Your retirement needs are closely linked to the lifestyle you expect to maintain, and where you live can influence that cost. Someone planning to retire in Mumbai, Bengaluru, or Delhi may have very different housing, healthcare, transportation, and lifestyle expenses from someone planning to retire in a smaller city or town. But lower living costs in a small town do not automatically mean you need a smaller retirement corpus.
You may have different priorities, such as supporting family members, travelling between cities, maintaining a second home, or accessing specialised healthcare elsewhere. Your retirement plan should therefore start with the life you want to live after retirement, rather than using a standard corpus figure.
What makes retirement planning different in a metro city?
Retiring in a metro city can mean higher ongoing costs for housing, healthcare, transport, and lifestyle, which can significantly shape the retirement corpus you need. ABSLI अ-Nishchit 2.0, a study on the uncertainty people experiences across India, states that sudden family expenses, and health or medical emergencies are among the top reasons for personal anxiety. In a metro city, these uncertainties can have a bigger financial impact because the underlying costs may already be higher.
A medical emergency, continued rent, or changing family needs can therefore push retirement expenses beyond what you initially estimated. So, metro retirement planning should account for both higher regular costs and a buffer for expenses you cannot predict today.
Does retiring in a small town mean you need less money?
Not necessarily. A small town may have lower housing and everyday expenses, but retirement planning cannot be based on location alone. Healthcare is one example. If specialised treatment requires travelling to a larger city, you may need to account for travel, accommodation, and treatment-related expenses. You may also want to spend more on travel, hobbies, family visits, or maintaining a second property after retirement.
Housing can be particularly important. If you are still paying a home loan close to retirement, the EMI can significantly affect the amount of income you need after you stop working. Someone who owns their home outright may have different retirement requirements even while living in the same city. The better approach is to estimate your expenses based on your expected retirement lifestyle, then adjust the calculation for inflation and potential changes in your needs.
How should you compare your retirement expenses across locations?
Instead of asking whether a metro or small town is affordable, create two retirement budgets if you are considering moving after retirement. The purpose is to identify which expenses will change if you move.
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Expense
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Metro City
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Small Town
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Housing
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Rent/EMI, maintenance, society charges
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Lower housing cost may be possible, depending on location
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Healthcare
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Specialist care may be more accessible
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May involve travel for specialised treatment
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Transport
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Public transport, cabs or personal vehicle
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Personal vehicle may be more important
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Lifestyle
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Dining, entertainment, memberships
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Spending pattern may be different
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Family support
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Children's expenses or housing support
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Family visits or property maintenance
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Travel
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Local and international travel
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Travel to larger cities may need to be considered
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What if you plan to retire in one city but currently live in another?
Build your retirement plan around your expected retirement location, not just your current expenses. Someone currently working in Mumbai may eventually want to retire in Pune, Bhubaneswar, Jaipur, or a smaller hometown. Their current monthly expenses may not be a useful estimate of what they will need after retirement. Before making the move, consider:
- Housing costs
- Healthcare access
- Cost of living
- Transportation
- Family proximity
- Social connections
- Travel requirements
- Property ownership and maintenance
If you are unsure where you will retire, create a base retirement budget, and test it against two or three possible locations.
How should you plan your retirement income if your expenses may change after moving?
Moving after retirement can change your monthly budget. Rent, healthcare, travel, household costs, and even daily spending may look very different in your new location. So, plan your retirement income around both essential expenses and expenses that may vary. A simple way to approach it:
- Map your essential costs: Housing, food, healthcare, and utilities.
- Keep a flexible bucket: Set aside money for travel, hobbies, and unexpected expenses.
- Create a regular income stream: Consider an annuity for a part of your retirement corpus if you want predictable income.
- Review after the move: Your actual expenses may differ from your estimate, so revisit your retirement plan once you settle in.
- Keep some liquidity: Do not put your entire retirement corpus towards generating regular income.
What should you do if you are unsure where you will retire?
You do not have to decide on your retirement location immediately. Build a retirement plan that can accommodate more than one possibility.
Scenario 1: Continue living in the metro: Account for housing, healthcare, transportation, and lifestyle costs at your expected retirement age.
Scenario 2: Move to a smaller city: Rework housing and everyday expenses, but retain provisions for healthcare travel, family visits, and other costs that may increase.
Scenario 3: Split time between locations: If you expect to spend part of the year in your hometown and part in a metro, account for two sets of housing, travel and maintenance expenses.
This approach gives you more flexibility than building your entire retirement plan around one assumed location.
Where does NPS fit into retirement planning across cities?
Your location does not determine whether NPS is relevant to your retirement plan. NPS is available voluntarily to eligible Indian citizens and OCIs aged 18 to 85, subject to applicable requirements. It includes Tier I and Tier II Accounts. PFRDA states that there is no upper limit on contributions. This can be useful when your retirement location and lifestyle may change over time.
NPS is one component of a broader retirement strategy, so consider its investment choices, withdrawal rules and tax treatment before deciding how it fits your plan.
Source: PFRDA: NPS for All Citizen Model
How can a Pension Plan support your retirement income?
A Pension Plan can help you build a retirement corpus during your working years while also providing life cover, depending on the plan. It can be considered when you want to work towards a dedicated retirement fund and create a source of income for your later years. The key is to choose the plan based on your retirement age, contribution capacity, expected retirement needs and the income structure you want after retirement.
The ABSLI Nishchit Pension Plan is an individual plan designed to help build a retirement corpus, along with life cover.
How can ABSLI help you plan for retirement based on your lifestyle needs?
Retirement planning starts with understanding how much you may need and what kind of income you may want after you stop working. Start with the ABSLI Retirement Planning calculator to get an illustrative estimate. Once you have a clearer picture, you can explore retirement income options based on your needs.
For someone planning a location change after retirement, a regular income stream can help cover recurring expenses while allowing other retirement resources to be allocated towards variable costs. That’s where an Annuity Plan can help create a predictable income stream while you keep other retirement savings available for expenses such as travel, healthcare or changing family needs.
ABSLI Guaranteed Annuity Plus is a Life Insurance Plan that offers multiple ways to structure lifelong annuity income, including single or joint life options, level or increasing payouts, and monthly, quarterly, half-yearly, or yearly payment frequencies.
September 21, 2026
5 mins read
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