How to Financially Plan for Your Dependent Parents in India
As our parents age, many adult children in India face the responsibility of providing financial support while planning for elderly care. This comprehensive guide covers everything from understanding old age home costs to navigating EPFO pensions, Ayushman Bharat, and tax-saving strategies for senior citizens. Learn how to create a sustainable financial plan that protects both your parents’ well-being and your own financial future.
Understanding India’s Growing Elder Care Challenge
India is experiencing a demographic transformation. Around 19,500 Indians turn 60 every single day, and by 2050, nearly 21% of our population will be above 60 years old—translating to approximately 347 million senior citizens. This unprecedented ageing population is reshaping how Indian families plan, save, and care for their elderly parents.
The financial implications are substantial. For an urban middle-class couple in their early 70s living in a Tier-1 city, monthly elder care costs can range from ₹35,000 to ₹75,000, including live-in attendants (₹30,000-₹40,000), part-time nursing (₹10,000-₹15,000), therapy (₹5,000-₹8,000), and medicines (₹6,000-₹10,000). Old age homes charge a minimum of ₹5,000 per day in metros, translating to ₹1.5 lakhs monthly.
With India’s shift from joint to nuclear families, urban migration, and increasing life expectancy, planning for your parents’ financial security has become more critical than ever. This guide will help you navigate government schemes, healthcare costs, legal documentation, and create a comprehensive financial strategy for your aging parents.
Step 1: Have the Conversation Early
Breaking the Silence on Family Finances
In Indian culture, discussing money with parents can feel uncomfortable or disrespectful. However, early financial planning conversations are essential. The best time to start is before there’s a medical emergency or immediate financial crisis.
Key topics to address sensitively:
• Current income sources (pension, rent, interest, investments)
• Assets including property, fixed deposits, PPF, EPF, mutual funds, gold
• Outstanding loans or debts (home loan, personal loans, credit cards)
• Healthcare coverage and insurance policies
• Location of important documents (Will, property papers, insurance policies, PAN, Aadhaar)
• Their preferences for living arrangements and care as they age
Pro Tip: Frame the conversation around their independence and dignity. Explain that planning ahead allows them to maintain control over their decisions and reduces stress for everyone when emergencies arise.
Step 2: Assess Their Complete Financial Situation
Creating a Comprehensive Financial Inventory
Before creating a financial plan for your elderly parents, you need a complete picture of their finances. Work together to document the following:
Income Sources:
• EPF/EPS pension (current minimum ₹1,000, proposed increase to ₹7,500 in 2026)
• Government pension (for retired government employees)
• Indira Gandhi National Old Age Pension (₹200/month for 60-79 years, ₹500/month for 80+)
• Senior Citizen Savings Scheme (SCSS) interest
• Fixed deposit interest
• Rental income from property
• Atal Pension Yojana (APY) payouts (₹1,000-₹5,000/month)
Assets and Investments:
• Bank accounts (savings, current accounts)
• Fixed deposits, recurring deposits
• EPF/PPF balance
• National Savings Certificates (NSC), Post Office schemes
• Mutual funds, stocks, bonds
• Life insurance policies (LIC and others)
• Residential property, agricultural land, commercial property
• Gold (jewelry, coins, ETFs)
Liabilities:
• Outstanding home loan or LAP (Loan Against Property)
• Personal loans
• Credit card debt
• Medical bills and hospital dues
Important: Create a master spreadsheet listing all accounts with account numbers, bank branches, nominee details, and contact information. Store this securely (password-protected file or bank locker) and ensure trusted family members know how to access it.
Step 3: Understand Healthcare Costs and Government Schemes
Ayushman Bharat PM-JAY: Health Coverage for Senior Citizens
In a major expansion announced in October 2024, the Ayushman Bharat scheme now extends free treatment benefits of up to ₹5 lakh per year to approximately 6 crore senior citizens aged 70 years and above from 4.5 crore families, regardless of socio-economic background.
Key Benefits:
• Coverage up to ₹5 lakhs annually for hospitalization
• Covers secondary and tertiary care services
• Over 40 lakh senior citizens enrolled as of January 2025
• Cashless treatment at empanelled hospitals across India
How to Apply: Visit your nearest Common Service Centre (CSC) or Ayushman Bharat Health and Wellness Centre with Aadhaar card and proof of age. You can also apply online through the official PM-JAY portal.
Critical: Ayushman Bharat covers hospitalization but NOT outpatient department (OPD) visits, regular medicines, or long-term care at home. You’ll need additional health insurance or savings for these expenses.
Senior Citizen Health Insurance Options
While Ayushman Bharat provides basic coverage, comprehensive health insurance is essential for complete protection. Senior citizen health insurance plans typically cost ₹15,000-₹50,000 annually depending on coverage and age.
Popular Options:
• Star Health Senior Citizens Red Carpet Plan
• HDFC Ergo Health Suraksha Gold
• National Insurance Varistha Mediclaim Policy
• Oriental Insurance Hope
Tax Benefit: Premiums paid for parents’ health insurance qualify for tax deduction under Section 80D—up to ₹50,000 if they are senior citizens (60+) and ₹1,00,000 if they are super senior citizens (80+).
National Programme for Health Care of the Elderly (NPHCE)
NPHCE provides accessible and affordable healthcare to persons above 60 years at primary, secondary, and tertiary levels. The program covers all 713 health districts across India with dedicated geriatric services including OPD, 10-bedded geriatric wards, physiotherapy, and laboratory facilities. This is especially valuable for families in rural and semi-urban areas where private healthcare is expensive or unavailable.
Step 4: Plan for Long-Term Elder Care Costs
Understanding Old Age Home and Assisted Living Expenses
The demand for professional elderly care facilities is rising rapidly in India. The care services market, valued at USD 29.62 billion in 2023, is expected to grow at 13.76% annually through 2030.
Typical Costs in 2026:
• Old age homes (basic): ₹15,000-₹30,000 per month
• Assisted living facilities (metro cities): ₹40,000-₹1,50,000 per month
• Premium senior living (luxury): ₹1.5 lakh-₹5 lakh per month (₹5,000/day minimum)
• Live-in caregiver at home: ₹30,000-₹40,000 per month
• Part-time nursing care: ₹10,000-₹15,000 per month
• Physiotherapy/occupational therapy: ₹5,000-₹8,000 per month
Reality Check: Most health insurance policies focus on hospitalization, while daily care costs of ₹35,000-₹75,000 monthly are paid entirely out of pocket. For an elderly parent needing home-based support, annual costs can reach ₹4.4-₹9 lakhs, which is rarely reimbursed.
Government-Supported Old Age Homes
The Integrated Programme for Senior Citizens (IPSrC) funds 696 old age homes and mobile medical units nationwide. These are typically free or heavily subsidized for economically disadvantaged seniors.
How to Access: Contact your local Area Agency on Aging or the Department of Social Justice and Empowerment office for information on government-run facilities in your area.
Step 5: Understand Pension Schemes and Government Benefits
EPFO Pension Updates for 2026
The Employees’ Pension Scheme (EPS-95) provides monthly pension to private sector employees after retirement. Currently, the minimum pension is ₹1,000 per month, but there’s strong momentum for increasing this to ₹7,500 in 2026.
Current Status (February 2026):
• Minimum EPS pension: ₹1,000/month (some sources report increase to ₹2,500 for eligible retirees)
• Proposed increase to ₹7,500/month under active government consideration
• Over 6 crore pensioners could benefit from this revision
• Eligibility: 10 years of EPF contribution and age 58+
Important: EPFO is also considering increasing the salary ceiling for pension calculations from ₹15,000 to ₹25,000, which would benefit 6.5 crore employees and increase monthly pensions by nearly 66%.
Action Step: Ensure your parents’ EPFO records, bank details, and Aadhaar linkage are updated. Submit life certificates annually to avoid pension disruption. Check pension status at epfindia.gov.in using UAN.
Atal Pension Yojana (APY)
APY provides guaranteed pension of ₹1,000 to ₹5,000 per month to unorganized sector workers. As of 2025, it has 8.27 crore subscribers. If your parents worked in the informal sector, check if they enrolled in APY during their working years.
Coverage: Pension continues to spouse after subscriber’s death. After both deaths, the pension corpus is paid to the nominee.
State-Level Pension Schemes
Many states offer additional old age pension schemes beyond the central government’s Indira Gandhi National Old Age Pension Scheme:
• Delhi: ₹2,000-₹2,500 per month for senior citizens
• Rajasthan: ₹750-₹1,500 per month
• Maharashtra: ₹600 per month for eligible seniors
Check with your state’s Department of Social Welfare for specific schemes and eligibility criteria.
Step 6: Establish Legal Authority and Documentation
Power of Attorney: Essential for Financial Management
A Power of Attorney (POA) is a legal document that authorizes you to make financial and legal decisions on behalf of your parents. Without this, you cannot access their bank accounts, sell property, or manage investments—even in emergencies.
Types of POA in India:
• General Power of Attorney: Grants broad authority to manage all financial matters
• Special Power of Attorney: Limited to specific transactions (e.g., selling a particular property)
• Durable Power of Attorney: Remains valid even if the parent becomes mentally incapacitated (recommended)
Legal Requirements:
• Must be executed on stamp paper of appropriate value (varies by state)
• Signed by parent(s) in presence of two witnesses
• Notarized by a notary public
• For property transactions, must be registered with sub-registrar office
Critical Timeline: POA must be executed while your parents are of sound mind. If they develop dementia or cognitive impairment without having signed a POA, you’ll need to petition the court for guardianship—a lengthy and expensive process. Don’t delay this.
Will and Estate Planning
Under the Maintenance and Welfare of Parents and Senior Citizens Act 2007, adult children have a legal obligation to maintain their elderly parents. However, proper estate planning ensures assets pass smoothly to intended beneficiaries.
Essential Documents:
• Last Will and Testament: Specifies how assets should be distributed after death
• Nominee Designations: Update nominees on bank accounts, PPF, EPF, insurance policies, demat accounts
• Living Will: Specifies medical treatment wishes for end-of-life care (recently legalized in India)
Important: Hindu Succession Act governs inheritance for Hindus, Buddhists, Jains, and Sikhs. Muslims follow Shariat law. Christians and Parsis follow separate succession laws. A registered Will overrides default succession rules. Consult a lawyer specializing in estate planning.
Step 7: Create a Comprehensive Monthly Budget
Estimating Monthly Expenses for Elderly Parents
Create a detailed budget accounting for both current needs and anticipated future expenses. This helps identify gaps between income and expenses early.
Typical Monthly Expenses:
• Housing: Rent (₹10,000-₹50,000), property tax, maintenance, utilities (₹3,000-₹8,000)
• Healthcare: Insurance premiums, regular medicines (₹5,000-₹15,000), doctor visits, medical tests
• Food and groceries: ₹8,000-₹15,000
• Domestic help/caregiver: ₹5,000-₹40,000
• Transportation: ₹2,000-₹8,000
• Communication: Mobile, internet, DTH (₹1,500-₹3,000)
• Personal care and grooming: ₹2,000-₹5,000
• Emergency fund allocation: ₹5,000-₹10,000
Total Estimated Range: ₹35,000 to ₹1,50,000 per month depending on city tier, lifestyle, and health conditions. If monthly expenses exceed income, identify areas to reduce costs or explore ways to increase income through reverse mortgages or monetizing assets.
Managing Bills and Preventing Financial Fraud
Elder financial exploitation is rising in India. Set up systems to protect your parents:
• Enable auto-debit for recurring bills (electricity, mobile, insurance premiums)
• Set up SMS/email alerts for all bank transactions
• Monitor bank statements monthly for unusual transactions
• Register mobile numbers on TRAI’s Do Not Disturb (DND) registry
• Educate parents about common scams (fake tax notices, lottery wins, KYC update calls, parcel delivery frauds)
• Never share OTP, CVV, PIN, or full debit/credit card numbers with anyone
Helpline: National Helpline for Senior Citizens – 14567 (Elderline) provides support and connects seniors with relevant services.
Step 8: Maximize Tax Benefits and Investment Returns
Tax Deductions Available Under Section 80D
When financially supporting your parents, maximize tax benefits available under various sections of the Income Tax Act:
Section 80D – Health Insurance:
• ₹50,000 deduction for health insurance premium paid for parents (60+ years)
• ₹1,00,000 deduction if parents are super senior citizens (80+ years)
• Additional ₹5,000 for preventive health checkups
Section 80DDB – Medical Treatment:
• ₹1,00,000 deduction for medical treatment of specified diseases (senior citizens)
• Covers 17 specified ailments including cancer, neurological diseases, chronic renal failure, etc.
Pro Tip: If you pay for your parents’ health insurance AND they pay for their own as well, BOTH of you can claim deductions under Section 80D. Ensure bills and payments are in your name for claiming deductions.
Best Investment Options for Senior Citizens
Help your parents optimize their investments for stable income and capital preservation:
Senior Citizen Savings Scheme (SCSS):
• Government-backed scheme with quarterly interest payouts
• Current interest rate: 8.2% p.a. (Q4 FY 2025-26)
• Maximum investment: ₹30 lakhs (increased from ₹15 lakhs in 2023)
• Tenure: 5 years (extendable by 3 years)
• Tax deduction under Section 80C (up to ₹1.5 lakhs)
Post Office Monthly Income Scheme (POMIS):
• Interest rate: 7.4% p.a. (current)
• Monthly income payout
• Maximum investment: ₹9 lakhs (single), ₹15 lakhs (joint)
Bank Fixed Deposits (Senior Citizen):
• Additional 0.25%-0.50% interest rate for senior citizens
• Rates typically 6.5%-7.5% p.a. depending on tenure and bank
• Flexible tenures and premature withdrawal option
Tax Note: Senior citizens can earn up to ₹50,000 as interest income without TDS deduction by submitting Form 15H. File this annually with banks to avoid TDS.
Step 9: Explore Reverse Mortgage and Asset Monetization
Reverse Mortgage: Unlocking Home Equity
If your parents own a house but have limited income, a reverse mortgage allows them to receive regular monthly payments while continuing to live in the property.
How It Works:
• Available to homeowners aged 60 years and above
• Loan provided against property value (typically 60-80% of market value)
• Receive monthly payouts (typically ₹10,000-₹15,000 for ₹1 crore property)
• No repayment during lifetime; loan settled after death from property sale
• Heirs can repay loan and retain property if desired
Current Challenges:
• Low loan-to-value ratios (60-70% vs 80-90% in other countries)
• Complex documentation and high processing fees
• Limited awareness and few banks offering the product
Tax Benefit: Reverse mortgage payouts are tax-free under the Income Tax Act. Budget 2026 may introduce reforms to make reverse mortgages more accessible with higher LTV ratios and simplified processes.
Rental Income from Property
If your parents own additional property, renting it out can provide steady monthly income. A 2BHK apartment in tier-2 cities generates ₹8,000-₹15,000/month, while metros can yield ₹20,000-₹50,000+. Consider professional property management services if your parents cannot manage tenants themselves.
Step 10: Know When to Seek Professional Help
Financial Planners and Elder Care Specialists
Managing elderly parents’ finances alongside your own responsibilities can be overwhelming. Professional guidance ensures optimal strategies and peace of mind.
When to Consult Professionals:
• Certified Financial Planner (CFP): For comprehensive retirement planning, investment strategy, and tax optimization
• Elder Law Attorney: For Will drafting, POA, property transfers, and succession planning
• Chartered Accountant: For tax planning, ITR filing, and maximizing deductions
• Geriatric Care Manager: Coordinates healthcare services and daily living support
Finding Trustworthy Advisors: Verify credentials through SEBI (for investment advisors), Bar Council of India (for lawyers), and ICAI (for CAs). Seek referrals from trusted friends or family members who’ve used similar services. Interview multiple professionals before deciding.
Government Support Resources
• SAGE Portal: Senior Able and Growing Elderly portal connects seniors with trusted elderly care products and services
• SACRED Portal: Senior Care Ageing Growth Engine for Reimagining Elderly Duties promotes re-employment opportunities for 60+ citizens
• Elderline (14567): National helpline providing emotional support and connecting seniors with services
Contact your local Area Agency on Aging for personalized guidance on available programs and assistance with applications. Many beneficial schemes go underutilized simply because families don’t know they exist.
Special Considerations for Indian Families
NRIs Supporting Parents in India
If you’re an NRI with parents living in India, additional planning is necessary:
• Set up NRE/NRO accounts for remittances
• Arrange for local guardians or trusted family members to assist in emergencies
• Consider professional eldercare services like Samarth, Nightingales, or Portea for regular monitoring
• Install video calling systems and medical alert devices
• Ensure all financial accounts have auto-pay and online access
Tax Note: Money sent to parents for their maintenance is NOT taxable in their hands. However, if you transfer assets that generate income (property, FDs), that income will be taxable for them.
Dealing with Cognitive Decline and Dementia
Cognitive impairment affects millions of Indian seniors. Warning signs include forgetting to pay bills, difficulty with basic calculations, confusion about finances, and increased susceptibility to scams.
Action Steps: Gradually increase your involvement in their finances. Ensure legal documents (POA, Will) are executed BEFORE cognitive decline becomes severe. Consider professional care services specializing in dementia care (available through Epoch Elder Care, Athulya Living, and similar facilities).
Balancing Your Own Financial Goals
Critical Principle: Never jeopardize your own retirement savings to support parents. While it’s our cultural responsibility to care for elderly parents, depleting your retirement corpus creates a vicious cycle where your children will face the same burden. Work with a financial planner to balance both goals through systematic planning rather than reactive financial support.
Creating Your Action Plan: Next Steps
Financial planning for dependent parents requires systematic effort, cultural sensitivity, and proactive management. By following the steps outlined in this guide, you can create a sustainable plan that honors your parents while protecting your own financial future.
Your Immediate Action Checklist:
1. Initiate the financial conversation with your parents this week
2. Create a comprehensive list of all income sources, assets, and liabilities
3. Apply for Ayushman Bharat PM-JAY if parents are 70+ years old
4. Verify EPFO pension status and update bank details at epfindia.gov.in
5. Draft and execute Power of Attorney while parents are mentally competent
6. Review and update Will, ensuring all nominee designations are current
7. Set up auto-pay for bills and transaction alerts on all bank accounts
8. Purchase or review health insurance, maximizing Section 80D tax benefits
9. Explore SCSS, POMIS, or senior citizen FDs for stable income generation
10. Schedule quarterly financial review meetings to monitor the plan
The demographic reality is clear: India is aging rapidly. Around 19,500 Indians turn 60 every day. By taking proactive steps today, you ensure your parents can age with financial security, dignity, and independence—while protecting your own financial future.
Remember: This is not just financial planning—it’s honoring the people who raised you and ensuring they live their golden years with comfort and respect. Start today.
About the Author
Hi, I’m Gunjan Kataria, Founder at Financial Friend in Jaipur.
As a Certified Financial Planner (CFP) and Chartered Trust and Estate Planner (CTEP), I specialize in customized strategies that align with clients’ unique risk profiles and financial goals, enabling them to make informed decisions for wealth growth and management.
I help working professionals, women, parents, retirees, and first-time investors make smart money decisions without the jargon.
With years of experience guiding people through budgeting, saving, investing, and retirement planning, I’ve seen one truth:
— Most people don’t need complicated strategies, they need a clear, personalised plan they can actually follow.
What I do:
1. Help you build wealth while enjoying your present life
2. Create customised money plans based on your goals & lifestyle
3. Break down complex financial concepts into easy, actionable steps
4. Provide guidance that’s trustworthy, friendly, and free from product-pushing
I believe personal finance isn’t just about numbers, it’s about freedom, security, and peace of mind.
Whether you’re:
🔹 Starting your career and want to avoid costly money mistakes
🔹 A professional in IT or other fast-paced industries seeking clarity in your finances
🔹 A High Net Worth Individual (HNI), CEO, or business owner wanting a trusted partner to optimize wealth and secure your legacy
🔹Preparing for retirement and aiming for peace of mind
🔹 Or simply looking to manage your money better
I’m here to be your trusted guide and partner in the journey.
Let’s connect and talk about how you can take control of your finances, grow your wealth, and design a life you truly love.
E-mail: gunjan@financialfriend.in
Connect with Us on Social Media for Latest Finance Updates
Linkedin: https://www.linkedin.com/in/gunjan-kataria-financecoach/
Facebook: https://www.facebook.com/financialfriend.in/
Instagram: https://www.instagram.com/financialfriend.in/
Youtube: https://www.youtube.com/channel/UC9lV6UXOuBdvK7lLNsbQGaA