Invest In India

Best Future Retirement Plans for NRIs

February 26th, 2010

Malvika

Retirement planning is usually the most ignored saving motivator for NRIs. In future, NRI will not stay only at one place, till their retirement or change employers. NRI have to be mentally prepared for that. But the right age for the retirement planning is when they are young and are earning well. Whether they have just begun working or are at the end of their career, they should make a good plan to achieve their retirement goals. It is the good time, not too early or not too late.

There is multistage retirement path which needs a multistage access to investing. In the first stage they can start investment with some income from part time work or side income after retiring from their main career. In the second stage they can start investment in the following portfolio: (1) Midcap stock 10% (2) Small cap stocks 10% (3) International stocks 10% (4) Short-term fixed income 30% (5) Large cap stock 40%. They should invest in both short term and long term growth.

At the age of mid or late twenties, they should invest about 50% to 60% of their income in some plans like Equity linked plans, Pension plans, Life insurance or a SIP of a mutual fund. They can invest the rest income in Tax saving schemes to deduce dual advantage of benefit and healthy coming back. At the age of mid thirties, they should have a balance investment portfolio with about 30% to 40% exposure to equity and the rest income in fixed income instruments.

If they still have over twenty year to retire, at the age of mid forties, they have to do investment must be 85% in instruments like employees like Employee Provident Fund (EPF), Public Provident Fund (PPF), Post Office Monthly Income Scheme (POMIS), National Savings Certificate (NSC) and 15% balance in a Pension plan.