Old Age Home Expense And How Much Does It Actually Cost In India?

If you're nearing retirement anytime soon or started your hunt for old-age homes, you might find this blog on "how much will it cost to live in an old-age home" insightful. Well, what made me to come up with this blog is, I had a conversation with an old age couple a few days back. They're planning to settle in an old-age home and are quit doubtful regarding the expenses. If you too can relate to this scenario, delve into this blog.

Old Age Home Expense And How Much Does It Actually Cost In India?

Let me give you a basic assumption of old-age home expenses for a couple. Suppose you need an old-age home with basic amenities.

Rs.15,000 - Rs. 20,000 (per month, per head) - This cost is a basic one (Food, Groceries, EB, DTH, Laundry, mobile recharge, etc.,) and doesn't include medical expenses and initial deposit (ranges from Rs. 1 lakh to Rs. 20 lakhs per couple based on the amenities they provide), which differs from one old-age home to other.

The couple whom I referred in the beginning of this blog are of the age 50+ and are planning to shift to an old-age home in next 10 years. All they need to know is the amount of money they need to allocate each year for residing in an old-age home.

Let's assume the cost as Rs. 20k per month, per head. The rough estimate goes like this:

2022 - Rs. 20,000 X 12 = Rs. 2,40,000

2032 - Rs. 40,000 X 12 = Rs. 4,80,000

2042 - Rs. 80,000 X 12 = Rs. 9,60,000

2052 - Rs. 1,60,000 X 12 = Rs. 19,20,000

So, how much corpus do you need when you retire in 2032 to accommodate your old-age home expenses? It's Rs. 4,80,000 X 12 =  Rs. 1.44 Crores

So, you need to have Rs. 1.44 Crores in a Fixed Deposit (or any other financial instrument), which should yield you a 6% return post tax, which comes out to be Rs. 8,64,000 for an year. You will use Rs. 4,80,000 for your Old Age Home expense and reinvest the balance Rs. 3,86,000 again into the Fixed Deposit (or any other financial instrument) so as to fight against the Inflation which would increase the cost of living gradually, every year.

The above assumed calculations are for a single person. If you are a couple, then the amount you see above doubles. So the couple whom I referred needs Rs. 2.88 Crores allocated for Senior Citizen retirement home when they are retiring in 2032.

Get to know about the Financial Habits of Rich People so that you can plan for bigger corpus for your retirement life.