r2i forum

I have saved $550K so far and paid off my house in US which is worth $250K.
I am planning to sell this house and retire now in India and spend time to
educate my two little kids. Based on current interest rate in India it looks
like it is possible.

$250K cash + 300K in 401k and IRA.

1) How old are you (meaning will you have to pay penalty on 401k/IRA withdrawl)?
2) What will be the tax rate at which you will withdraw money from your 401k/IRA?
3) Are you a USC/GC/IC? Because if you are not a USC (or GC), then after becoming a Non-Resident-Alien filing US taxes, your 401k/IRA withdrawls will be taxed at 30% + 10% penalty. Even with a GC, you will be able to stretch only so far without maintaining your GC status.

Unless you are 50+, I don't think you can cease gainful employment, if you want to maintain upper middle class lifestyle.

vsri;404908I have saved $550K so far and paid off my house in US which is worth $250K.
I am planning to sell this house and retire now in India and spend time to
educate my two little kids. Based on current interest rate in India it looks
like it is possible.

$250K cash + 300K in 401k and IRA.

What kind of investments do you have in india? Do you own a home in india and if you do, is it fully paid off? Honestly, i do not think this amount is enough to retire. The interest income from the savings is not going to be enough to feed your family and at the same time beat the inflation. The inflation in india is 8.62% and the interest is 10% so it's probably just enough to beat the inflation if you let it accumulate as savings. You either have to work or find a way to invest this money wisely so that it gives you much better returns probably close to 20% or something.

With your house paid off and a considerable savings in your name... Why not just stay in the US as opposed to coming back to India? This may not be the answer you are looking for....

$550,000 has more value than its rupee equivalent in India. Also, IMO, schools are excellent in India, i would not say the same for colleges. Again, you only can slot them into either engineering or some kind of medical field...

Given the scenario, i would just stay put and not move. Unless, your job is question, given the market conditions in the US at the current juncture...

Just my 2 cents...

Good Luck

vsri;404908I have saved $550K so far and paid off my house in US which is worth $250K.
I am planning to sell this house and retire now in India and spend time to
educate my two little kids. Based on current interest rate in India it looks
like it is possible.

$250K cash + 300K in 401k and IRA.

After R2I if you continue to work or if you have some kind of steady income for rest of your life than this wealth you already have is a big cusion for your future life. On contrary if are planning on living on this wealth for the rest of your life than it depends on how old are you. Older you are brighter the chances of living on this wealth and younger you are gloomier your chances of living happily with the wealth you have because like most of them said that inflation in India is very high and it will not be too long before it will gobble all your wealth.

Assuming you are able ot bring all 550K back home........( i doubt it..since 401K rule medate panelty and taxes )
You will have just under 2.5 cr to sustain in India.
Assuming you
1. have no rent /mortgage in India and
2. will never dip in this corpus for kid's education / wedding, future health-related expence and other emergencies.

You will have about 2.5% of it or 6lac ( or 50K/ month ) to spend ( that's after taxes and considering partial reinvestment of returns to mitigate inflation) per year.

Its a very close call if you ask me..there are a lot of ifs and buts in this plan.
And the best case of 50 K / month may not be enough depending where you stay and what kind of life-style your relatives and friends will influence you to live.

Biggest expense is house so if he has one that is comfortable (1500 sq feet area with 3 Bedroom) . we can easily make 10% with fixed deposits for 1 crore, another 50 lacs in accumulating fixed deposits, 50 lacs in bonds/indian stock and keep 50 lacs USD 401k, investment (index funds ) so getting 10 lacs per year should be sufficient for running a decent upper middle class life .

You have to split the 1 crore investment carefully between you and spouse and figure out all tax saving strategies to get 10 lacs per annum.

My defn of upper middle class is
Have a 3 year old mid size car and self drive, upgrade every 5 years, send kid to decent private school close to house (not intl), invest in health insurance for family, take one indian annual vacation, one budget intl vacations every couple of years based on teturn from risky investments, eat out twice a month in good rest 1.5k per trip , twice in ok restaurants 500 Rs per trip, keeping good health and not indulge in unneccesary shopping. Well this is how we lived when i grew up (except for intl trip)with 10k-20k per month in early 90sits doable with 60-100k per month today

vsri;404908Saved $550K .... Is it enough to retire in India...

It is the state of mind that determines if a certain absolute number is enough or not. Relatively there are few for whom (550k) 2CR is rounding error and there are many many others (the rest 90% of the country) who will not live to see that kind of number!

Tsozum;405486It is the state of mind that determines if a certain absolute number is enough or not. Relatively there are few for whom (550k) 2CR is rounding error and there are many many others (the rest 90% of the country) who will not live to see that kind of number!

It is definitely a kind of money that would give a sense of security for most working class people. You still would have to work to have steady stream of cash flow for the daily expenses but you don't really have to worry about downturn/upturn/job loss or you don't worry about upsetting your boss at work or can switch jobs at will.

vsri;404908I have saved $550K so far and paid off my house in US which is worth $250K.
I am planning to sell this house and retire now in India and spend time to
educate my two little kids. Based on current interest rate in India it looks
like it is possible.

$250K cash + 300K in 401k and IRA.

A lot depends on your lifestyle. For someone 550K is probably way more than what he/she needs but for someone else it may be way smaller than what they'd need to support their lifestyle.

Money is just a part of the deal in successful R2I. Need to return to India, lifestyle, attitude, adaptability and other factors are all required to succeed in this journey. As others said, 550K is a good amount of money and this combined with other things you can live in India happily.