NRI’s are listed below. Find out which category you fall into, as unless you understand the problem, you cannot find a solution.

Too busy with earning money – Most of the NRI’s have a busy schedule. They have to attend meetings, participate in seminars, and meet different people in order to multiply their money. In this mad rush, sanity takes a back seat and they simply forget that one day they will have to get rid of this schedule willingly or unwillingly. At that point in time, most of the cash flows will be cash outflows and a proper plan is needed to correct that.

Short lifespan – Some NRI’s don’t believe in retirement concept. They believe they will die young, hence retirement planning is useless. What they must note here is the increase in life expectancy as a result of medical enhancements.

Social Security Safety net – NRI’s living in countries where government runs social security programmes, feel secure as availability of social security renders retirement planning unnecessary. The point which NRI’s miss here are the uncertainties related to the future. What will happen if they have to return to India post retirement, where there is no concept of social security?

Cultural Impact – As Indians, we are believers of family values. Children are expected to take care of their parents when they grow old. NRI’s are no different and they too have the same expectations from their children. This belief stops them from doing proper retirement planning.

How to plan for Retirement?

From above discussion, it’s clear why there are gaps in retirement planning and its impact post retirement. Now it’s time to focus on retirement planning part. Retirement planning is basically spun around various asset classes available for investment like Fixed Deposit, Stocks, Mutual Funds, Gold, and Insurance. It’s a two step process and first step comprises of SWOT (Strength, Weakness, Opportunities and Threats) analysis and need identification like standard of living post retirement, sources of income available, inflation, lump sum capital requirement, medical cost, etc. As a second step, you quantify the outcome of first step and attach monetary value to it. Once monetary requirement is clear, you need to identify the asset classes and percentage allocation that will generate desired cash flow post retirement.

I am presenting below a case study in a format which will help you understand the whole process.

Case Study

Satish Awasthi is one year away from retirement and would like to know the (Equity /Fixed income-BLOCKS OF 4 years) allocation to ensure an income of 8 lacs/yr post tax (escalating at 7.5%) up to age 85. Total assets at time of retirement are 1.6 crore approx.


I have created a cash flow model for this case. The model is in excel format below and is self-explanatory. Cash flow is for 10 years and can be extended for any number of years and for any number of investments. There is no need to worry if you do not understand it, as you can always seek help from a professional advisor while creating your retirement plan.
retirement planning


Your retirement plan will be a winner if it has time by its side. Creating an early plan and sticking to it is necessary for delightful retired life. It doesn’t matter what category you fall into, just wake up, and start with your retirement plan before its too late.


    How to download this excel file

  • Santhosh

    Dear Bimlesh,

    I am not able to download the cash flow model.

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