Many of us are likely to live long enough on this planet to need some kind of assisted living.

How much exactly does staying in an old age home cost? Frankly I have not done enough research to do such a post, but here is some rudimentary info. You will need to do more research yourself…

For a typical Tam Brahm – who is looking for veg food and a very simple lifestyle, I found the prices ranged from Rs. 10,000 a month to about Rs. 15,000 a month. I am not imputing any cost to the deposit which is to be made. The deposit varied from Rs. 50k per couple to Rs. 15 lakhs per couple. These costs do not include medical expenses or any other type of special expenses. SIMPLE DAY TO DAY LIVING EXPENSES including laundry, food, electricity…THAT IS ALL.

Assuming it costs about Rs. 15,000 per head per month TODAY…it is likely to cost the following:

2011     Rs. 15,000 p.m.  x 12 = Rs. 180,000

2020    Rs. 30,000 p.m. x 12 = Rs. 360,000

2031     Rs. 60,000  x 12              Rs. 720,000

So how much money will you need to retire to a home like this?

Well just for the food and shelter you will need Rs. 360,000*30 years = Rs 1.8 crores if you retire in 2020. Apart from this you need to provide for your other expenses like telephone, travel, clothes, festivals and of course medical expenses.

Now Rs. 1.8 crores invested in a bank should give you about 5-6% p.a. returns POST TAX..assuming you do not do anything stupid like investing in a venture fund or an infra fund without any understanding of infra or venture! Straight simple income fund, bank fd, senior citizen fund, index fund (inflation protection)…kind of portfolio. Rs. 9 L will be the income in the first year..and you will REINVEST Rs. 640,000 – all this reinvested amount will help you tackle with inflation.

Hopefully I will do more posts on old age homes and its expenses….I NEED IT, not sure whether you do. Yes I do have a lovely daughter – but have a heart, why should she put up with a cranky old man with stupid ideas….OMG my heart goes out for her already!!!

By the way, did I hear you saying you have a spouse and you are retiring in 2031?

Well the amount is 720,000 * 2 *30 = 4,32,00,000… the amount…

Happy 2012!


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  1. Kartikeswar Bisoi

    Good morning rajesh.

    Could you please kindly let me know how much premium you paying in advance for your old age home requirement .


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  3. Sambamurthi jayaraman iyer

    many old age people go to retirement homes due to various personal reasons reasons.
    But there are lot of heartburns if one buys a flat or Villa, which they are not aware off while buying a flat in a reasonably good retirement homes
    As myself and myself lived for one year at Coimbatore in a reputed retirement home , I observed the following disadvantages of one desire to purchase a flat in a good retirement home
    1) In general, the cost of a new flat roughly costs rs 55 lacs to 60 lacs for a 1000 SFT area. which includes registration cost , if you are a first buyer
    Later on , due to any unforeseen circumstances if one desire to sell it off , some reputed retirement home promoters demand 2% of cost from both seller and buyer ( total 4%) as their commission even if u bring your own identified buyer !
    Apart from this , the new buyer has to bear approximately 11% of the cost as registration fees
    Hence , it is very difficult to get a buyer for a price u wanted to sell
    Another point to be noted that if you have availed bank loan to buy your flat , while selling it , when this bank interest is added in your sells price , it is much more difficult to get a new buyer at ur price!
    Now , having burdened with that property, if u desire to let it out for rent , if for some reason you are unable to stay there , you will hardly get a rent of around rs 10,000/- per month. The reason why we get such a low rent is that the management charges approximately rs 7/- per SFT per month as maintenance charges ( so , for a 1000sft flat , maintenance charges is rs 7000/- pm )
    Another point to be noted is that some of the reputed retirement homes charge this monthly maintenance charges even if the flat is not accupied for long periods
    This , if the flat owner has purchased a flat in a reputed retirement home , in my opinion, it is very very difficult to sell it if circumstances warrant it at a price you want
    And if you let it out for rent , it will yield very less rent , and
    if u keep it locked , apart from paying monthly EMI to bank , you have to pay monthly maintenance charges of rs 7000/-
    The next point is – food cost ?
    Some of the reputed retirement homes charge as high as rs 230 to 250/- per day per person
    Hence , for two persons ( husband and wife ) the monthly food bill will be rs 15,000/-
    Therefore , before going for outright purchase a flat or Villa in any retirement home , it is advisable to look into above mentioned points to avoid regret later on
    S. Murthy iyer

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