How to maximize savings if planning to move to India in 5-7 years

Cisco / Eng Agnet007
Jun 17 31 Comments

Hi All,
I am currently working at Cisco, San Jose with a base of 125k (and 50K RSUs which I got just now) - Grade 8 currently. I have an MS degree in CS and about 5.5 years of experience right now (2 years in India before MS and 3.5 years here at Cisco). My wife is also at a similar job with the same pay.

We have a plan to move to India in 5-7 years. Keeping that in mind, how do we maximize our savings here in the US? Would you guys suggest that we move out of Bay Area to some other low cost places like Austin, Raleigh etc.? Also, would buying a home (in Austin/Raleigh) and selling it off in 5-7 years give us a profit (or at least no-loss)?

Sorry for the long post, we are really confused as to what the next step should be. Any help/input is greatly appreciated.

Thanks in advance!

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TOP 31 Comments
  • Google / Eng
    ಬಡ್ಡಿ ಮಗ

    Google Eng

    PRE
    Amazon, Netflix
    ಬಡ್ಡಿ ಮಗmore
    We're in a similar situation. After doing some research, here are a few things to do:

    Maximize your TC by jumps.

    Max out pre-tax 401k - withdraw it after moving to India (lowers tax rates + employer match).

    Don't buy a house - speaking as a homeowner, the current tax laws are not favorable to buy in the Bay area. Unless you're sure that a house price will go up by 50% or more, don't bother.

    Don't buy stuff, travel - visit Europe, south america, Canada instead of that flashy BMW. You're less likely to visit these places once you go back to India. Also, stuff loses value quickly.

    Join Google/Microsoft a year before you leave to India - you get to keep your stock grant.
    Jun 17 7
    • Citrix Systems / Eng peda
      Hi baddi maga ?! Nice name
      Jun 17
    • Google / Eng
      ಬಡ್ಡಿ ಮಗ

      Google Eng

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      Amazon, Netflix
      ಬಡ್ಡಿ ಮಗmore
      https://www.quora.com/Is-it-good-to-invest-in-a-short-term-401k/answer/Piaw-Na

      You can avoid the 10% penalty. Also, I plan to retire from tech in India i.e. can withdraw the amount over time with much lower tax rates. Even if you do work in India, you're in a lower tax bracket than as a California employee.
      Jun 17
    • Cisco / Eng Agnet007
      OP
      Thanks for the suggestions and detailed reply - helps a lot :)
      Just to be clear, I do not intend to (or afford to) buy a house in bay area. House is in the equation only if I move out of here. Do you suggest that I should move out to maximize the savings?
      Jun 17
    • Google / Eng
      ಬಡ್ಡಿ ಮಗ

      Google Eng

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      Amazon, Netflix
      ಬಡ್ಡಿ ಮಗmore
      If you move out of the bay, you take a pay cut and also might not be able to maximize TC. Seattle may be the only exception due to the tech/TC boom. Not sure of the future housing trends there.

      You should still be able to maximize savings in the bay area unless companies in Seattle offer to match/beat your comp.
      Jun 17
    • Nuveen Investments gFRX04
      Which non FAANG companies let you keep RSU grants upon moving to India.
      Jun 17
  • Microsoft / Eng
    Gehjiddrt6

    Microsoft Eng

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    Gehjiddrt6more
    Avoid buying things you don’t need. Save as much as possible with keeping the necessities.

    Start investing in Indian real estate e.g. buy a land. It is easy to save in USA than in India. Once you move, you already will have house money.

    Don’t sell stocks or any investments in USA, they will be helpful given the inflation in India.

    Reduce the house rental cost which is maximum cut from paycheck to increase saving to invest in India instead. You can move to lower cost area but you need to also calculate the actual difference in cost of living. If living far from work is an option, do that.

    Don’t buy house if you are here for 5 years. The first 5-7 years are only interest, plus you will need to pay for realtors and other parties when you sell. House will be profitable only if the appreciation in 5 years is more than 15% and provided it sells easy, in short, high risk given your time frame. Instead you can rent a cheaper place little far from work.
    Jun 17 6
    • Salesforce / Eng namehere1
      But is that a risk that you are willing to take given the tight timeline?
      Jun 17
    • Cisco / Eng Agnet007
      OP
      Yes, I am willing to take a little calculated risk here if it gives me a better lifestyle. Meaning, I am not stringent to save each and every dollar I can. I am open to spend some money for some luxury here - if that makes sense :)
      Jun 17
    • Oracle / Mgmt aiabc
      I will say put some amount of that 30k in cds here , I saw a good deal from us bank which was offering 2.78 annually , less but still better than putting the money in savings and no risk
      Jun 17
    • Microsoft / Eng
      Gehjiddrt6

      Microsoft Eng

      PRE
      Amazon
      Gehjiddrt6more
      The problem is not about luxury, but rather investment return given your time frame.
      You can technically rent the same house at same place living the same quality.

      If you looking to still buy, you need to calculate — (interest paid in those 5 years + depreciation + selling cost + risk of not being able to sell) < rent of house for 5 years.

      If its not less, you have better investment at renting instead and not sacrificing anything
      Jun 17
    • FactSet QAiE55
      I made this move 5 years back. If the things dicusssed here, most important is to buy real estate in India soon.
      Jun 19
  • CVS Health Canada🇨🇦
    Post it here if you ever move back to India. Everyone says they will move back after a few years but a LOT of people keep living here. Agree or not, it's all about 💲💲 man.
    Jun 17 5
    • Cisco / Eng Agnet007
      OP
      Completely agree. I am trying not to take in too much at this point and plan whatever I can for now :P
      Jun 17
    • New Glutton
      Disagree ! With rising Indian salaries lot of people stay back due to family reasons, home here etc.
      Jun 17
    • CVS Health Canada🇨🇦
      I don't understand what you mean, people stay back because they have home in India? Do you want to say people move to India because of family reasons, home etc.? If so, then only a very few people do that and that too in very very compelling circumstances.
      Jun 17
    • New Glutton
      People stay back in US as they have home/family in US. Money saved is not much in US these days unless one is in FANG etc.
      Jun 17
    • Microsoft / Eng
      Gehjiddrt6

      Microsoft Eng

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      Amazon
      Gehjiddrt6more
      It is about money, that’s the major reason, apart from good quality of living which they didn’t know back then.

      The whole country is build on money, i think that is why they call capitalist country.

      To the core, its all about greed, but controlled greed for most immigrant Indians, once it satisfies your needs you go back to your country/family with a better financial situation and more educated from US universities earning better there too- of course if there is some emergency overruling that greed, some can move earlier than expected.

      Some never make it that far to satisfy their greed, or cannot earn well if they move back or have some other reasons e.g. kids career, they choose to stay back till they are not forced to relocate to India.

      The reality is everything in India or anywhere else cost money, even a medicine to insure future for your family.

      In the end everyone wants better financial standard, education and better life for them and their kids whether its an immigrant or not, just that immigrants are always on edge of the knife so its hard to make the right decision.

      It would be a lie if anyone say its not about money. The question we should be asking is why money is important to them and how far they are willing to go for it, for instance someone was very poor and coming here earns them and their family back in India a living.
      Jun 17
  • Oracle / Mgmt aiabc
    How much
    Do u intend to save before heading to India ? How much of investments do you already have ?
    Jun 17 1
    • Cisco / Eng Agnet007
      OP
      Sorry for not mentioning it earlier. we do not have an exact target amount before leaving - our target is more about the deadline of 5-7 years rather than the amount. But, of course, we would want to make the most of these 5-7 years :)
      Right now, we have about 30k in savings that we can use as investment.
      Jun 17
  • Dell jdjdjska
    Moving to Austin/ Round Rock can definitely help, here you can still find nice houses for 250k-350k or rent really nice(think pool houses) places for less than $3000.
    Jun 17 2
    • Cisco / Eng Agnet007
      OP
      Thanks for the suggestion. Any idea how the appreciation of house prices in Austin is? I am trying to at least make a no-loss if I buy a house.
      Jun 17
    • Dell jdjdjska
      Steady 3%-5% appreciation every year , predicted to accelerate since apple just invested a $1B here to add more jobs
      Jun 17
  • New Glutton
    Change jobs for starters
    Jun 17 1
    • Cisco / Eng Agnet007
      OP
      I am willing and planning to. But I am confused if I should look for a job here in the Bay Area or elsewhere.
      Jun 17
  • Microsoft titli
    H7
    Jun 19 0
  • Microsoft D)usRl?4
    You should consider setting yourself a $ target based on how you want to live in India. It will make it way easier on day to day decisions, as you can then weigh the pros and cons vs achievement of that target.
    Jun 17 0
  • Comcast G0ku
    Switch jobs every 2 years, negotiate higher base/cash bonuses. Make sure you have competing offers every time and use them to negotiate higher sign-on bonus over equity. The reason is that you won’t be vesting all stocks/options if you intend to leave, but never say that to recruiter/HM.

    When you are ready to leave, see if your company can internally transfer you to the Indian branch. Some lucky people get to keep your USD salary/unvested stocks.
    Jun 17 0