$100K in US vs Rs30L in India... which is better?

[vsri]

When I came to us salary in India was in the range of Rs70K per year and US salary was $60K. 1USD = Rs35 or 40 (I guess). So salary in US was attractive so without thinkingI moved here. Now if I look at the salary now. Indian salary is more attractive.

So question is how much I can save here in US.

Out of 100K.. tax and social security (8K + 12K).. So net I get $80K.
My expenses 3K/month ... 36K (with no mortgage).
India trip/vacation ... 10K.

So net saving per year .. $24K.

How much we can save with 30lac salary in India?
30L - tax 8L = 22L.
Yearly expense = 10L

I think I can save 12L ~ $26K.

So my question is.. is it worth staying in US?

If I add up my returns from my savings.. I think I can make more money in India now. Make sense. Or is it just my illusion.

[okonomi]

You need to redo your calculation: here is some help: http://www.moneychimp.com/features/tax_brackets.htm
Using that site's federal tax calculation for 100K gross income in US$ your federal tax will be $21600, then there'd be state and local taxes, medicare and FICA withholdings. After the corrections, monetize all facets of staying versus not-staying, and tabulate them in two columns and add them up. To answer your own question, viz.,

.....
So question is how much I can save here in US.

Look at your worksheet on 10 good days and 10 bad days and see how it goes... Keep doing it until you are ready to collect on your FICA payments.

[vsri]

You need to redo your calculation: here is some help: http://www.moneychimp.com/features/tax_brackets.htm
Using that site's federal tax calculation for 100K gross income in US$ your federal tax will be $21600, then there'd be state and local taxes, medicare and FICA withholdings. After the corrections, monetize all facets of staying versus not-staying, and tabulate them in two columns and add them up. To answer your own question, viz.,

It was rough estimate.. $12K tax for taxable income. You will have standard deduction.. etc..

My point is simple. About a decade ago we could save 10x more in US than in India. Now we could save 2 or 3 lac more than in India at the most doing same/similar job.

[gurusw]

#1, I had done similar calculations before I R2Ied. However 10L/year expenses in India would seem on the lower side considering the inflation, real estate prices, & education costs. Also lot of people in India nowadays do overseas trips on yearly basis. Do not take R2I decision based on these figures. Evaluate your family situation, work-life balance, etc before taking the plunge.

[vsri]

#1, I had done similar calculations before I R2Ied. However 10L/year expenses in India would seem on the lower side considering the inflation, real estate prices, & education costs. Also lot of people in India nowadays do overseas trips on yearly basis. Do not take R2I decision based on these figures. Evaluate your family situation, work-life balance, etc before taking the plunge.

I agree your point.

Reason I came to US is for money even though it was hard to live parents back home. (It was a painful experience every time returning back from India. I used to see tears in my parents eye). I never thought about family situation. I was not there in India to support my father when he was sick.

I agree family is more important than money.

Anyway, so just from money perspective US is not attractive any more. That is what I see now. I never imagined things would change so fast.

[oasis138]

I agree your point.

Reason I came to US is for money even though it was hard to live parents back home. (It was a painful experience every time returning back from India. I used to see tears in my parents eye). I never thought about family situation. I was not there in India to support my father when he was sick.

I agree family is more important than money.

Anyway, so just from money perspective US is not attractive any more. That is what I see now.

You should not let marginal differences (2k or 5k or even 10k) decide what's a better option. A lot of folks in India for e.g. would happily take a more balanced approach to work-life that US offers vs potential for a lot more money that India might offer. You yourself mention that family attachment has a value (its intangible by definition...you cant assign a value to it)...

btw a lot of your calculations has a FX component attached to it....what if USd-INR tmrw goes to 1:50 ??

[oasis138]

I agree your point.

Anyway, so just from money perspective US is not attractive any more. That is what I see now. I never imagined things would change so fast.

That again depends on the profession...for IT (I am not in IT but based on what ive read here and my friends have discussed) the "spread" between Indian and US salaries for the same job desc. has reduced a lot....In other fields like Finance for e.g. the trend is similar but the absolute spread is still quite large....

That's just the raw salary part....you can adjust that for things like intangibles/ quality of work/life etc..

[SetToGo]

Also the higher returns in India are misleading. Read about Interest Rate parity on Wiki. Also exchange rates are misleading. Read about Purchasing Power Parity. For example, even though $1 = Rs 45 and say a bread in US costs $3, it doesn't cost Rs 135 in India.

[RBee]

OP had a typo I think. Either the Federaltax+SS+Medicare tab is $30K to make net salary of $70K and a savings of $24K per annum or if tax tab is correct, then the savings will be $34K per annum. Even your $550K thread had wrong assumption that all the monies in 401K/IRA was like cash (not so because of early withdrawal penalties and tax payments to uncle Sam if contributions had gains).

Now coming to your question, depends on your age. If you are in early to mid-30s, a coveted age in Indian IT companies, yearly salary raises and title upgrades are attractive than in US right now and if you already have a paid house in the place you are planning to return to not worry about monthly EMI, then the 10L per annum cost in southern metros (Bangalore, Hyderabad, Chennai) or Pune is feasible. I hear only NCR area, costs are higher because of 'keeping up with jones' syndrome !!

I noticed that you tend to quote $ figures in title of your threads; a sensational way to draw people to your threads which discuss non-financial aspect as side drop! I like it :)

[vsri]

You should not let marginal differences (2k or 5k or even 10k) decide what's a better option. A lot of folks in India for e.g. would happily take a more balanced approach to work-life that US offers vs potential for a lot more money that India might offer. You yourself mention that family attachment has a value (its intangible by definition...you cant assign a value to it)...

btw a lot of your calculations has a FX component attached to it....what if USd-INR tmrw goes to 1:50 ??

Yes. We can't assign a value to family attachment. Decade ago we could ignore those attachment values and got attracted to US salaries.

As far as FX component is concerned.. it can go either way.. it can be 1:70 or 1:30. Looking at current US economy I wouldn't be surprised
if USD-INR goes to 1:30.