Many of my Indian friends might be under a dilemma as to when to avail early retirement from their jobs in India. This early retirement might help some of them to come over here and settle in this country as they have been able to obtain green card here. The to and fro visits to India on account of their jobs is very expensive and cannot be afforded. Early retirement is the only solution for such persons. The question is at what financial level, one can afford to take early retirement in India. Many big multinational companies have started offering attractive schemes to their employees in India with a purpose of reduction in manpower due to introduction of computer operations in most of the areas. Many employees have been able to convert this threat of technology into an opportunity. I am one of them and have availed early retirement to come and settle here in this country.
The financial needs of the persons vary a lot in India depending upon their place of stay. If you happen to stay in Metro cities like Mumbai, Delhi. Calcutta, Chennai, and Bangalore, your financial need will be too high to maintain same standard of living after the retirement. While in other B, C. and D type of cities, it will be remarkably less. The most important aspect of the early retirement is you must have sufficient financial funds to sustain your same standard of living even after retirement. The most optimum age for early retirement is 55 years, based on retirement age of 60 years in most of the Indian establishments. The most schemes of early retirement offers you your basic monthly salary and the dearness allowance at the rate of 2 month’s salary per year of the service put up or the salary of the total remaining months of service. That means that if you have started your service at the age of 25 years, you would have put up service for 30 years, making you eligible to get 60 month’s salary at the age of 55 years, optimum time of your early retirement. You will also be entitled for 60 salaries based on your remaining service of 60 months at the age of 55 years. So, 55 years can be considered as the optimum age for the early retirement.
Now comes the vital question whether you have sufficient finance available with you at this stage to maintain same standard of living for at least 25 more years, considering that you will live for about 80 years. First of all make sure that you do not have any liabilities left of the children. They are all married and do not need any kind of financial support from you. You must have your own house in India, fully paid up, clear in your name. The next important aspect is to make a suitable investment that can fetch you good monthly income. Based on today’s cost of living in India, you may need around Rs.15000 per month in B and C type of cities to maintain family of two. The yearly inflation can be considered at the rate of 5% per year. That means that you will need around Rs.35000 per month after 30 years to maintain same standard of living. This means that you should have capital of at least four million rupees to fetch you an interest of Rs, 27000 per month at the rate of 8% per anum. If you happen to live in metro cities, you may need around Rs. 25000 to maintain your family of two to maintain same standard of living. The capital required in this case will go up to around rupees six millions for survival for the next 25 years with same standard of living. This capital will fetch you the interest of around Rs. 40000 every month now onwards and can be sufficient for you to live for the next 25 years. Keep in mind that these are the most probable figures and it will depend upon your present standard of living along with many other uncertainties. Your physical fitness will also play a very vital role in your decision of early retirement. You will have to cover yourself with a very good insurance policy, wherever you stay. Obviously, insurance cost will be too high if you happen to stay in USA.
I have tried to give the rough idea as to when anybody can afford early retirement under the present Indian conditions. There are too many ifs and buts in these figures and are to be treated as indicative figures only. But, one thing is for certain. Early retirement at less capital level mentioned in this article may not help you unless you have some other income sources available with you.
I sincerely hope that the data and analysis given by me shall help my friends to reach correct decision in this most critical aspect of life. I am enjoying my retired life fully and have no regrets whatsoever on my decision of early retirement. My simple advice to all is to think coolly but once decided, go for it with full confidence and courage and everything will workout just fine.