Author Topic: Need investment advice for a man at crossroads  (Read 1960 times)

FamilyGuy

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Need investment advice for a man at crossroads
« on: September 12, 2019, 11:48:09 AM »
I'm a non-immigrant worker, on a work visa. I might get the green card and settle in the US or move to India after n years. Being in this middle ground confuses me very much when it comes to investment.

I'm not maxing 401k because I don't know where I will be when I'm 65 years.
No significant contribution to HSA for the same reason
NO IRA or Roth as well.

I have 41k in 401 and match employer contribution. Other than that this is how I've put my money so far.

Real Estate $192k (India - lands that are expected to appreciate high in 20 years and one home for us and 3 mini rental apartments.USA - 1 townhome bought last year, just did 5% downpayment )

Investments in the family business - $15k. Approximately 20% returns guaranteed. But don't want to take risk of contributing too much. My plan is to keep investing $15000 yearly max.

Investments Peer to Peer - $7k (28% returns & very risky/don't want to add more)

Investments in Gold, bank investments - $53k (bank investments have to continue at $5200 yearly)

Savings Account- $6.5 k

Money lent - $3 k (hope it returns back)

My current networth is $320k.

Family of 4: Me (age 33), wife (age 28) and 2 kids (age 4 and 3)

Income:

Salary after taxes/401k contribution - 83k yearly
Bonus - approx 12k yearly after tax
Interest from rentals & investments in India - $9k yearly
Wife is not working for now.

Expenses:
Mortgage/tax/pmi/hoa - USA home: $1570 (1700 sq ft town home, bought at $250k)
Mortgage - Indian Rental apartment: $1100 (will be done in Aug 2021)
Utilities - $295
Groceries - $400
Fun/Misc/Eat out/Gifts - $220
Car/Gas - $210
School - $320

Total: $4100 (will become $3000 after the rental mortgage closes in 2021).
Total yearly: $49200
Savings: $46000 (Not considering mortgage principals/401k etc).

I'm looking for advice on how to invest $46000 after considering my "middle ground" situation.

If I settle in India, in the current situation I would need $750 monthly to live a fairly frugal life. I currently get this from rentals &

investments. I would need $1500 for not so frugal life and considering unexpected expenses (India doesn't have good health care system).

If I settle in the USA, I think $30,000 yearly is good for us.

I like my work..so I can work beyond 40 if needed. Semi-retired is great, there are options to work as a short term contractor in my job.

Given all these varied scenarios, my head is spinning trying to do my FI planning & invest my savings. Any help is greatly appreciated.





« Last Edit: September 13, 2019, 05:37:01 AM by FamilyGuy »

ctuser1

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Re: Visa worker need investment advice - Middle man problem
« Reply #1 on: September 12, 2019, 12:58:11 PM »
You should probably also want to post this in the bogleheads. They have more people with international investment expertise.

You need to go through this:
https://www.irs.gov/pub/irs-trty/india.pdf

401k would be considered a pension. So were you to leave, you would pay taxes on that in India only.

That does not mean IRS won’t like you to file a tax return. You probably have to learn how to do your IRS return as a non-resident. This is an annoyance, but probably not a dealbreaker in the large scale of things. Perhaps you can pay a cpa the first time, and then do it yourself next year onwards.


In my opinion, you should invest as if you plan to stay in the US. If that changes, then your 401k would be covered by the pension clause of the tax treaty I posted. All other non-retirement assets you can move immediately.
« Last Edit: September 12, 2019, 01:00:46 PM by ctuser1 »

ctuser1

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Re: Need investment advice - Middle man problem
« Reply #2 on: September 12, 2019, 01:15:33 PM »
The much bigger $$ issue that is probably not in your radar is NOT your investment/401k/HSA etc.

It is Social Security.

If you are a visa worker, you are contributing FICA taxes. The fact that you have 41k in 401k indicates you have probably contributed FICA for 4-5 years already. If you do contribute a total of 10 years then you become eligible for Social Security when you turn 62(or 65, or later).

If, however, you were to contribute, while in visa, till - let's say - you are 60, and then leave and become a "non resident" for SSA purposes, then you get Zero.

That is a lot of money to leave on the table!!

At your income, the NPV of that lost money could easily work out to north of $500k+. So I think your bigger problem would be the "lost" SS money (and any medicare coverage) than any other details about 401k etc.


FamilyGuy

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Re: Visa worker need investment advice - Middle man problem
« Reply #3 on: September 13, 2019, 05:33:57 AM »
You should probably also want to post this in the bogleheads. They have more people with international investment expertise.

You need to go through this:
https://www.irs.gov/pub/irs-trty/india.pdf

401k would be considered a pension. So were you to leave, you would pay taxes on that in India only.

That does not mean IRS won’t like you to file a tax return. You probably have to learn how to do your IRS return as a non-resident. This is an annoyance, but probably not a dealbreaker in the large scale of things. Perhaps you can pay a cpa the first time, and then do it yourself next year onwards.


In my opinion, you should invest as if you plan to stay in the US. If that changes, then your 401k would be covered by the pension clause of the tax treaty I posted. All other non-retirement assets you can move immediately.
Thank you. I will also get the feedback from Bogle

FamilyGuy

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Re: Need investment advice - Middle man problem
« Reply #4 on: September 13, 2019, 05:34:51 AM »
The much bigger $$ issue that is probably not in your radar is NOT your investment/401k/HSA etc.

It is Social Security.

If you are a visa worker, you are contributing FICA taxes. The fact that you have 41k in 401k indicates you have probably contributed FICA for 4-5 years already. If you do contribute a total of 10 years then you become eligible for Social Security when you turn 62(or 65, or later).

If, however, you were to contribute, while in visa, till - let's say - you are 60, and then leave and become a "non resident" for SSA purposes, then you get Zero.

That is a lot of money to leave on the table!!

At your income, the NPV of that lost money could easily work out to north of $500k+. So I think your bigger problem would be the "lost" SS money (and any medicare coverage) than any other details about 401k etc.
Ok, my head spinning faster now. Worried how much money I'm going to lose being a visa worker

ctuser1

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Re: Need investment advice for a man at crossroads
« Reply #5 on: September 16, 2019, 05:26:08 AM »
Are the kids born in the US? If so, you can get GC through them once one of them turns 21 (in another 17 years or so).
... You won't be able to RE till then, however, as you need to work to maintain your visa status!!
... That is probably the worst case scenario for you if GC delays for Indians persist. The other option being saving up 500k/1M and doing the investor visa!!

If you do become a US citizen, then you can get SS benefits even if you are an expat living overseas.
You won't get medicare while overseas even if you are a citizen.

Don't get me wrong. I am staring at a 25% cut in my benefits by the time I turn 65. Visa holders paying hundreds of thousands of $$ each into the system and then not claiming it is a huge gift to me and others like me.
I just don't think that is a fair way to run things!

FamilyGuy

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Re: Need investment advice for a man at crossroads
« Reply #6 on: September 17, 2019, 11:52:34 AM »
Are the kids born in the US? If so, you can get GC through them once one of them turns 21 (in another 17 years or so).
... You won't be able to RE till then, however, as you need to work to maintain your visa status!!
... That is probably the worst case scenario for you if GC delays for Indians persist. The other option being saving up 500k/1M and doing the investor visa!!

If you do become a US citizen, then you can get SS benefits even if you are an expat living overseas.
You won't get medicare while overseas even if you are a citizen.

Don't get me wrong. I am staring at a 25% cut in my benefits by the time I turn 65. Visa holders paying hundreds of thousands of $$ each into the system and then not claiming it is a huge gift to me and others like me.
I just don't think that is a fair way to run things!
Yes kids are citizens so the worst case is when they 21 (right now their age is 4 :) ), I can have it. I think I'm going to start investing as if I will be US and if things happen differently, hopefully I won't be in very bad shape.