Retire in India and live off interest payments?

capt_mahajan

RBI bonds nowadays give 8 percent, and the interest is taxable at normal income tax rates. There is no investible limit

So do post office monthly income schemes (the eight percent is paid out to you monthly, so if you put in 3 lacs (the maximum per head allowed), you get 2000 rupees a month for five years, at the end of which you get your 3 lacs back. The earlier provision of giving you the 10 percent (30000) as a bonus at the end of the 5 years has now been stopped. The interest (24000/year) here is taxable.

There are other small savings schemes presently giving 8 percent, all taxable.

And these schemes are available to resident indians only.

Nick-H

Curious: the RBSI site says 8%, the UTI bank site says 8.5%. I'll have to check more carefuly they're talking about the same thing.

Resident Indians only? That doesn't surprise me.

Mrs N? Hello?

Anyway, I've dubbed her our Treasury department. I just can't be bothered with monitoring interest rates and moving stuff around accordingly. Very boring. But I'm quite happy to spend the result

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capt_mahajan

UTI Bank is mistaken, for once.

haritha

So all of you coming to India for staying longer

welcome

eater

Quote:

Originally Posted by Nick-H UK has schemes whereby you can, after a certain age, "sell" your house in return for an income.

Something similar in Canada called "reverse mortgage"....

http://www.canadianmoneysaver.ca/art...icle_ id=1073

"Reverse mortgages have been used in France for
at least 100 years, and in Britain and the U.S.
for over thirty years. House-rich but perhaps
cash-poor Canadians with homes have had this
financial planning option available for at least a decade. In
principle, they provide a homeowner with access to capital
based on the owner’s primary residence in exchange for a
loan commitment that sees the loan repaid with interest
from the ultimate sale of the property. This loan repayment
occurs typically when the house is sold, the owner(s) moves
out, or dies."

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capt_mahajan

Reverse mortages have just started (last month) in India too. Give it a year, and they should be pretty standardised.

http://www.moneycontrol.com/india/ne...article/236656

sego

Just worked out my pension online with the wife one also, it would pay about 3 lakh a month total, I guess that could do a comfortable retirement in India. Naw, I would like to visit for a few months down Southern India yearly, and spend the rest in Canada with the grandkids.Love the Cold North.

haritha

good idea

joseph08

well, its nt necesary that one needs to be 60 yrs old for post office or provident fund deposits ..moreever the interest rate s not 9 % its 8% only...postoffice deposits are taxable , while PPF ar not..no age limit for openi ppf.10 yrs age limit for post office scheme..
what abt such schemes in your country or in US/UK Europe/Australia/canada etc..is there such fixed income schemes there too..??

capt_mahajan

senior citizens get 9% in the post office.

and, in future, I wouldn't be surprised at some form of taxation on PPF too; the government has already indicated this.

The government is now actively discouraging investments in these so called 'small savings schemes'. As an example, Bank FD rates are on par with rbi bond rates for once, and the 10% 'bonus' on maturity on post office deposits has been withdrawn.

The idea is (I think) to encourage more people to invest in mutual funds and thereby the stock market. While that may be good for middle class investors, I wonder what it does to the millions of others who do not have any appetite for risk due to their financial circumstances and their level of awareness of the stock market.

joseph08

oh god, i literally hope govt wont implement taxation in Ppfs.while they govt wants its citizens to invest in stockmarkets & mutual fonds, those always carry a Risk ...the govt is not cosidering its poor citizens-for them schemes like PPfs are a big blessing and the removing of 10%bonus on PODeposits was realy questioning their own survival..im a middle class person , though i know stocks & mutual funds give muvh higher interest than ppfs, thers no guarntee that they always will unlike PPfs, where hopefully a steady 8% interest s tere..
Hope the govt provide schemes that benefit the common man and not the rich..

sego

Joseph, in Canada there is no such saving type schemes I know. But rest assured all your interest from banks etc. will be taxed to death, not much room for savings from the government.

Spirit of Havelock

I knew some guys that owned a modest property in the West, and the rent revenue was enough to set them up in India for life.

Unfortunately, some of these guys had a "party every night" mentality (to ward off boredom), and after a few years, this lifestyle choice has a price both physically and psychologically. Also, after about a year, the novelty of living out of a suitcase wears a bit thin. In the hang-out towns, there are so many great fellow travellers to meet, but because they are merely passing through, if you lived there, you would be forever saying goodbye to people; and constantly forming new temporary relationships can become a bit of a drag. Being on holiday somewhere is not the same as living there. The other permanent residents in the town will be Indian, and even if you learn the local language, you will always be an outsider. Other resident Westerners might also be stoners of the type already mentioned. In essence, unless you marry somebody from India (like I did) the whole life in India scenario can be very alienating - you end up in a lonely no-man's land: not a tourist, not a local - an immigrant without the support of an immigrant community.

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04274108

Nowhere near as close as that but currently, Bank of Montreal has a dividend yield of 3.7%. Some transition at the bank so there could be some volatility but long term, Canadian banks are very conservative investments with appreciating dividends.

Jasmin

Really interesting thread everyone. Nick do you live permanently in India now, or just part of the year?

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