For many Indians working abroad, returning home is often seen as a financially comfortable move, based on the belief that living costs in India are still far lower than in Western countries. However, financial experts caution that this assumption can lead to serious miscalculations, especially for families planning early retirement or relocation.
A recent case shared by SEBI-registered investment advisor Vivek S G highlights how outdated perceptions can create major financial gaps. He spoke about a 44-year-old professional based in Europe who planned to return to India within six months with his wife and two children, hoping to transition into consulting work. During their initial discussion, the individual estimated that ₹40,000 per month would be sufficient to sustain his family.
This estimate, however, proved to be far from reality. When asked about school fees in cities like Bengaluru and Mumbai, he assumed they would be around ₹5,000–₹10,000 per month. In reality, private schooling costs have increased sharply, with fees ranging from ₹15,000 to ₹30,000 per month, while international schools can charge ₹50,000 or more. For a family with two children, education expenses alone could exceed the initially estimated monthly budget.
Rising inflation has further added to the financial burden. Medical inflation in India is estimated to be around 14%, while food inflation is close to 10%, both significantly impacting household expenses over time. Even lifestyle costs have increased, with a simple weekend dinner for two in a metro city now costing between ₹2,000 and ₹4,000.
After factoring in all essential expenses such as education, healthcare, food, and lifestyle needs, the revised monthly requirement came to around ₹1.5 lakh—nearly four times the original estimate. This gap also meant that the individual’s retirement corpus needed a substantial revision.
Financial planners note that such misjudgments are common among NRIs who rely on outdated information or past experiences. Many continue to view India through an old lens, unaware of how rapidly costs have risen in urban centers.
While India may still offer a relatively lower cost of living compared to Western countries, the difference has narrowed significantly in major cities. This makes it essential for those planning a return to reassess their finances based on current realities rather than past assumptions, ensuring a smoother and more secure transition.
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