Reviewing my R2I plans

[OneWorld451]

Long time lurker, first time poster.

First of all thanks for this wonderful forum, this forum is a gold mine of information and has helped me understand various perspectives on R2I.

We are a family of 3, kid 2 year old and 4th member will be arriving in June 2016. Me and Wife are on our H1B waiting for our green cards, kid US citizen. Both of us are on the same page with respect to R2I. We are planning to go back to Hyderabad in 2018 assuming everything goes well with the little one due in June.

Little bit about me, I am 33 years old and have grow up in a town 90 KM south of Hyderabad, been in US for last 10 years. Typical story of a telugu guy, MS --> Job --> Marriage --> Kid --> Buy Home --> 2nd Kid. My father is a farmer and mother home maker, two siblings both live in Hyderabad. I am very close to my parents and of late my Dad is not doing so well health wise. Growing up I faced some tough financial situations. So I want to make sure I am financially OK before I pull the trigger. Parents will be living in the house (which is about to finish) in tier 2 city which will generate 15k rent per month and might need a little support from me after the rental income.

Me and wife are both in IT and are planning to work after R2I, wife may stop working if we think we can manage with single income in Hyderabad.

Financial situation:

US
- Home equity - 60k (after realtor cut)
- 401k + IRA - 120k (assuming 40% tax, 72k technically)
- Investments (Mutual funds and stocks) - 50k
- Savings - 10k

India
- House in tier 2 city - appox 1 Crore - Rs. 15K rent per month
- Couple of plots in tier 2 city - 40 Lakhs

Plan is to take the proceedings from US assets and buy an apartment in a gated community in Hyderabad and other major purchases like car and stuff, put the remaining amount (if any) in medium risk mutual funds in India.

Would like to hear your thoughts on financial/R2I plan and any other comments and questions. Also, I am a database administrator with 8 years of experience and wife .net developer with same amount of experience. If any of you are based in Hyderabad would like to hear some ball park numbers for the expected salary.

Thanks.

[mate4all]

Congratulations on your first post.

You seem to be very well set financially, what's the reason to wait until 2018?

If wait is for GC then are you sure all will be done by 2018? yes if you are only few months away from current PD.

Database Administrator, not much knowledge on Indian salary but my guess would be 35-40% of your current salary or between 20-25 L INR.
Maybe more experience member will provide accurate info.

Are you Oracle or SQL DBA? wondering how much DBA's earn in USA, can you share any range?

[OneWorld451]

Thank you for your the reply, I was feeling a little disappointed with no replies after 176 views :)), may be its the weekday.

Reason for 2018 is to wrap up the immunization for the little one, have some breathing space after the little one and of course to make some dough to have some cushion :).

PD is Nov 2013, so no hope that I will get my GC by 2018.

20-25 L INR is the salary I was kinda hoping for.

Primarily an Oracle DBA, can also do postgreSQL and MySQL. Currently making around 110k, with 10-15% bonus and other usual benefits.

[ILuvHyd]

OneWorld451,

Pretty much you have to abandon GC. Actually getting a GC now will complicate your timeline.
Use a staged withdrawal after you R2I to reduce the 401K tax burden.

Hyderabad is best option for you as you can frequently visit your parents. Your salary should be 20-25 lakhs. But if there's an internal company transfer option, you can demand and get 20-25% more due to synergies.

If your wife is a working woman, she might miss work. Check with her if she wants to work. Try for some part time/teaching options for her once you are there.

On housing, I suggest you start renting in a nice community and if you like it, plan to get a good deal on a used apartment sale.

Also on your father, keep a close eye, move early if you have to. I hope once he sees you there on ground and with your frequent visits, his health improves.

Good luck with your R2I.

[ILuvHyd]

Are you Oracle or SQL DBA? wondering how much DBA's earn in USA, can you share any range?

Range is wide 80-130K in average cost of living areas based on experience and skill level. 10-20% +/- for high/low cost areas.

[OneWorld451]

PM
OneWorld451,

Pretty much you have to abandon GC. Actually getting a GC now will complicate your timeline.
Use a staged withdrawal after you R2I to reduce the 401K tax burden.

Hyderabad is best option for you as you can frequently visit your parents. Your salary should be 20-25 lakhs. But if there's an internal company transfer option, you can demand and get 20-25% more due to synergies.

If your wife is a working woman, she might miss work. Check with her if she wants to work. Try for some part time/teaching options for her once you are there.

On housing, I suggest you start renting in a nice community and if you like it, plan to get a good deal on a used apartment sale.

Also on your father, keep a close eye, move early if you have to. I hope once he sees you there on ground and with your frequent visits, his health improves.

Good luck with your R2I.

hello ILuvHyd,

I am an avid reader of your dairies, you have some serious writing skills. Some of your feelings for Hyderabad resonate with me, lived few years in Hyd before I came to USA.

Read something up on 401k withdrawal, do I need to do staged withdrawal while I am in US ? Looks like if you are a non-resident (for tax purposes) its 30% flat ?

Wife is big into baking and stuff, must confess she is good :). She makes cakes for our friends here for birthday parties, her goal is to setup something in those lines and get busy. But before we go all in with this plan, we would like to test the waters out and work initially in IT. Her current employer has a office in Hyderabad and she might probably get an internal transfer.

I appreciate your suggestions on housing and 401k.

Thanks!

[mate4all]

(My personal opinion, some might definitely disagree)
I would think below will also ease your move,
1. If possible buy property now and make sure someone is there to look after that property.
2. Slowly remove money from US stock market and start investing in India

You might think about INR devaluation in future, US is safe market etc etc... but I truly believe in above for longterm gain.

[Chakraan]

Typical story of a telugu guy, ....

I was feeling a little disappointed with no replies after 176 views

Don't worry, your thread has potential of 100 posts :)

What motivated you to come to USA given the condition you had earlier in India ?

How did you overcome those?

Once you got everything, now you want to call it a quit ?

It is like American sports fishing, they catch the fish after long day of hard work then they let it go back to the water.

[vasu123]

Long time lurker, first time poster.

First of all thanks for this wonderful forum, this forum is a gold mine of information and has helped me understand various perspectives on R2I.

We are a family of 3, kid 2 year old and 4th member will be arriving in June 2016. Me and Wife are on our H1B waiting for our green cards, kid US citizen. Both of us are on the same page with respect to R2I. We are planning to go back to Hyderabad in 2018 assuming everything goes well with the little one due in June.

Little bit about me, I am 33 years old and have grow up in a town 90 KM south of Hyderabad, been in US for last 10 years. Typical story of a telugu guy, MS --> Job --> Marriage --> Kid --> Buy Home --> 2nd Kid. My father is a farmer and mother home maker, two siblings both live in Hyderabad. I am very close to my parents and of late my Dad is not doing so well health wise. Growing up I faced some tough financial situations. So I want to make sure I am financially OK before I pull the trigger. Parents will be living in the house (which is about to finish) in tier 2 city which will generate 15k rent per month and might need a little support from me after the rental income.

Me and wife are both in IT and are planning to work after R2I, wife may stop working if we think we can manage with single income in Hyderabad.

Financial situation:

US
- Home equity - 60k (after realtor cut)
- 401k + IRA - 120k (assuming 40% tax, 72k technically)
- Investments (Mutual funds and stocks) - 50k
- Savings - 10k

India
- House in tier 2 city - appox 1 Crore - Rs. 15K rent per month
- Couple of plots in tier 2 city - 40 Lakhs

Plan is to take the proceedings from US assets and buy an apartment in a gated community in Hyderabad and other major purchases like car and stuff, put the remaining amount (if any) in medium risk mutual funds in India.

Would like to hear your thoughts on financial/R2I plan and any other comments and questions. Also, I am a database administrator with 8 years of experience and wife .net developer with same amount of experience. If any of you are based in Hyderabad would like to hear some ball park numbers for the expected salary.

Thanks.

Nice. your profile is good and you did everything on time with nice planning. Forget about GC (with 2013 PD).
BTW, are you a Full time Employee in USA or doing contracting?

[ILuvHyd]

Read something up on 401k withdrawal, do I need to do staged withdrawal while I am in US ? Looks like if you are a non-resident (for tax purposes) its 30% flat ?

No, I don't think so. It falls into the income of that year. Combined with RNOR flexibility in India for 2 years after your return, you should be able to minimize the tax liability. Read this article:

http://www.investopedia.com/articles/personal-finance/100515/how-are-401k-withdrawals-taxed-nonresidents.asp
[QUOTE]
However, a tax expert may offer different advice to a nonresident who is planning to return to his or her home country. If you move back and wait until the next tax year to cash out your 401(k), you will most likely fall into a lower tax bracket since you’ll no longer be working and earning income in the U.S. This could greatly reduce the amount of income tax you’ll have to pay on the 401(k) distribution. Remember: No matter where you live when you cash out, you’ll still have to pay the 10% early withdrawal penalty if you’re younger than 59½. (For more, see How Do You Calculate Penalties On a 401(k) Early Withdrawal?)


Also search for 401K withdrawal on our forum. I just did and some of these useful old threads came up.
http://www.r2iclubforums.com/forums/forumdisplay.php/109-USA-401k-IRA-Roth-Strategy
http://www.r2iclubforums.com/forums/showthread.php/33962-401K-withdrawal-plan-for-soon-to-be-Non-Resident-Alien-after-R2I?highlight=401k+withdrawal
http://www.r2iclubforums.com/forums/showthread.php/39254-Indian-Taxes-for-401k-IRA-withdrawal-after-more-than-7-years-of-R2I?highlight=401k+withdrawal

[QUOTE]
Wife is big into baking and stuff, must confess she is good :). She makes cakes for our friends here for birthday parties, her goal is to setup something in those lines and get busy. But before we go all in with this plan, we would like to test the waters out and work initially in IT. Her current employer has a office in Hyderabad and she might probably get an internal transfer.

Better to purse internal transfer for your wife. Try to negotiate some relocation which would be expenses and tax free for you, even at the expense of a little lower salary.
Once she settles and get a feel back home, she could get into her passion of baking. In India there's a serious dearth of quality food, so if you stick to good quality it might work out for you in the long run. In the short run the IT money would be too lucrative and hard to beat.