r2i forum

vivmat;16020
In all seriousness, you can look to increasing your 401k contributions. Ofcourse, this is a sticky wicket - please search the forum (and the old one) for 401k withdrawal strategies based on r2I and resident status etc - tonnes of info on that is available.

Are you deducting your home loan payments?[/quote]

Thanks for your reply. I will surely search for old posts about 401k contributions and R2I strategies. The interest paid on home loan in India, when converted to USD, works out to be less than the standard decution for married filing jointly. This becomes useful when you have a primary home in US and secondary home say in India.

namaste;16025Thanks for your reply. I will surely search for old posts about 401k contributions and R2I strategies. The interest paid on home loan in India, when converted to USD, works out to be less than the standard decution for married filing jointly. This becomes useful when you have a primary home in US and secondary home say in India.[/quote]

If your R2I is at least 6 years away, why not buy a home now? If the RE market is soft now, you can get some great deals. Also, just because it is soft now does not mean it will be soft 6 years from now. I would also maximize the 401K contributions. Make sure you consider impact on R2I when you take distributions at the time of R2I into account. In any case, you don't pay taxes now and pay them later. With your tax bracket, it seems like you will pay less later, esp if you are able to show less income when you take the distributions during R2I.

Then there are govt securities and bonds, which the gurus will point out. The only thing is appreciation is low, so you miss out on growing your investments at the same rate as the market.

Chicago Desi;16030If your R2I is at least 6 years away, why not buy a home now? If the RE market is soft now, you can get some great deals. Also, just because it is soft now does not mean it will be soft 6 years from now. I would also maximize the 401K contributions. Make sure you consider impact on R2I when you take distributions at the time of R2I into account. In any case, you don't pay taxes now and pay them later. With your tax bracket, it seems like you will pay less later, esp if you are able to show less income when you take the distributions during R2I.

Then there are govt securities and bonds, which the gurus will point out. The only thing is appreciation is low, so you miss out on growing your investments at the same rate as the market.[/quote]

Thanks CD and vivmat for your inputs.

RE market in Seattle, WA is still pretty hot as compared to rest of the country, especially on the Eastside. I guess I need to do some homework on tax exempt munis and money market funds, while still working out buy v/s rent strategy with 6 years to r2i.

namaste;16033Thanks CD and vivmat for your inputs.

RE market in Seattle, WA is still pretty hot as compared to rest of the country, especially on the Eastside. I guess I need to do some homework on tax exempt munis and money market funds, while still working out buy v/s rent strategy with 6 years to r2i.[/quote]

I think you will need to do a AAP. That will really tell you if you need to worry about tax exemption at all. Start one and get inputs from the gurus like Desi and they will guide you in the right direction. Good luck.