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How Much Money Do You Need to Retire in India?

Author: Jacob Davis

The benefits of retiring in India can be abundant but the effort required can be exhausting. For those with ties with India, retirement to the subcontinent is a relatively simple endeavor; for everyone else, there are significant administrative obstacles. (For an overall look at the advantages and disadvantages of retiring outside the United States, read Retirement: U.S. Vs. Abroad.)

Moreover, even for those with such ties, India may not necessarily be the ideal location, due to cultural and language differences and disparities in the lifestyles of rich and poor. Such culture shock was dramatized in "The Best Exotic Marigold Hotel," the 2012 film about British retirees who relocate to Jaipur. Still, retirees – Americans included – who are eager to taste a different lifestyle will find that modest assets can secure inexpensive accommodations in India, along with diverse options for both urban and rural living.

Unlike some countries that welcome foreign retirees, however, India has erected barriers that make it difficult – though not impossible – for many Americans to relocate there during their golden years. The first step for anyone considering such a move is to figure out whether it is feasible.

Your Classification Determines Your Options

For those interested in retiring in India, regulations for taxation and other matters are applied according to three separate classifications of potential residents. It's critical to determine which of these categorizations is appropriate:

• Person of Indian Origin (PIO). A person is deemed to be of Indian origin if he or she – or any parents or grandparents – was born in undivided India.

• Nonresident Indian (NRI). An individual who is a citizen of India or a person of Indian origin who does not reside in India.

• All citizens of countries other than India.

• Overseas Citizens of India (OCI). This confers a multiple lifelong visa that enables the holder to have unlimited travel and stay in India.

According to the Indian Government, nearly 22 million Indians live in more than 200 countries around the world. About 12 million are Persons of Indian Origin and 10 million are Nonresident Indians. It's worth noting that the largest concentration of PIOs and NRIs – 2.2 million – resides in the United States.

In May 2015, India's Union Cabinet agreed to review its Foreign Direct Investment Policy in an effort to provide PIOs and OCIs parity with NRIs in respect of economic, financial and educational fields, thereby defining investment from all three groups as domestic rather than foreign.

The Visa Route

But what about all the other people with no such connections to India? What are the options for Americans with no blood or marital ties to Indian citizens or emigrants? Often, they are rather limited.

For this group, the best option might be to consider some of the basic types of visa for travel to India:

• Tourist Visa. Valid for 180 days with multiple entries, but not extendable.

• Employment Visa. Generally valid for 1 year or the period of a work contract with multiple entries; it can be extended.

• Business Visa. Valid for 5 years and extendable, with multiple entries.

If your definition of retirement is no longer working, India may not be the right locale for you. But for Americans interested in working part-time, there may be ways to utilize an employment visa or business visa.

However, there are caveats; according to the U.S. State Department, for example, some visas require holders to spend two months outside India before re-entry is allowed.

Assessing Costs

For those who do find a way to retire in India, the financial climate will prove quite welcoming, with some of the lowest expenses in the world. We've used the cost-of-living site Numbeo to determine prices for the basics. (For other considerations, such as healthcare, read Things to Consider Before Retiring Abroad.)

• Housing. For a one-bedroom apartment, monthly rent averages from 6463.83 Indian Rupees (INR) (approximately $98*) outside urban areas to 10,369.31 INR ($157) in city centers. Monthly rent for three-bedroom apartments average from 15,832.76 INR ($240) outside urban areas to 24,850.60 INR ($376) in city centers.

• Utilities. Basic utilities – including electricity, heating, water and garbage – should run about 2,037.08 INR ($31) per month.

• Dining. Eating out for a three-course meal at a mid-range restaurant for two people costs about 550.00 INR ($8). Meanwhile, a meal at an inexpensive restaurant costs about 125.00 INR ($2).

• Transportation. A monthly pass on local transport ranges about 550.00 INR ($8). For benchmarking purposes, a gallon of gasoline costs about 261.39 INR ($4).

The Bottom Line

The average monthly disposable salary after taxes in India comes to about 31,158.73 INR (approximately $472). Although prices vary throughout the country, such low average costs obviously mean the average American has plenty of options when it comes to retiring in India. In fact, a monthly disposable income of twice the Indian average – about $1,000 – can translate into a very comfortable standard of living.

* All currency conversions calculated through XE Currency Converter, effective November 6, 2015.These rates fluctuate daily

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