Breaking Down the Numbers: Retirement Costs in India vs. the USA

Retirement planning is a crucial aspect of financial security, and the cost of living during these golden years varies significantly across countries. Let us compare the retirement costs in India and the US, and explore the benefits of housing for senior citizens, particularly for NRI retirees.

What is ‘Cost of Living’?

Cost of living refers to the amount of money needed to sustain a particular standard of living. It encompasses essential expenses such as housing, food, transportation, healthcare, and taxes. Comparing costs of living is crucial for individuals who are about to retire soon or have already retired.

Analysing Retirement Costs in India and the US

Retiring in India offers a significantly lower cost of living compared to the US. Housing, food, transportation, and healthcare are generally more affordable, allowing retirees to stretch their savings further. While the cost of living varies across India, with metropolitan cities being more expensive, it is still notably lower than most US cities. This economic advantage, coupled with India’s rich culture and diverse landscapes, makes it an attractive retirement destination for many Americans.

Cost of Living Index

A cost of living index provides a comparative measure of expenses. While the overall cost of living in the US is significantly higher than in India, the gap narrows when considering specific categories like housing and healthcare, particularly when it comes to housing for senior citizens.

• Housing: Housing costs in India are significantly lower than in the US, especially outside of major metropolitan areas. While monthly rent for a modest apartment can range from INR 10,000 to 50,000 (approximately USD 120 to 600) in Indian cities, comparable accommodations in the US would typically cost between USD 1,000 and 3,000 per month.
• Healthcare: Healthcare costs vary dramatically between India and the US. While the US boasts cutting-edge medical facilities, healthcare expenses can be exorbitant, often reaching upwards of USD 500 to 1,500 for routine procedures. In contrast, India offers a more affordable healthcare landscape, particularly with the growth of medical tourism. Common treatments in India can range from INR 3,000 to 10,000 (approximately USD 37 to 122).
• Food: Food costs are generally lower in India compared to the US, especially for staple items. A monthly food budget in India can range from INR 5,000 to 15,000 (approximately USD 60 to 180), while a similar budget in the US would be USD 400 to 800.
• Utilities: Utilities such as electricity, water, and gas are considerably cheaper in India compared to the US. Monthly utility bills in India typically range from INR 2,000 to 5,000 (approximately USD 25 to 65), while in the US, they can be significantly higher, often ranging from USD 200 to 400.
• Transportation: Transportation costs vary significantly between India and the US. In India, public transportation is widely available and affordable, with monthly expenses typically ranging from INR 2,000 to 5,000 (approximately USD 24 to 60). In contrast, owning a car is often necessary for daily life in the US, leading to higher transportation costs, usually between USD 300 and 600 per month.
• Entertainment: Entertainment costs are generally lower in India than in the US. Enjoying dining out, movies, or other leisure activities can typically be done for around INR 2,000 to 5,000 (USD 25 to 65) in India, while similar experiences in the US often cost between USD 200 and 400.
• Miscellaneous: Miscellaneous expenses can range from INR 3,000 to 8,000 per month in India (USD 36 to 96), while in the US, it’s typically between USD 300 and 600.

A retiree in India can expect to spend between INR 25,000 and INR 98,000 per month (approximately USD 300 to USD 1,200), significantly less than the USD 2,500 to USD 7,600 monthly expenditure in the US. This stark contrast in cost of living makes India a compelling choice for retirees aiming to maximise their retirement savings.

Jagriti Dham, one of the finest luxury retirement homes in India, offers premium eldercare facility in Kolkata. It is an attractive alternative to independent living for retirees. For a monthly fee of INR 45,000 (USD 540) for single occupancy or INR 55,000 (USD 660) for double occupancy, residents enjoy a comfortable lifestyle complete with fully furnished AC rooms, regular health check-ups, nutritious meals, and a host of amenities, including housekeeping, laundry services, social events, and recreational facilities. Compared to the estimated INR 98,000 ($1,200 USD) monthly expenditure for retirees living at home in India, and significantly less than the USD 2,500 to USD 7,600 spent by seniors in the US, Jagriti Dham presents a compelling and cost-effective option for a comfortable and fulfilling retirement.

Retirement Savings

The required retirement corpus varies widely based on lifestyle expectations. However, a general rule of thumb is that you need around 80% of your pre-retirement income to maintain a similar lifestyle in retirement. Given the lower cost of living in India, retirees can often enjoy a comfortable lifestyle with a smaller retirement corpus compared to the US. This is especially true when considering the various housing options for senior citizens available in India, such as retirement communities, assisted living facilities, luxury senior living, old age homes, and age-friendly apartments. These options often offer amenities and services that can significantly reduce living expenses, making it easier to maintain a comfortable retirement.

Why is an Old Age Home an Ideal Choice to Stay after Retirement?

While many prefer to live independently after retirement, old age homes offer several advantages:

• Companionship: Living amidst peers can combat loneliness.
• Healthcare: Many homes provide on-site medical care or have tie-ups with hospitals.
• Care: Professional care is available 24/7, including assistance with daily living activities, medication management, and healthcare.
• Security: Round-the-clock security ensures safety.
• Amenities: Modern homes offer facilities like gyms, libraries, and recreational areas.
• Independence: Residents maintain their privacy while enjoying communal benefits.

India: A Promising Option for NRI Retirees

India has emerged as an attractive retirement destination for NRIs. Here is why:

• Cost-effective: The significantly lower cost of living in India can stretch retirement savings further.
• Familiar culture: For those with Indian roots, returning home can offer a sense of familiarity and comfort.
• Quality healthcare: Many Indian cities have world-class hospitals and medical facilities.
• Strong family ties: For NRIs with family in India, it can be an opportunity to spend more time with loved ones.
• Growing senior living options: The number of old age homes and retirement communities in India is increasing, offering a variety of choices.

By carefully considering retirement costs and the benefits of old age homes, NRIs can make informed decisions about their golden years. India, with its affordable living, world-class healthcare, and rich culture, presents a compelling option for a fulfilling retirement.

Note: These are approximate figures and may vary depending on lifestyle, location, the current dollar exchange rate and other influencing factors.