r2i forum

Desi;56399Luv2fly,

Your emergency money 35k in savings account should also be considered for Vanguard if the interest rate is higher than your savings account.

I have since then moved 30 K of that to a private business group offering an annual guaranteed return of 10%.
Would it make sense to retain the 5K ion ING for emergency expenses?

What yearly post tax expenses do you need in India ? this should include the expenses for the child (you had mentioned 1 lac for school for the child)?

You had mentioned at one point 6 lacs rupees per year beginning with R2I and at another point, you mentioned 7 lacs per year. Is the difference because in one case you are semi retired?

Beginning with 2009, how much income per year do you need from your assets including chidren's current education expenses. Tell me post tax money only and not pre tax. Also do not figure in any inflation, assume today's dollars only. I will compute inflation.[/quote]

I was inconsistent with the amount that I needed on an yearly basis. I had not included housing and school expenses. After taking that into account,
I would actually need Rs. 9 lacs per year in post tax expenses.

I eagerly look forward to your feedback.


Thanks

luv2fly;57421Thanks a bunch for the response Desi.
Please find below my answers to your questions:



I was inconsistent with the amount that I needed on an yearly basis. I had not included housing and school expenses. After taking that into account,
I would actually need Rs. 9 lacs per year in post tax expenses.

I eagerly look forward to your feedback.


Thanks[/quote]

OK, it seems that 9 lacs per year is the net amount of money you will need every year to live (inflation adjusted of course). This 9 lacs includes primary and secondary school expenses for children and housing expenses.

What do you mean by housing expenses? The house you will be living in will be an owned house? Correct? Based on the real estate owned, it seems that you will be living in a fully owned house.

The property tax, utilities, maintenance, etc are all living expenses - Am I missing something that is additional or different?

Desi;57434OK, it seems that 9 lacs per year is the net amount of money you will need every year to live (inflation adjusted of course). This 9 lacs includes primary and secondary school expenses for children and housing expenses.

What do you mean by housing expenses? The house you will be living in will be an owned house? Correct? Based on the real estate owned, it seems that you will be living in a fully owned house.

The property tax, utilities, maintenance, etc are all living expenses - Am I missing something that is additional or different?

Desi;58751Luv2fly,

ASSETS:

We will ignore the value of cars and jewellry. These are not for investment. They are part of your total worth but not investment asets.

So taxable account value is $275K


Regarding 401K and IRAs, here ealry withdrawal would mean a penalty of 10% or 16K
Also if the withdrawal is broken up into say 3 chunks. That would be about 54k per year of withdrawal. With standard deduction and personal exemptions rounded up will be about 24K, so about 30K would be taxable (at this point we will not consider unearned income as I am trying to approximate taxes on this IRA distribution). Your taxes on 30K will be under 4K. So over 3 years that is taxes of 12K plus penalty of 16K. A total thus of 28K of liability for IRS.

Net of Penalty and taxes, your 401K and IRA are worth about $133K.

Current India Assets(Rs. 2.52 crore):
(in Rs @ curren mkt value)
1. Stocks : None
2. Bonds : None
3. Cash : None
4. Real estate :
- Home 1 (60L) : Parents stay here
- Home 2 (10L) : Spouses Parents stay here
- Plot1 (1.5 crore) : Future home in 2/3 ? Plan to sell 1/3 of the land
- Plot2 (12L) : Investment
- Plot3(10L) : Investment

In your computation of real estate assets, you have taken into account the values of your parents and in-laws homes. I am assuming that the reason you have figured those in is because you stand to inherit those. Also since in your computation of 9 lac need per year for living and housing expenses, you have assumed renting and hence all of these real estate assets can be considered investment assets.

Real Estate Investment assets 2.52 crores

5. Other : FD 1L

TOTAL Investment assets

1. US assets = 275K + 133K = $408K = Rs. 1.63 crores
2. Indian real estate and cash assets = 2.53 crores

Total investable assets = 4.16 crores

Is the above correct? Is the $35K emergency fund part of 4.16 crores or is it separate and needs to be added?
$35K emergency fund is part of the 4.16 crores

Besides above assets, how much more will you accumulate (forget the growth on these for the moment) from savings till you R2I?
I will probably accummulate another $40K

We first need to get a good handle on current assets and assets when you R2I. So let us start with answering some questions, I have asked.

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Near term needs: 30 lacs R2I, settling, furniture, appliances, Cars etc.

Upon R2I, will dispose off cars in USA and furniture - will generate $15K ?

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