When planning your retirement, do not look only at your monthly expenses. Also account for:
- Healthcare costs: Medical treatments, medicines, consultations, and other healthcare needs.
- Home expenses: Repairs, maintenance, renovations, or relocation costs.
- Asset replacement: Replacing your car, appliances, or other major assets.
- Family needs: Financial support for children, parents, or other family members.
- Lifestyle expenses: Travel, hobbies, dining, and other activities you may spend more on after retirement.
- Changing costs: Expenses that may increase over time or arise only once every few years.
- Employer benefits: With the Labour Codes in effect from November 21, 2025, review your applicable gratuity and retirement benefits as part of your 2026 retirement plan.
Which healthcare costs should you include in your Retirement Plan?
Healthcare is one of the expenses that can become harder to predict with age. Having Health Insurance does not necessarily mean every healthcare related expense will be covered. Your Retirement Plan can therefore account for:
- Regular doctor consultations and medicines
- Dental and vision-related expenses
- Physiotherapy or rehabilitation
- Medical equipment or mobility aids
- Health-related home modifications
- Expenses that fall outside your health insurance coverage
- Support or caregiving costs if your healthcare needs increase
The point is not to predict the exact medical bill you may have decades from now. Instead, maintain a separate healthcare buffer alongside your regular retirement budget.
What home-related expenses can surprise you after retirement?
Owning your home does not mean housing costs disappear after retirement. Over the years, you may need to pay for plumbing, electrical work, painting, appliance replacement, structural repairs, or modifications that make the home easier to use as you get older.
If you expect to remain in the same house throughout retirement, create a separate home-maintenance fund rather than assuming these expenses will come from your monthly retirement income. If you plan to move after retirement, factor in relocation costs, brokerage, interiors, deposits, or other one-time expenses as well.
How can family expenses affect your retirement corpus?
Retirement planning is not always an individual exercise. You may continue to support children, ageing parents, or other family members even after you stop working. These expenses could include:
- Helping an adult child during a career transition
- Supporting a child’s higher education or wedding
- Contributing towards parents’ healthcare
- Gifts or financial support for grandchildren
- Family travel or major family occasions
The challenge is that these expenses are difficult to predict. Rather than assuming they will never occur, decide how much of your retirement resources you are comfortable allocating towards family needs while protecting the money required for your own long-term expenses.
What lifestyle expenses do people often underestimate in retirement?
Retirement gives you something your working years may not: more time. That can change how you spend. You may travel more, take up hobbies, eat out more often, spend more time with friends or finally pursue your passions you postponed while working. These are not unnecessary expenses.
They are part of the lifestyle you may want your retirement income to support. So, do not build your retirement budget around your current lifestyle alone. Ask yourself:
- What do I want to do more of after retirement?
- Will I travel more?
- Do I plan to pursue expensive hobbies?
- Will I spend more on experiences or family?
- Am I likely to move to another city?
Your retirement corpus should reflect the life you actually want to live, not just the bills you currently pay.
What about replacing cars, appliances, and other assets?
Some expenses are predictable but easy to forget because they happen only once every few years, like:
- Car replacement: Your car may need to be replaced after a few years.
- Home appliances: Refrigerators, AC, or washing machines may need replacement or major repairs.
- Technology upgrades: Laptops, phones, and other devices may need upgrading over time.
- Home furnishings: Interiors, furniture, mattresses, and other household essentials may require repairs, maintenance, or replacement over time.
These costs can become significant when you no longer have a regular salary. Create a separate replacement bucket for large assets instead of treating them as emergencies every time they occur. Estimate when they may need replacement and build those costs into your longer-term retirement plan.
Can taxes become a retirement expense too?
Retirement income may come from multiple sources, and the tax treatment can differ depending on the nature of the income and the prevailing tax rules. This means your retirement calculation should not simply ask, “How much income do I need?” It should also ask, “How much do I need after accounting for applicable taxes?”
Review the tax treatment of your expected retirement income periodically because tax laws can change. For current tax planning, consult a qualified tax advisor.
How should gratuity and other employer benefits fit into your retirement plan?
Employer benefits such as gratuity, provident fund balances, and other retirement benefits can form part of your overall retirement resources. The Labour Ministry has clarified that gratuity provisions under the Code on Social Security, 2020 apply from November 21, 2025. The amount and eligibility will depend on the applicable employment circumstances and rules.
So, when estimating your retirement corpus, list your expected employer benefits separately rather than assuming they will automatically cover your retirement needs. You can also use a gratuity calculator to get an estimate based on your inputs.
How can you check whether your retirement corpus accounts for these hidden expenses?
Once you have listed your regular and irregular expenses, use them to stress-test your retirement plan. Start with:
- Regular expenses: Food, utilities, housing, and transportation
- Healthcare: Medical expenses and a separate contingency buffer
- Family: Any support you expect to provide
- Lifestyle: Travel, hobbies, and leisure
- Large expenses: home repairs, car, or appliance replacement
- Taxes: applicable taxes on your expected retirement income
- One-time costs: relocation, home modifications, or other major expenses
You can use the ABSLI Retirement Planning calculator to estimate your retirement requirement using factors such as current expenses, retirement age, life expectancy, inflation, and expected post-retirement income.
How can a Pension Plan help prepare for retirement income?
Once you have estimated your retirement needs, you can look at how different sources may contribute towards that requirement. A Pension Plan can help you build a dedicated retirement corpus during your working years, depending on the plan chosen. For example, the ABSLI Nishchit Pension Plan is a Non-Linked, Non-Participating Pension Plan designed to provide a corpus at vesting along with life cover, subject to the applicable terms.
The important part is to look at the plan as one component of your overall retirement strategy, alongside your existing retirement savings and other expected income sources.
How can an annuity help manage recurring retirement expenses?
A retirement corpus gives you a pool of money. An annuity can help convert part of that retirement capital into a regular income stream, depending on the option chosen. For someone who wants a predictable income to meet recurring expenses, the ABSLI Guaranteed Annuity Plus offers multiple annuity options and payout frequencies. It is a Non-Linked, Non-Participating Annuity Plan (UIN 109N132V18).
This can allow you to structure retirement resources differently. Use regular income for recurring expenses while keeping other resources available for irregular costs such as healthcare, travel, or major repairs. Guaranteed benefits are subject to applicable terms and conditions, including payment of all due premiums.
September 21, 2026
5 mins read
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