r2i forum

1. Return to India (R2I) or Live In America (LIA): R2I

2. Your current age: 35

3. Marital Status: Married

4. Number of dependents and ages: Spouse (33) Son(4) Daughter(2)

5.

(a) Current citizenship and/or Immigration status: GC

(b) If not a USC currently, do you have the option to take up US citizenship prior to R2I?

(c) If you have the option to take USC, do you intend to do so prior to R2I? YES

6.

(a) If you intend to R2I, when do you intend to R2I? 2012

(b) Immediately upon R2I, do you plan to retire (cease gainful employment), semi-retire, or continue to work for some time?
continue to work

(c) When do you plan to cease gainful employment (Intended Retirement Age)? 52-55

(d) If you plan to work after R2I, what do you estimate your annual after-tax savings to be? 9 lacs

(e) If you plan to semi-retire after R2I, will your annual earnings from employment take care of your annual expenses during semi-retirement? If not, what do you expect the deficit to be per year?

7. Is spouse also working? No

8. RNOR eligibility of you and your spouse (use the calculator in doc section) or how long you have been out of India ? 2 1/2 yrs eligibility

9.

(a) Current annual after-tax savings including Roth IRA (excluding 401(k) and regular IRA contributions): 36-40K

(b) Current annual savings into tax deferred accounts i.e. 401(k) and regular IRA: 20K (Expecting to maximize 401k, IRA Contributions from 2007)

(c) Current annual expenses (excluding tax): 40K

(d) What is your current marginal (not average) federal tax rate, based on your filing status? 27%

(e) What is your current marginal (not average) state tax rate, based on your filing status? 8%

10. House owner? No

11. What percentage of your total portfolio loss in a year will make you lose sleep? 10%? 20%? 30%? Or 40%? 25-30%

12. Do you have any loans? CC? Car loans? House loans? What is the current interest rate? No

13. Do you or your spouse?s participate in retirement plans: 401K, IRA, Roth-IRA? If so, how much do you and your employers contribute every year to these accounts? Self Contribution for MAX 15.5K from this year

14.

(b) What are your medium term (2-5 years) financial goals? - Around 6 years after R2I

1. Build a house in BLR, already have a plot, expected total cost 35L including furnishings.
2. R2I Settling expenses (15 lacs)

(c) What are your long term (>5 years) financial goals?


1) Son's education & marriage expenses
2) Daughter's education & marriage expenses
3) Capital growth/accumulation
4) Retirement



15. Need to save money for your kids future education? If so, please answer the following questions:

(a) Do you have a 529 plan? No

(b) Do you want to fund your kids' Indian or US education or both? If so, please provide a detailed description of the kind of education that you want to fund.

Have not decided if Higher education will be done in India or US, but i want to prepare for US Educational Costs.

Primary/High School in India @ 1Lakh/year/child
- Undergraduate education (a). India @ 5Lakh/year/child or (b). US @40k/yr/child
- PG education in USA @ 40k/year/child

16. After you retire (cease gainful employment), what do you estimate your annual living expense figure to be (in current dollars or rupees, based on the life style you want)? Does this figure include housing cost?
Rs. 6L assuming owning home.


17. If you are R2I, what percentage of your portfolio do you want to leave in US? And where? Stocks? Bonds? Cash?

- Not sure, perhaps 40/60(US/India). Need a lot of help on this.


18. Do you have any insurance? Life, disability, long-term care? Total value of your policy?

Combination of Employer sponsored/self - 500k for self and spouse.


19. Do you have an emergency fund? How it is invested?

Savings account - 10K


Current US Assets* (Please provide a separate breakup of tax deferred and after-tax accounts):


RETIREMENT(before tax ? 40k)

1. Stocks:
401k: (total 40K)

Here I have thru my past company and current company that i work.

1) Thru Fidelity - Former company - $22,500 - Fully vested

Stock Investments
LARGE CAP
DREYFUS S&P 500 INDX 20%
FA EQUITY INCOME A 15%
FA NEW INSIGHTS A 15%
SMALL CAP
OPPHMR MAINST SMCP A 15%

Bond Investments
STABLE VALUE
FA STABLE VALUE 10%
INCOME
CALVERT INCOME A 25%



2) My current company - $18,375 - Expect to contribute to maximum IRS limits till R2I( 6 years)


AIM Intermediate Govt - A AGOVX 5%
American Growth Fund A AGTHX 15%
Columbia Acorn - A LACAX 10 %
Columbia Mid Cap Value - A CMUAX 5 %
Davis New York Venture - A NYVTX 15 %
Eaton Vance Large Cap Value - A EHSTX 15%
Franklin Rising Div A FRDPX 5 %
MET GIC 25053 METGIC2 5%
Royce Value Plus - Consultant RVPCX 5%
Seligman Communication & Information - A SLMCX 5%
Thornburg International Value - R3 TGVRX 15%


I am looking to start ROTH IRA for me and my wife. Appreciate if you can recommend the funds for same.




NON-RETIREMENT(after tax - 120k)

120K in ING savings (5.3% interest) - want to use these funds for investing based on recommendations from the forum.



Current India Assets
(in Rs @ curren mkt value)


1. Cash : 6Lakhs
2. Real estate :

- Plot1(55L) : Future home
- Plot2(46L) : Long term investment





I am a new member, but I had been actively reading the posts in this forum for past few months and it has been immensely helpful for me and i am grateful for RRK for starting this forum and others for great contributions.

I am beginner in stocks, Bonds and looks like I am the only one in the forum who has not invested in any form of stocks, MF, Bonds outside of 401k.
Do you think if i start investing now am i entering at wrong time when the stocks are at their peak and expectation of a mild recession?.


Thanks Desi, RRK, Bobus, Nigel and others for your help in suggesting portfolio. Let me know if i missed anything or need more clarification.


Best Regards
Sam

Can any one please help with this AAP?.

Thanks
Sam

Read post #1 here http://www.r2iclubforums.com/clubvb/showthread.php?t=257

Provide data in the format requested in post #1.

Familiarize yourself with what is required to rollover your 401K from previous employer to rollover IRA and be prepared to execute when I recommend that in the next couple of weeks.

Does your current employer offer ESPP (Employee stock purchase plan)?

Thanks Desi for the response. I will format according to your recommendation .Do you want me to send it to you in excel format or just paste the text in this thread?.

My company offers ESPP plan, but i have not invested in it. I get 15% discount, I am not sure if the current stock price will go up further, since it has been peaking from last 3-4 years.

Regards
Sam

[QUOTE]Do you want me to send it to you in excel format or just paste the text in this thread?.


You can do both.

[QUOTE]My company offers ESPP plan, but i have not invested in it. I get 15% discount, I am not sure if the current stock price will go up further, since it has been peaking from last 3-4 years.


:emteeth: Peaking for four years. Have you figured how much money you have thrown away over the last four years? When would you buy? It appears that you are worried that after you enroll, this stock will start a downward slide. Note that you have a 15% cushion. And ESPP enrollement does not mean that you buy and hold. You can periodically sell every 2 months.

Desi,

Thanks for your response. Here is my updated AAP based on the format based on your recommendation. also attaching the word document to this reply.

I will plan for rollover 401K based on your recommendation.

I joined this company only 2 years back and i became eligible recently to participate in that ESPP plan and some how was discouraged from people to buy it at this time. I wanted to start of investing with MF's first and get comfortable with them before i jump into stocks and also since my R2I is in 6 years i was not really sure to go for it.

======================================================

1. Return to India (R2I) or Live In America (LIA): R2I

2. Your current age: 35

3. Marital Status: Married

4. Number of dependents and ages: Spouse (33) Son(4) Daughter(2)

5.

(a) Current citizenship and/or Immigration status: GC

(b) If not a USC currently, do you have the option to take up US citizenship prior to R2I?

(c) If you have the option to take USC, do you intend to do so prior to R2I? YES

6. Retirement Age: 52-55


(d) If you plan to work after R2I, what do you estimate your annual after-tax savings to be? 9 lacs



7. Is spouse also working? No

8. RNOR eligibility of you and your spouse (use the calculator in doc section) or how long you have been out of India ? 2 1/2 yrs eligibility

9. . If you are a R2I, going to still work or semi-retire or retire? - Continue to work


10. When are you R2I? - 2012


11. Annual savings:

(a) Current annual after-tax savings including Roth IRA (excluding 401(k) and regular IRA contributions): 36-40K

(b) Current annual savings into tax deferred accounts i.e. 401(k) and regular IRA: 16K (Expecting to maximize 401k, IRA Contributions from 2007)



12. Annual expenses (excluding tax):

(c) Current annual expenses (excluding tax): 40K

(d) What is your current marginal (not average) federal tax rate, based on your filing status? 27%

(e) What is your current marginal (not average) state tax rate, based on your filing status? 8%

13. House owner? No

14. What percentage of your total portfolio loss in a year will make you lose sleep? 10%? 20%? 30%? Or 40%? 20-30%





15. What are your short term(1 year) medium term (2-5 years) and long term (>5 years) financial goals?

(a) Short term - nothing

(b) What are your medium term (2-5 years) financial goals? - Around 6 years after R2I

1. Build a house in BLR, already have a plot, expected total cost 35L including furnishings.
2. R2I Settling expenses (15 lacs)

(c) What are your long term (>5 years) financial goals?


1) Son's education & marriage expenses
2) Daughter's education & marriage expenses
3) Capital growth/accumulation
4) Retirement



16. Do you have any loans? CC? Car loans? House loans? What is the current interest rate? No

17. Do you or your spouse?s participate in retirement plans: 401K, IRA, Roth-IRA? If so, how much do you and your employers contribute every year to these accounts? Contributing for MAX 15.5K from this year



18. Need to save money for your kids future education? If so, please answer the following questions:

(a) Do you have a 529 plan? No

(b) Do you want to fund your kids' Indian or US education or both? If so, please provide a detailed description of the kind of education that you want to fund.

Have not decided if Higher education will be done in India or US, but i want to prepare for US Educational Costs.

Primary/High School in India @ 1Lakh/year/child
- Undergraduate education (a). India @ 5Lakh/year/child or (b). US @40k/yr/child
- PG education in USA @ 40k/year/child



19. If you are R2I, what percentage of your portfolio do you want to leave in US? And where? Stocks? Bonds? Cash?

- Not sure, perhaps 40/60(US/India). Need a lot of help on this.




20. After you retire (cease gainful employment), what do you estimate your annual living expense figure to be (in current dollars or rupees, based on the life style you want)? Does this figure include housing cost?

Rs. 6L assuming owning home.



21. Do you have any insurance? Life, disability, long-term care? Total value of your policy?

Combination of Employer sponsored/self - 500k for self and spouse.


22. Do you have an emergency fund? How it is invested?

Savings account - 10K


Current US Assets* (Please provide a separate breakup of tax deferred and after-tax accounts):


RETIREMENT(before tax ? 40k)

401k: (total 40K)

Here I have thru my past company and current company.

1) Thru Fidelity - Former company - $22,500 - Fully vested

Stock Investments
LARGE CAP
DREYFUS S&P 500 INDX 20%
FA EQUITY INCOME A 15%
FA NEW INSIGHTS A 15%
SMALL CAP
OPPHMR MAINST SMCP A 15%

Bond Investments
STABLE VALUE
FA STABLE VALUE 10%
INCOME
CALVERT INCOME A 25%


2) My current company - $18,375 - Expect to contribute to maximum IRS limits till R2I(for 6 more years)


Stock Investments

American Growth Fund A AGTHX 15%
Columbia Acorn - A LACAX 10 %
Columbia Mid Cap Value - A CMUAX 5 %
Davis New York Venture - A NYVTX 15 %
Eaton Vance Large Cap Value - A EHSTX 15%
Franklin Rising Div A FRDPX 5 %
Royce Value Plus - Consultant RVPCX 5%
Seligman Communication & Information - A SLMCX 5%
Thornburg International Value - R3 TGVRX 15%


Bond Investments
AIM Intermediate Govt - A AGOVX 5%
MET GIC 25053 METGIC2 5%




I am looking to start ROTH or traditional IRA for me and my wife. Appreciate if you can recommend the funds for same.




NON-RETIREMENT(after tax - 120k)


1. Stocks - 0
2. Bonds - 0
3. Cash - 120K in ING savings (5.3% interest) - want to use these funds for investing based on recommendations from the forum.
4. Real estate - 0
5. Other - 0



Current India Assets
(in Rs @ curren mkt value)

1. Stocks ? 0 (Would like help in how I can invest in India considering PFIC rules)
2. Bonds - 0
3. Cash ? 6 Lakhs
4. Real estate ?

- Plot1 (55L): Future home
- Plot2 (46L): Long term investment


5. Other - 0


============================================================================

Need help in investing of stocks, MF?s, in both India/US and suggestion of funds.

Best Regards
Sam

Here is the attachment of my AAP.

TOTAL ASSETS:

Emergency Fund - 10K
401K - 40K
Taxable account - 120 K

Total USA assets - 170K

cash in India 6 lacs

Plots in India
Future Home - 55lacs
Investment plot - 46 lacs

Total assets in India 107 lacs.

Liabilities are zero.

Is the above correct?

Desi,

Yes. Currently in Taxable savings account I have around 120K that I would like to invest based on your recommendation.

Thank you.
Sam

1. INSURANCE:

Just taking some approximate figures: Education and marriage for each child at say $250K each (today's dollars, growth compensates for inflation). That is $500K and then living expenses for the spouse and children for the rest of their lives $500K (3% to 4 % withdrawal would mean about 6 to 8 lacs rupees a year) and a house say about 100K.

This means in event of an early death, Assets of almost $1.1 to 1.2 million needed.

Your current insurance is $500K, Your current assets total is about 400K.

This means that you should have additional term insurance of about 200K to 300K.

A 3 to 4% withdrawal would keep principal intact. If one were to deplete principal say by age 100, one may need a little less (perhaps 10 to 15% less), however the risk also exists in how well spouse manages the money.

Keeping all above in account. I would say you need additional term insurance of 200K to 300K. Of course if your estimates of need are lower, then a lower insurance would be needed.

Your spouse currently does not work. So there is no great need to have insurance on her. She takes care of children at home and if something were to happen to her, you will need to put children thru day care. With your current level of annual savings you can manage that, else that risk is also managed via life insurance.

All life insurance should be Term Life insurance.

2. EMERGENCY FUNDS:

I suggest that you go thru the following thread.

Begin to Invest - your first steps

You have indicated that annual expenses of 40K and Emergency funds of $10K. Your spouse does not work and you have two children. I suggest that Emergency funds are low and should be 20K and not 10K. I suggest to increase that amount. Keep Emergency funds in some short term CD, or money market fund such as VMMXX. It should fetch you at least 5% interest.

I will continue to add more on the other topics, wanted to address Insurance and Emergency Funds first.

If you have any questions post, else I will continue to add in subsequent posts.