Returning To India At 40 Requires Smart Financial Planning: Here’s What You Must Know

For many NRIs, the idea of moving back to India at 40 is rooted in the promise of a more balanced and fulfilling life. With rising living costs overseas, ageing parents back home and growing confidence in India’s economic trajectory, the trend is gaining momentum among Non-Resident Indians (NRIs) and professionals working abroad.
However, returning home is not just an emotional decision. It requires a thorough financial reality check, careful
planning and a reassessment of long-term goals.

It’s Less About Earning More and More About Securing Your Future

Relocating to India at 40 often marks a shift in financial priorities. It’s less about growing wealth and more about safeguarding what you’ve built. The focus gradually moves from accumulation

to capital preservation, making it essential for resilient financial planning for steady returns. Strategic planning can ultimately determine whether the transition feels financially liberating or becomes more burdensome when you move back to India.

Smart Financial Planning Before Shifting to India

Banking and insurance: Before making any investments, focus on setting a strong financial foundation. Convert your accounts to NRE or NRO for better income tax filing and compliance. It’s advisable to go through the residency rules and potential tax on global assets. Availing health insurance and term insurance plans in India will also be helpful in protecting your money in case of any unforeseen circumstances.

The 3Bucket Strategy: Organising your finances based on when you will need the money can bring clarity and reduce panic during market swings.

For the short term (0–3 years), prioritise liquidity through fixed deposits, liquid funds, or post office income schemes to cover living expenses and emergencies.

For the medium term (3–7 years), focus on stability with moderate growth by considering conservative hybrid funds and corporate bonds.

For the long term (7+ years), invest in growth-oriented assets such as equity mutual funds, index funds, and the National Pension System (NPS) to help outpace inflation. Experts also suggest avoiding overexposure to real estate and maintaining a well-balanced portfolio.

The Hidden Risks

Inflation can potentially double expenses every 12–14 years, while rising and unpredictable healthcare costs can strain savings. Returning NRIs may also face challenges related to taxes, bureaucracy, and lifestyle adjustments. Beyond finances, the emotional transition of moving back home is equally significant and should not be overlooked.
Assess Cost of Living

India offers lifestyle flexibility, but costs can vary widely depending on where you settle. A couple may need around Rs 80,000 to Rs 1 lakh per month in a Tier-2 city, while residing in a metro city may require a higher amount like Rs 2–3 lakh per month. Expenses such as private healthcare, travel, household help, and housing significantly influence the
budget, making it important to test your lifestyle assumptions before making the move.

Create Financial Safety Nets Before You Move

Here are a few simple steps to take to financially secure your future before moving back to India:

Set aside a medical emergency fund covering 2–3 years of expenses
Create a buffer for long-term care, family responsibilities, and major life events
Consider a currency hedge to protect against rupee depreciation
Separate one-time relocation costs from recurring expenses
Consolidate global investments to simplify your portfolio
Stress-test your plan for scenarios like high inflation or low returns.