NRIs: Tips for Retirement Planning

NRIs: Tips for Retirement Planning

Are You NRI (Non-Resident Indian) and living outside India? And do you want to retire peacefully? Than this article is for you. Many NRIs have a false belief that, their retirement will be peaceful when they will leave India and go to USA, Europe, Australia…etc… But well, this is a myth. Many people leaving India think that now their earnings will be more so they will be able to retire peacefully. But the truth is that, you will need to do retirement planning if you want to retire early.

Here are the few tips for NRIs for the Retirement Planning.

01) Start Investing as Early as Possible means Now -

This is the 95% of the advise that anyone needs to retire peacefully. Most of the people ignore the importance of this advise and that’s why struggle financially after the retirement. If you start investing early than the compound interest will work in favour of you to make you richer over the period of time and financially free.

So start investing as early as possible.

02) Get out of Debt as early as possible -

The main problem with western economies is that, they are the debt ridden economy. Means they afford everything on debt. They believe in buy today and pay tomorrow mentality. And Indian economy is not the debt ridden economy.

The only problem with taking excessive debt (Credit cards, Personal loans, Home loans, Car loans…etc..) is that, you will have to work hard like a slave in the economy until you repay that debt. You can not be retire until you repay that debt.

Businesses can afford to take a debt. But Individuals can’t. So take debt carefully. Always take a debt to finance assets (Businesses, Rental properties…etc…) and never take a debt to finance liabilities (Car, expensive clothes, shopping…etc..).

And if you are already in debt than get out of it as early as possible. Getting out of debt is the best investment.

03) Have an Emergency Fund -

An Emergency Fund should be 3-6 months of monthly expenses. So that in case of emergency (Job loss or a medical emergency), you don’t have too liquidate your long term savings.

04) Invest in Index Funds -

In developed countries, the scenario of stock markets is different. Like India, the stock markets of developed countries (USA & Europe) don’t give annual 20-40% returns like Indian Sensex. But they just give 8-10% compounded annual return in the long run. Sometimes just 4-5% annual return.

And that’s why most of the actively managed funds can’t beat the Dow Jones or any other underlying index. And that’s why it is advisable to invest in Index mutual funds which have low expenses. The best Index fund in USA is Vanguard Mutual Funds.

05) Invest in India -

Indian economy is a growing economy and the next 5 decades are of growth of India. Indian equity markets are giving 20-30% compounded annual return in the long run. So you can take the advantage of this growth of India over next few decades by investing in Indian assets. This will boost your returns and make you retire peacefully.

Thus, the above are the great tips for NRIs. Do the retirement planning according to it and retire peacefully.