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Read this before you dream up your retirement home!

November 27, 2020


The golden rule with respect to retirement planning is that you start saving up from the day you start earning. That doesn't happen for most people because of a myriad of reasons - student loans, taking care of younger siblings and parents and if there's no financial burden then one might probably spend a lot on lifestyle. Saving up for retirement generally starts around the time when kids are in school and one's expenses eat up most of the monthly income.

However, you work hard to save up a nest egg for your retirement despite the challenges. As such, buying a retirement home is a major expenditure from those savings. The wrong place or the wrong home can undo a lot of the retirement savings you've worked so hard to achieve.

Here are a few factors you should consider before buying a retirement home:

Are you buying your retirement because it's a good investment or a good deal?

Buying a retirement home is more of an emotional decision than a financial one. While you want you have a nice place to enjoy the second innings of your life, don't give in to the temptation of a good deal that may turn out to not actually be a good investment. For instance, one might think that a cheaper house in the suburbs would be a good idea. In that case, evaluate how the property prices have appreciated there in the last decade. It's not a good idea to make the purchase if they have been going down or only marginally increasing. Financial planning is all about giving yourself the freedom of choice and insuring yourself against unforeseen circumstances. Buying a home just because it seems like a good deal now will hurt both the goals.

Is the location ideal or are you making any sacrifices?

There are a few things you need to keep in mind before deciding on the location of your retirement home: a) it should be close to good clinics and hospitals as healthcare issues get more frequent in old age; b) it should be close to where your friends and family live - what good is retirement for if you can't meet your dear ones when you feel like; c) it should have easy access to services like domestic help, laundry, grocery stores and other everyday needs; d) retirement is when you have ample time for recreation - the location of your home should be close to a park where you can stroll regularly, cinemas, a library and perhaps your club.

How much does the cost affect your future finances?

Evaluate your financial needs for the next two decades such as health bills and travel. If your children aren't financially independent by the time you retire, you might also have to consider the cost of their higher education and other expenses. Most importantly, you should also have enough legroom to be able to spend when you feel like on stuff like the first bicycle for your grandkids, creating a personal library or learning something you were always passionate about but couldn't find the time to pursue.


Planning is just as important as saving when it comes to retirement. Choose your home wisely. It's never too early or late if you want to start saving up for your dream home. You might want to consider a ULIP (unit linked insurance plan) from HDFC Life. The two biggest financial goals of retirement generally are a home and protection against health emergencies. ULIPs combine the best of both worlds by extending a life cover and building an investment moat. HDFC Life Click 2 Wealth also comes with the added benefit of Golden Years Benefit option to plan for your retirement and offers the unlimited flexibility of switching between 10 funds whenever you wish to.


Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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We at HDFC Life are committed to offer innovative products and services that enable individuals live a ‘Life of Pride’. For over two decades we have been providing life insurance plans - protection, pension, savings, investment, annuity and health.