AAP for ganapaty01

ganapaty01 · Post by **ganapaty01** » Thu Mar 03, 2011 7:02 pm

1. Return to India (R2I) or Live In America (LIA): R2I
2. Your current age:35
3. Marital Status:M
4. Number of dependents and ages:spouse/35

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? Yes
(c) If you have the option to take USC, do you intend to do so prior to R2I? If beneficial to financial situation, then yes

6.
(a) If you intend to R2I, when do you intend to R2I? 2016
(b) Immediately upon R2I, do you plan to retire (cease gainful employment), semi-retire, or continue to work for some time? Preferably retire.
(c) When do you plan to cease gainful employment (Intended Retirement Age)? 45
(d) If you plan to work after R2I, what do you estimate your annual after-tax savings to be? 0
(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? 0

7. Is spouse also working? Yes
8. RNOR eligibility of you and your spouse (use the calculator in doc section) or how long you have been out of India ? Out of India for 10 years

9.
(a) Current annual after-tax savings including Roth IRA (excluding 401(k) and regular IRA contributions):
(b) Current annual savings into tax deferred accounts i.e. 401(k) and regular IRA $7K (Employee contribution)
(c) Current annual expenses (excluding tax):$30K
(d) What is your current marginal (not average) federal tax rate, based on your filing status? 28%
(e) What is your current marginal (not average) state tax rate, based on your filing status? 0%

10. What is the ratio of your income to spouse's income? 1/0.3
11. House owner? NO
12. If planning to purchase a house to live in, in India, estimate the price you expect to pay if the purchase were to be made today. 60L

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

14. Do you have any loans? CC? Car loans? House loans? What is the current interest rate? NO
15. 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? 7k

16.
(a) What are your short term(1 year) financial goals? Buy house in US
(b) What are your medium term (2-5 years) financial goals? Investments that support us during retirement
(c) What are your long term (>5 years) financial goals? Investments that support us during retirement

17. 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. NO

18. 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? 1200$, 50kINR

19. If you are R2I, what percentage of your portfolio do you want to leave in US? And where? Stocks? Bonds? Cash? No preference. Whatever is financially beneficial

20. Do you have any insurance? Life, disability, long-term care? Total value of your policy? Provide information on any life insurance on spouse also. None
21.Do you have an emergency fund? How it is invested? Include employer provided life insurance information also. Yes. Emergency funds Is 24K

Current US Assets* (Please provide a separate breakup of tax deferred and after-tax accounts):
1. Stocks: $112K (as part of 401K)
2. Bonds : $28K (as part of 401K)
3. Cash $340K
4. Real estate : 0
5. Other: 0

Current India Assets:
1. Stocks:0
2. Bonds0
3. Cash: $8K
4. Real estate: $75K
5. Other

Total Equities
Total Bonds
Total Cash

Total Tax deferred: $140K
Total taxable accounts: $340K

Total equities in tax deferred: $112K (as part of 401K)
Total equities in taxable:0

Total Bonds in tax deferred: $28K (as part of 401K)
Total Bonds in taxable

Total cash in tax deferred
Total cash in taxable $340K

Net equity in real estate in USA (net of real estate commisions) 0
Net Equity in real estate in India $75K

Total Assets in India: $83K
Total Assets in USA : $470K

Questions
1) How should I go about chunking and investing my funds.

prasads · Post by **prasads** » Thu Mar 03, 2011 10:12 pm

Not an AAP expert, but just curious how you are able to contribute 146k annually towards retirement accounts?

ganapaty01 · Post by **ganapaty01** » Thu Mar 03, 2011 10:45 pm

Good catch. That was the total amount currently in 401K. I will update the original post

prasads · Post by **prasads** » Fri Mar 04, 2011 5:54 am

ganapaty01;373788Good catch. That was the total amount currently in 401K. I will update the original post

Ok, thanks for the clarification. The reason why I was asking this is because one of my friends tried to negotiate with his company to put his sales related bonus (may be 30k or so) in0 401k but they refused as it is illegal to differentiate certain individuals on 401k contributions

stup123 · Post by **stup123** » Fri Mar 04, 2011 6:37 am

[QUOTE]
16.
(a) What are your short term(1 year) financial goals? Buy house in US

I dont see this as a smart move,financially.May be tough to breakeven in such a short duration if you want to sell it before r2ing,given the markt conditions
Do you intend to rent it out when you r2i or you want to enjoy your own place for the next 4 years?

ganapaty01 · Post by **ganapaty01** » Fri Mar 04, 2011 8:08 pm

stup123;373889I dont see this as a smart move,financially.May be tough to breakeven in such a short duration if you want to sell it before r2ing,given the markt conditions
Do you intend to rent it out when you r2i or you want to enjoy your own place for the next 4 years?

The intent was to enjoy place for the next 5-6 years and then move back. Additionally, if I change my mind regarding moving back, equity in the house will will work in our favor.

I will update the original post with this additional information

Desi · Post by **Desi** » Mon Mar 07, 2011 8:52 pm

Why 340K is sitting in cash for someone who is only 35 boggles the mind. Unless there is an immediate near term need, this shows extreme risk averseness. By doing so, you have for sure missed the great run in the markets in the last 12 months and more.

oasis138 · Post by **oasis138** » Mon Mar 07, 2011 10:15 pm

over 60% of net worth in cash and "13. What percentage of your total portfolio loss in a year will make you lose sleep? 10%? 20%? 30%? Or 40%? 30%" seem at odds with one another.

ganapaty01 · Post by **ganapaty01** » Mon Mar 07, 2011 10:40 pm

Desi - You raise valid questions. For the last several years, we have been waiting on the GC boat and were ready to give up everything and go back. To add to that, emotional/family pulls raised to many questions on where we will settle down. Finally we got our GC and after a long drawn out process the decision that we came to is to go back to India when we can afford to work for the sake of working and not rely hand-on-foot for the paycheck. We decided to circle back on that decision 5 years from now and until then would like to be here and start investing (RE, Equities etc) towards that goal.

Oasis138 - 30% risk is acceptable to me. Going with that mindset, my 401K is set as an aggressive portfolio as well.

Any help with opening my blinders and setting me on the right direction would be truly appreciated

Desi · Post by **Desi** » Mon Mar 07, 2011 11:11 pm

ganapaty01;374472Desi - You raise valid questions. For the last several years, we have been waiting on the GC boat and were ready to give up everything and go back. To add to that, emotional/family pulls raised to many questions on where we will settle down. Finally we got our GC and after a long drawn out process the decision that we came to is to go back to India when we can afford to work for the sake of working and not rely hand-on-foot for the paycheck. We decided to circle back on that decision 5 years from now and until then would like to be here and start investing (RE, Equities etc) towards that goal.

Oasis138 - 30% risk is acceptable to me. Going with that mindset, my 401K is set as an aggressive portfolio as well.

Any help with opening my blinders and setting me on the right direction would be truly appreciated

OK, I do not consider RE as an investment for the average working Joe. I have no issues if one chooses REITs in their portfolio but not a direct RE purchase.

That said, I would suggest that there are a number of detailed AAPs in this forum and I would suggest to go thru them, start developing one on your own. That way, you will feel better in control of your investments.