When we reach our 50s, we usually start reflecting on what’s ahead while taking stock of what we have achieved and planning for the next phase. If life were a one-day cricket match, turning 50 would be like entering the slog overs—a critical phase where every move counts and our actions and decisions can make or break the game.
Early retirement planning is a necessity to chart out a secure financial future. (at least financially) As an NRI in your 50s, you might be contemplating the next transition in your personal and professional life. If you’re a business owner, you might be considering options such as expanding your enterprise, relocating it to India, or gradually planning an exit strategy. As a professional, you may think about how to grow in your career, a career change, a phased retirement, or shifting to consultancy or mentorship roles. Whatever your situation, retirement planning is critical to align your financial goals with your life decisions. It will:
- Ensure your income security for the next 20 to 30 years
- Help manage unexpected expenses – like health emergencies or other short-term commitments
- Protect the financial future of your family
Strategize your second innings
Life after the 50s can be considered as a second innings in a test match. Some NRIs might enter their second innings after playing well in the first innings (till the late 40s), i.e. achieved most of their financial goals, and others might not have done well. The strategy is different depending on your situation. You need to decide on the course of action in your professional life. You have to determine where you will stay and what you intend to do post-retirement. These decisions depend on your finances and your family situation.
For instance, Mayur, a successful corporate executive based in Dubai, decided to transition from his banking job to follow his passion for the outdoors by setting up an adventure company. While the idea is exhilarating, it requires meticulous financial planning to ensure financial security of his family. He should have an emergency fund that can take care of living expenses when the business is in its initial stages. He must ensure that insurance and children’s education is taken care of.
Here is an action plan for NRIs in their 50s for their retirement:
Evaluate your net worth
Create a comprehensive net worth statement that outlines your assets and liabilities globally. This will help you understand how much money you have, whether it can cover your retirement expenses, and how much you need if your net worth cannot cover your life post-retirement.
Plan your transition
If you plan to relocate to India, you need to do significant groundwork, including decisions on investments, children’s education, and managing your financial inflows to ensure a smooth transition. You need to understand the effect of becoming a resident Indian on your investments in the country of residence and globally and related investment income. You will have to manage tax optimally.
Once you move to India, you will need to take care of practicalities like your place of stay and a sufficient cash flow to cover expenses. Planning in advance, you can adequately channel investments, remit funds to India, and create a strategy to satisfy short-term and long-term financial needs.
Insure your health
Health requires more attention as we age, making timely health insurance planning essential—If you are considering retiring in India, it is wise to purchase health insurance 2–3 years before your move. It will ensure comprehensive coverage at reasonable premiums and minimize the risk of exclusions due to pre-existing conditions. Another smart strategy is to opt for a top-up plan. With this, you handle minor medical expenses out-of-pocket while the policy covers major health issues and medical emergencies, keeping premiums manageable.
Go debt-free
Getting debt under control is critical to being retirement-ready. Debt eats into income and can prevent you from affording things. It is important to pay credit card dues regularly, pay off your loans, and live within budget
Learn, learn, learn
Learn from the experiences of retired individuals to avoid common mistakes. In the first five years after retirement, many retirees tend to overspend on travel, lend money, invest in risky schemes, and lose money. Without a proper asset allocation plan, retirees run the risk of eroding their purchasing power due to inflation and falling interest rates. You might end up withdrawing more from your corpus, resulting in capital erosion.
Work with a financial planner
Engage the services of a financial planner with experience working with NRIs and NRIs in your income group and age groups. They will help you navigate the complexities of investments and NRI regulations and also leverage their experience and expertise to create an optimum plan for you. Work with your financial planner to assess your progress towards financial goals, making adjustments as needed to ensure that you build a retirement fund needed to sustain your lifestyle.
Lead a balanced lifestyle
Managing your lifestyle wisely is key to long-term financial stability. It is critical to reassess spending habits and adopt a disciplined saving approach, especially as your income grows. It is tempting to upgrade your lifestyle and splurge on worldly things, straining your cash flow. Over time, you may get used to it, making it difficult to have a simpler life post-retirement if needed. It may also set unrealistic expectations for your children, who could struggle to adjust to lower income levels. Staying mindful and intentional about these choices will help sustain a more balanced lifestyle.
If you haven’t started planning for retirement yet, the game is far from over. Just like a few well-timed boundaries in the final overs can change the game, smart financial decisions now can help you secure a good post-retirement life.
