I've moved this post series to my own blog now. You can find it here. https://cubicledog.substack.com/p/ive-started-my-fire-journey-in-india Blind Post Links: (Retaining the links so all the valuable comments are not lost) Part 1: https://www.teamblind.com/post/sqhzju14 Part 2: https://www.teamblind.com/post/ShzXbLBN Part 3: https://www.teamblind.com/post/4j3vmX8N One Year Update: https://www.teamblind.com/post/ak7GJVsu
Amazing information! Thanks so much for putting this out for others. Very useful information. I am in similar financial situation, with 500k in retirement accounts combined between me and my spouse. Do you plan to keep the money till you turn 59? Or is it worth to pay penalty and withdraw early?
For now, yes, that's the plan. I don't intend to touch the money in our retirement accounts unless I'm out of all other options. I'd be really sad seeing that 10% early withdrawal penalty chunk being taken away from me. I'm also not keen on pulling that money out of the US stock market.
First of all, thank you for such an awesome post! Can you access/withdraw funds from your fidelity IRA account outside of US? For some reason I feel insecure to leave $ in US after going back to India.
Can you use your hsa funds for any medical expenses in India?
Yes. You can use HSA funds even in India
Do they accept receipts from India and other countries? What if the receipts were not in English?
Just comments about your plan. - Would suggest chase over BOA checking account since it has $1500 minimum balance requirement - Port your US number over to Google Fi and later you can port from Fi to Google voice so that you can keep the US number with you for free forever (or till Google decides to shut down Google voice :( ) - Since you have over $440k+ in traditional IRA and you mentioned that you want to convert to Roth and wanted to stay within 12% tab, keep in mind that India will tax you on global income including Traditional->Roth conversion if you are Indian tax resident. Hence, would suggest doing most of the conversion when your Indian tax status is RNOR which is this financial year and likely next financial year based on tax rules. - Another thing to keep in mind is that, after you move to India, you will be a US tax non-resident next year. So you will not get any standard deduction for taxes. - Also, Roth earnings are taxable in India even though it is not taxed in US.
Roth earnings are taxable in India? 🤯 Thanks for sharing this. Very hard to find all this info online.
Roth taxation is a complicated topic. This link should explain all possible ways to get money out and how they are taxed. https://economictimes.indiatimes.com/nri/returning-to-india/nri-back-in-india-heres-what-to-do-with-your-401k-plans/articleshow/11631199.cms
So you planning to keep most of your money in US, how much are you planning to transfer to India and when.
Had this exact question.
I still have to come up with a well thought out drawdown strategy. I'll try to get that done sometime in the coming weeks and put it up here. In our marriage, I've pretty much entirely handled our finances. My wife has placed her complete trust in me so far and I haven't done anything stupid yet. But I still worry about a world where I'm suddenly gone and my wife is left to fend for herself and our son. So I've always wanted to write up a strategy document for my wife that has the theme of 'How to handle our money if I die'. I might make that doc public here on Blind. 😆
Why do you need to transfer money from brokerage account to BOA account and then to India account? Can’t Xoom transfer from brokerage account to India account?
I see. I did not know we could use brokerage accounts as the direct source of funds in Xoom. Interesting!
It depends on how Xoom works (I never used it). Brokerage accounts don't have the typical routing number & account number that bank accounts have.
Very thorough dude. Thanks for sharing this with us. Good luck to your family! One thing you haven't mentioned is that even the traditional 401k/IRA withdrawals attract a 30% flat alien tax, doesn't matter whether it's qualified or not. You are an alien since you withdraw from outside the US. Is my understanding correct?
No. 401K/IRA qualified withdrawals are the same for non-residents and residents. 30% flat tax is for NEC (not effectively connected) income which is like stock capital gains.
Let me look further about this too. Thanks for clarifying.
Hey, converting 401k to IRA has a pro rata rule, how did you manage?
I'm not aware of any such rule. Could you elaborate a bit? What I did isn't technically a conversion. It's just a rollover. You need to be careful about rolling over from the right source to the right destination, else you'll attract a tax bomb. Traditional 401k and associated earnings go to traditional IRA Roth 401k and earnings go to roth IRA After tax contribution goes to roth IRA After tax earnings go to traditional IRA.
Okay, that probably is the pro rata rule then, might be wrong here. Can someone help elaborate?
I loved your posts and now I'm freaking out because no way will I ever have 1.6 M in the near term (1 to 2 years) to FIRE 🔥. Also, do you mind posting an experience of the most important thing which is life back in the country once you moved
1 or 2 years? So you're almost there :) As long as you don't absolutely hate your job, shouldn't be too hard to ride out those couple years. Might even be a good idea to switch jobs and speed up your journey to FI with the sign on bonus and RSUs. This is also a good time to start dabbling in things you would want to do once you begin your post-working life. I'll definitely post my experiences - my plan is to put out a post at the end of every year. Good luck with your journey!
Just posted Part 3 (A list of miscellaneous loose ends that I had to tie up before leaving.) Part 3 (Miscellaneous Odds and Ends Before Leaving US) https://www.teamblind.com/post/4j3vmX8N
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