This Map Shows How Much You Should Save for 20 Years of Retirement in Different Indian Cities


How much do I need to retire?

While 47% Indians aren’t saving for the retirement, knowing how much you need to save is probably the most pertinent question for most of us who wants to save and invest.

‘There are three things that matter in property: location, location, location.’ 

The late Lord Harold Samuel, a real estate tycoon in Britain, coined this expression. The phrase is equally applicable to your retirement decision. The decision of where to retire impacts how much money you should save for retirement in a big way.

In this article, we present an analysis to determine your retirement amount depending on the city of your choice.

Where do you need the lowest retirement saving amount?

This map shows how much money you need to sustain financial freedom (or retirement) for 20 years in different Indian cities if you retire tomorrow.  It has been assumed that this amount will earn an annual return of 7.5%.

The city for which you need to save the least for retirement is Thiruvananthapuram. With just INR 98 lakhs, you can chill for 20 years in retirement, bathing in the calmness of care-free life. A major academics and Information technology hub, the city is ranked among the best cities to live in India in many surveys.

Navi Mumbai comes a close second. Staying close to Mumbai, at Navi Mumbai, you can enjoy retirement pleasures for 20 years in just INR 1 Cr.

The next three cities are Mysore, Vishakhapatnam, and Bhopal, each requiring retirement saving of less than 1.15 Cr.

Rank City Current Annual Expense (INR) Lifetime Expense (INR) Retirement Saving (INR)
1 Thiruvananthapuram 1265021 4,18,29,119 98,47,125
2 Navi Mumbai 1314718 4,34,72,406 1,02,33,976
3 Mysore 1452192 4,80,18,121 1,13,04,097
4 Visakhapatnam 1453483 4,80,60,804 1,13,14,145
5 Bhopal 1467682 4,85,30,314 1,14,24,674
6 Guwahati 1485754 4,91,27,873 1,15,65,347
7 Vadodara 1490917 4,92,98,604 1,16,05,540
8 Bhubaneswar 1490917 4,92,98,604 1,16,05,540
9 Kochi 1501889 4,96,61,408 1,16,90,948
10 Nagpur 1513507 5,00,45,553 1,17,81,381
11 Coimbatore 1516734 5,01,52,260 1,18,06,501
12 Mangalore 1523188 5,03,65,674 1,18,56,742
13 Surat 1558041 5,15,18,109 1,21,28,040
14 Hyderabad 1589021 5,25,42,495 1,23,69,194
15 Indore 1618065 5,35,02,858 1,25,95,276
16 Lucknow 1638718 5,41,85,782 1,27,56,046
17 Ahmedabad 1645818 5,44,20,537 1,28,11,310
18 Jaipur 1647109 5,44,63,220 1,28,21,358
19 Panji 1660017 5,48,90,048 1,29,21,839
20 Kolkata 1660017 5,48,90,048 1,29,21,839
21 Chennai 1686479 5,57,65,045 1,31,27,825
22 Chandigarh 1703906 5,63,41,262 1,32,63,474
23 Pune 1747794 5,77,92,477 1,36,05,109
24 Noida 1767802 5,84,54,060 1,37,60,854
25 Thane 1801364 5,95,63,812 1,40,22,104
26 Bangalore 1881396 6,22,10,144 1,46,45,086
27 Delhi 1884623 6,23,16,851 1,46,70,206
28 Gurgaon 1909794 6,31,49,165 1,48,66,144
29 Mumbai 2042750 6,75,45,490 1,59,01,097

Cost of Living

The percentage cost split is a bit similar for different cities. Let’s have a look cost-distribution of Gurgaon.

While the market category, which consists of products such as vegetables, fruits, beers, cigarettes and water is the biggest category, the key driver for the expense is, of course, the rent. The cities with high rent expense generally have a higher total cost of living.

Here is How We Did This Analysis

We collected the data for the cost of living index for different cities in India from Numbeo. The estimation provided this for Indian cities is based on 93809 entries made from 7638 contributors in the past 18 months.

We then calculated the cost of living in Gurgaon based on assumptions mentioned below. Our assumptions:

  • Number of members in the household to support – 4
  • Eating lunch or dinner in restaurants – 10% of the time
  • When eating in restaurants you are choosing inexpensive restaurants – 70% of the time
  • Drinking coffee outside your home – Moderate
  • Going out for cinema etc. – Very low (twice per month per household)
  • No smoking
  • Alcoholic beverage consumptions – Low
  • Asian foods consumption at home
  • Driving car – moderate
  • Taking a taxi – no
  • Paying for public transport – 1 family member monthly
  • Sports Membership – 1 household member
  • Vacation and travel – Twice per year (1 week each), relatively inexpensive
  • Buying clothes and shoes: Moderate
  • Rent: Apartment (3 bedrooms)
  • Number of your children going to kindergarten – 0
  • Number of children going to private school – 0

Based on the data of Gurgaon, we have calculated the cost of living in different cities.

Further, we have considered that inflation in India will ~5% on an average for the next 20 years. This inline with the data statista.  In addition, we considered the return for the retirement savings to be 7.5%, which is a typical return for a PPF investment.

Suggestion for Retirement Saving

When planning for retirement, the truth is that the earlier you start saving and investing, the better off you’ll be. However, no matter when you start, you can follow these steps to increase your retirement saving:

  • Don’t get restricted with traditional saving options 

While traditional saving options such as PPF are good options to protect your capital, investing in diversified asset classes based on your risk profile, you can earn better returns. In this study, we have considered an annual return of 7.5% on retirement saving, which we believe can be easily achieved and even beaten.

  • Limit your cost of living:

Don’t be tempted to increase your cost of living whether by increasing consumptions or adding a few extra trips when you get raise or bonus. Invest your raise and bonus for retirement saving.

  • Limit expense on kids

While spending for kids education and passion is fine, don’t burn your saving by doing destination birthday parties or gifting a new iPhone every year.

  • Save on medical expense

Healthcare cost is generally the biggest barrier to saving for retirement. You should definitely have a health insurance coverage for you and your family.

Written by

Ajitesh Abhishek