Avinash works through a worked example: an NRI with 8 crore who expects to spend 3 lakh a month after returning to India. The simple division leaves out taxes, inflation, currency risk, market falls and family goals.
Avinash works through a worked example: an NRI with 8 crore who expects to spend 3 lakh a month after returning to India. The simple division leaves out taxes, inflation, currency risk, market falls and family goals.
Avinash starts with a simple test. Arvin has 8 crore and plans to move to India, where he expects to spend around 3 lakh a month. Dividing 8 crore by 3 lakh a month gives about 22 years, and that is why he thinks he is all set.
Avinash, the founder and host, says that this sum leaves out almost everything that can make retirement difficult. He adds that the same 8 crore could be enough for one person and not enough for another with almost the same lifestyle. His aim is to build Arvin's plan properly, starting with the right corpus before any calculation is made.
Arvin does one thing right: he does not include his Pune house in the 8 crore. Avinash points out that many people quote a net worth figure that includes their home. A person who says their net worth is 12 crore may, on looking inside, have a 4 crore house, 1 crore of land and 50 lakh of jewellery they do not want to sell. Those items come to 5.5 crore, and Avinash says that amount cannot pay a single grocery bill.
So net worth and the retirement corpus are not necessarily the same number. Avinash suggests separating the assets you live in from the assets that fund your retirement. Arvin's 8 crore is treated as genuinely investable, and the calculation moves on from there.
Most people divide the corpus by the monthly spend and stop there. Avinash says the more useful figure is the withdrawal rate. Arvin wants 3 lakh a month, which is 36 lakh a year. Divided by 8 crore, that gives an initial withdrawal rate of 4.5%.
Avinash then uses the 4% rule, which he describes as based on historical retirement research, primarily using US market data. The idea is that withdrawing 4% of the corpus gives the investments a real chance to grow alongside the withdrawals. At 4%, 8 crore would generate 32 lakh a year, about 2.67 lakh a month. At 3.5%, the same corpus would generate 28 lakh a year, about 2.33 lakh a month.
Avinash suggests that 3.5% could be more appropriate for an Indian retirement plan because of high inflation. At a 4% rate, a target of 36 lakh a year would need a corpus of 9 crore. The question therefore changes from whether 8 crore is enough to which starting withdrawal rate feels comfortable and which risks the person is willing to take.
The 3 lakh a month is meant as after-tax spending, the amount Arvin can actually spend. The amount he has to withdraw from his investments may be different. Avinash warns against confusing 3 lakh of spending with 3 lakh of withdrawal, because the plan has to work on after-tax cash flow.
For an NRI returning from the US, Avinash says, this gets more complicated. Some assets may be in India, some in the US, some in retirement accounts and some in taxable investments. Once residency changes, the tax treatment can change as well. No tax rates are set out here. This is general information, not personal tax, legal or investment advice.
Inflation is the second factor. Arvin's plan shows 3 lakh a month at age 60, at age 70 and at age 80, as if the number never changes. At average inflation of 5%, as Avinash assumes, 3 lakh today becomes roughly 4.9 lakh in 10 years and almost 8 lakh in 20 years. Not every expense rises at the same rate. Healthcare, international travel and some imported goods may behave very differently from general inflation.
That 5% is an assumption, and no source is cited for it. Readers who want actual India inflation figures can check the Ministry of Statistics website, which publishes India CPI inflation data.
Arvin is 60 and his wife is 56, but the plan is based only on his retirement. Avinash calls that a mistake. The portfolio supports the whole household, and the younger spouse could need the money for decades longer. The real question is not only how long Arvin will live, but how long this money could support the household.
Other income can change the load on the portfolio considerably. Arvin might qualify for Social Security at age 62, and he expects around 1 lakh a month after taxes and currency from that age. Before Social Security starts, the portfolio has to fund about 3 lakh a month. After it starts, the portfolio may only have to fund about 2 lakh a month. Avinash's advice is to look at future income streams, not only at the corpus. For a fuller walk through eligibility and payments, see our guide to U.S. Social Security for people living in India.
Other sources Avinash lists are pensions, retirement benefits, rental income, an annuity and consulting income. Each one can reduce how much of the portfolio has to support retirement. For the income products themselves, see NPS, mutual funds, SCSS and annuity options for retirement income. Readers expecting US Social Security benefits can check the rules for payments outside the US on the Social Security Administration's international payments page.
After the move, most of Arvin's expenses are in rupees, but his assets may still be in dollars. They may include a 401(k), an IRA, a US brokerage account and perhaps a property. His children live in the US, so some costs may stay in dollars: travel to the US, extended stays there, gifts for the grandchildren and helping the children. For how such accounts fit into an India plan, see retirement planning for NRIs with 401(k) and Roth IRA accounts.
Avinash argues that the question is not simply whether to move all the money to India. The better question is what job each pool of money has to do. His examples of possible jobs are:
The currency itself depends on the retirement plan.
Avinash gives an example: Arvin retires with 8 crore, and six months later the market falls 20%. His portfolio becomes 6.4 crore. His grocery bill does not fall by 20%, and neither does his health insurance premium. While you are working, a market fall can be waited out. Once you have retired, the portfolio has to take the place of a salary.
Avinash calls this sequence of returns risk. That is why the useful question is not only what return the portfolio will generate over 30 years, but what happens if the bad year comes first. The answer can change how the retirement portfolio and the withdrawals are structured.
A monthly figure hides expenses that do not arrive every month. Healthcare is one example, and it includes health insurance premiums for returning NRI families, hospitalisation, long-term care and other medical expenses. Other large costs include a new car, home repairs, a family event or a long trip to the US. Avinash says these are still real retirement expenses, so he suggests a separate bucket for large irregular expenses rather than a monthly budget line.
Legacy is the eighth factor. Arvin tells his wife that he wants to leave at least 2 crore to the children. Avinash calls this a perfectly reasonable goal, but one the retirement plan has to satisfy. The 2 crore does not necessarily have to sit untouched from day one. The plan should be designed so that, under this assumption, there is a reasonable chance of funding retirement and leaving something for the children.
A 2 crore legacy means only 6 crore is available to spend out of the 8 crore. Avinash's point is that the same rupee cannot do two jobs at once, so the plan has to cover both spending and the family legacy.
Avinash then adds optional income. An old colleague of Arvin's has a startup and asks him to advise the company two mornings a week, with no office and no management responsibilities. The work is something Arvin enjoys, and it pays 75,000 rupees a month, which is 9 lakh a year.
At a 4% withdrawal framework, 9 lakh a year corresponds to roughly a 2.25 crore portfolio. Avinash is clear that consulting income is not literally the same as having 2.25 crore invested. The consulting income could stop, the work could change and taxes apply. There is uncertainty, but the calculation shows that even a modest income after retirement changes the corpus needed.
He also argues that retirement does not have to mean zero income. He draws a line between never earning another rupee and never again needing a salary to survive. He notes that NRIs in their 50s and 60s have decades of experience, and that enjoyable work can be part of that picture. For readers weighing early retirement, see insights and strategies for NRIs on early retirement in India.
Avinash suggests setting three numbers rather than one:
Avinash says these three numbers can be very different. In Arvin's case, the inputs include an after-tax spending target, inflation, a joint retirement, Social Security from age 62, expenses in dollars, the risk of a bad market and a large one-time bucket.
Avinash's verdict depends on what the 8 crore includes and what it has to do. If the 8 crore includes the house, the answer is no, because the plan does not start from the right number. If a large inheritance has to be left, 8 crore may look tight, very tight. But if the corpus is genuinely investable, housing is sorted, other income starts, spending is flexible, big expenses are already covered and the retiree is open to some enjoyable work, the same 8 crore supports a completely different retirement.
Instead of asking whether the 8 crore is enough, he sets out a list of questions:
The real question, in Avinash's words, is:
"How many jobs am I asking this 8 cr to do?"
Once that is answered, the retirement number becomes much easier to understand. If you want your own figures worked through, the return-to-India planner builds a free personalised plan. Avinash also invites viewers to post two numbers in the comments: their expected monthly spending in India and the investable corpus they have. He says he will look at common combinations in a future video.
Watch the full video on the Desi Return YouTube channel.
For a structured course on the NRI-to-resident financial transition, see Financial Blueprint.
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0:00 Arvin has 8 crores. He's planning to move to India and [music] expects to spend around 3 lakhs per month. He does a simple math. 8 crores divided [music] by 3 lakhs per month. So it's 22 years. He thinks he's all set. But there is [music] one problem. The analysis is missing almost everything that can make retirement difficult. And here is another interesting part. The same 8 crore corpus which could be enough for one person may not be enough [music] for another person with almost the same lifestyle. So today let's build Arvin's retirement plan properly. Stay with me because [music] if you're planning to retire in India, your number probably has same holes. Before we even touch the 8 crore, let's make sure we're talking about the right corpus. Arvin does one
1:02 Thing right. He did not include his Pune house in the 8 cr. That's important because many people say my net worth is 12 crores. When they look inside, they have a 4 cr house. They live in a 1 cr land. They don't want to [music] sell 50 lakh jewelry. Suddenly the 5.5 crores of their net worth can't [music] pay a
1:28 Single grocery bill. So your net worth and retirement corpus are not necessarily the same thing. So before you calculate anything, separate the assets that you live in and the assets that fund your retirement. Aravvin's 8 crore corpus is genuinely investable. So that's great. Now let's see what that actually means. Here is where the calculations gets interesting. [music] Most people do this 8 cr divided by their monthly spend and that's it. But there is another number that they should calculate which is their withdrawal
2:05 [music] rate. Arvin wants three lakhs per month. So it's going to be 36 [music] lakhs per year. 36 lakhs divided by 8 crores gives you a initial withdrawal rate of 4.5%. [music] This is the number I want you to remember. There is a concept known as 4% rule. It is based on [music] historical retirement research primarily based on US market data. So the idea is simple. If you withdraw 4% of your corpus, you give [music] your investment a real chance to grow alongside your withdrawals. So at 4% the 8 cr would generate 32 [music] lakhs a year which is approximately 2.67 lakhs a month. At 3.5% withdrawal rate which could be more appropriate for India retirement plan because [music] of high inflation. The same 8 cr can generate 28 lakhs a year which is approximately 2.33 lakhs per
3:08 Month. So if someone is looking for 36 lakhs a year at 4% withdrawal rate you need a corpus of 9 [music] crores. So already the question change it is not is [music] 8 cr enough. It is what withdrawal rate am I comfortable starting with and what risks am I [music] willing to take and we haven't even started adding the complications
3:34 Yet because there are eight major things missing in Arvin's [music] plan and every one of them matters. Let's go through them. First it's taxes. When Arvin says I need three lakhs a month, he means three lakhs [music] that he can actually spend. So this is an after tax lifestyle [music] number. But the amount he needs to withdraw from his investments may not be same. An NRI [music] returning from US this can gets even complicated. Some assets in India, some assets in US, [music] some may be in retirement accounts, some may be taxable investments. And once residency changes the tax treatment can also change. So [music] don't confuse three lakhs per month of spending with three lakhs of withdrawal. Your retirement plan needs to work with after [music] tax cash flow. And the second one is inflation. Arvin plan says age 60 three
4:34 Lakhs [music] per month. Age 70 three lakhs per month and age 80 same three lakhs per month. [music] That's not how retirement works. If the overall spending has an [music] inflation average of 5%, the three lakhs today becomes roughly 4.9 lakhs in 10 years
4:52 And almost 8 lakhs in 20 years. Of course, [music] every expense doesn't inflate exactly at the same rate. But the point is simple. Your retirement lifestyle has to grow with inflation. a healthcare, international [music] travel and some imported goods may behave very differently from the general inflation. The third one is spouse longevity. Arvind is 60, his [music] wife is 56, but his plan is based on his retirement. That's a mistake. The portfolio is not supporting just Arvin. It's supporting the entire household. And the younger
5:34 Spouse could potentially need the money for decades longer. And the retirement planning isn't simply how long will I live? It is how long could this money [music] support our household. That's a very different equation. Number four, other income. [music] Now the plan gets interesting. Here is where the math can work in Arvin's favor. Arving might qualify for social security at age 62. So he's expecting to receive around [music] 1 lakh per month after considering taxes and currency at starting from age 62. Before social
6:16 Security portfolio [music] needs to fund about three lakhs per month. After social security the portfolio may have to fund only [music] two lakhs per month. That's a huge difference. Don't look at your corpus. Look at your future income streams, retirement [music] benefits, pensions, rental income, annuity, consulting income. All [music] of these can change the amount of portfolio that needs to support your retirement. Number five, [music] currency risk. Arvin moved back to India. Most of his expenses [music] are in rupees, but his assets might still be in dollars. [music] 401ks, IRA, US brokerage account, maybe a property and his children are living in US. So there [music] might still be some expenses in dollars, travel to US, extended stay there, gifting the grandkids, helping children. This means retirement is simply should I move all
7:18 [music] the money to India. The better question is what job does each pool of money might have to support? Some money [music] may need for Indian expenses, some may be for dollar reserves, some may be for long-term retirement money,
7:35 Some may [music] be for legacy and the currency itself depends on the retirement plan. Number [music] six, bad timing. Imagine Arvin retires with 8 cr, 6 months later the market falls [music] 20%. and his portfolio becomes 6.4 cr but [music] his grocery bill doesn't fall by 20%. His healthcare insurance premium doesn't fall by 20%. When you are working market [music] fall you can wait when you're retired your portfolio maybe [music] your salary. This is called sequence of returns risk. And that's why he shouldn't ask only what return will my portfolio [music]
8:20 Generate over 30 years. You should ask what happens if the bad year [music] comes first. The question can completely change how you structure your retirement portfolio and withdrawals. [music] Number seven, irregular expenses. Here is another problem with three lakhs per month monthly budget. Not everything happens monthly. Healthcare is an example. Health insurance premiums, hospitalization, long-term care, medical expenses and there are also other irregular expenses [music] like a new car, home repair, a family event, a long trip to US. None of these arrive nearly as 25,000 rupees per month. but they're still real retirement expenses. So just don't create a monthly budget, create a special bucket for these large irregular [music] expenses. And then we have number eight which is the legacy goal. Now Arvind
9:22 Tells his wife, I want to leave at least 2 cr to go to the children. Perfectly reasonable [music] but this is another goal that the retirement plan needs to satisfy. And here is the important distinction that doesn't necessarily mean the 2 cr has to sit untouched [music] from day one. It means a retirement plan needs to be designed so [music] that under this assumption he has a reasonable chance of meeting the goals of funding his retirement and also leaving something [music] behind for the kids because retirement planning isn't just how much can I spend it also how much do I [music] want to live for the kids you can't give the same rupee to different jobs planning for both.
10:11 So now that we have added taxes, inflation, longevity, social security,
10:17 Currency [music] risk, market crashes, irregular expenses, and legacy and do you think is 8 cr enough for retirement? But wait, because now something happens that can completely change Arvind's retirement plan and this is called the other income. Let's say Arvin [music] gets a call from a old colleague. He has a startup. He wants Arvin to advise the company two mornings a week. No office, no management responsibilities, [music] just work Arvin actually enjoys. And for that, he's going to get 75,000 rupees a month. That's 9 lakh a year. And at 4% withdrawal framework, generating 9 lakh a year from the [music] investments would correspond to roughly 2.25 25 crores of portfolio. [music] Now doesn't mean consulting income is literally the same as having 2.25 crores invested. The consulting income could stop the work
11:19 Could change. Taxes apply. There is uncertaintity but mathematically it shows the power. Even the modest income after retirement changes the amount [music] of corpus you need. And this is especially relevant for NRIs in their
11:34 50s [music] and 60s. You have decades of experience and if you enjoy it, don't automatically assume retirements means zero income [music] because there is a huge difference between I will never earn another rupee and I never again need a salary to survive. This is not the same thing. This is how I actually think about your retirement number. Don't have just one number. have three. Number one, survival number. What do I absolutely need every month? Housing, food, utilities, insurance, essential healthcare, basic transportation. [music] These are the things that you can't easily cut out. Second, lifestyle number. What does the retirement I actually want cost? travel, restaurants, [music] hobbies, helping family, visiting children abroad, better healthcare, the lifestyle [music] you actually want to live. And finally, it's a freedom number. How much [music] do I
12:34 Need? So, I constantly don't have to worry about money. Markets crash, unexpected medical expenses, a major family expense, currency moves, one spouse lives much longer. That's [music] your freedom number. And these three numbers can be very different. Let's go back to Arvin situation. 8 crores, three lakhs per month. Is it enough? We know it's a three lakh is an after [music] tax spending target. We know inflation means the number grows. We know it's a joint retirement. His wife who is 4 years younger. We know social retirement benefit starts at age 62. So there are phases in his retirement. We know some expenses will be in dollars. We know a bad market can change everything. We know a large one-time expenses [music] needs their own line or their own
13:31 Bucket. We know a 2 crore legacy means only 6 crores is available to spend [music] and also 75,000 rupees per month an optional work can replace crores of required corpus. So is 8 crore enough to retire or three lakhs per month? If 8 crores includes your house, no. You're not even [music] starting with the right number. If you have to leave a large inheritance, 8 crore might look tight, very tight. But if the corpus is genuinely investable, housing is sorted, other income starts, spending is flexible, big expenses already taken care, [music] and you're open to some enjoyable work. The same 8 crore [music] supports a completely different retirement. So when someone asks me is 8 cr [music] enough to retire in India, I think they are asking the wrong question. The better question is how much do I actually need
14:32 To spend every month? Is that number before or after tax? How much my net worth is really investable? How long does this money support both the family members? [music] What income would come later? What happens to pension funds, retirement, social security? How much of the future spending will still be in dollars? What happens if the market falls 20% in the first 5 years? [music] How much should you reserve for healthcare? any large expenses that you need to [music] incorporate, how flexible are you with the spending and how much do you want to leave behind? And [music] finally, do I want zero income after retirement [music] or I simply freedom from needing a job?
15:18 Because 8 crores isn't just really one number. its collection of jobs, monthly living, inflation, [music] healthcare,
15:26 Travel, market down, family legacy, and most importantly the freedom. The real question isn't is 8 crore enough. The real question is how many jobs am I asking this 8 cr to do? And once you answer that, your retirement number becomes [music] much easier to understand. Now I want to know what your retirement number looks like. [music] Drop two numbers in the comments. Your expected monthly spending [music] in India and your investable corpus that you have. For example, three lakhs, 8 crores, [music] 2 lakhs, 5 crores, 5 lakh, 12 crores. Whatever your numbers are, I'm going to look at the common combinations and [music] break them down in the future. If you are an NRI planning to move back, don't forget to subscribe. Until next time, take care.
Your RNOR window, retirement accounts, and move date planned as one sequence.
