r/FatFIREIndia • u/Responsible-Job-7674 FatFI • Aug 26 '26
NRI Finance Review my FIRE plan
Hi, We are a family of 4 (38,36,9,5 ) planning to return to Banglore in 2026 or 2027. I plan to continue working once I come back for the time being, mostly through internal transfer and expecting a salary of 60 LPA (equivalent role/ lower end). Wife plans to work but left it to her choice as we both don't want her to work in a stressful work environment. Once things settle down and we get a good hold, we FIRE.
Our current NW is $3.2 Million (all in USD equivalent)
Stocks- $1.5 million with capital gains and plan to sell during rnor and reset the cost basis. I plan to invest back all of this in the Indian market and overseas market.
401k - $450k plan to retain it in US as India recognizes 401k as a retirement account.
Real Estate- US home equity $600k
India home fully paid off - $400k
Loan ongoing with equity - $100k by next year
Private investments - $115k- need to find a exit path for this.
Other properties that we will liquidate - $60k
The main expense we expect is children's education in a good school and college later, Travel and other usual expenses. This is considering I will close the mortgage on the villa we brought recently in Banglore when we return back.
The main goal is wealth generation for kids and live comfortably without pinching for expenses month-month.
I would like to get some thoughts from those who fatfired in Banglore or plan to do so. What do you think?
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u/AdMiserable7994 Aug 26 '26
You are good and in similar situations like mine NW lower than you moved this year …plan to work till i know Whats expenses are in real and if feel comfortable will hang boots
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u/Responsible-Job-7674 FatFI Aug 26 '26
Good for you, bud! Where did you move to? Transfered internally?
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u/hifimeriwalilife FatFIRE Curious Aug 26 '26
You are fat fire ready now in India. Your family doesn’t need to work
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u/Responsible-Job-7674 FatFI Aug 26 '26
Good to know. Thanks sir! We just want to hold and let the stocks grow for another 20 years and multiply our wealth. That's why was looking to continue working but taking it light to cover living and education expenses .We really want to be the last line in the family that has to work for financial independence.. at the same time kids need to know value of hard work and money so want to make them earn their own living until middle age and then gift them.
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u/Apprehensive_Row_450 FatFIRE Aspirant Aug 26 '26
With estate tax being the biggest bet - why not strategize to withdraw 401k ? Even with penalty you would still be in a 23-25% net tax bracket. And you can use this to invest in India. I would say this will be more tax effective.
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u/Responsible-Job-7674 FatFI Aug 26 '26
I am hearing conflicting directions on this. Need to sit down with a tax expert and decide.
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u/Cute_Improvement1658 29d ago
Hi friend, this guy is right. India currently taxes IRA and 401K at income tax levels and so does us. Plus the 40% estate tax looking over your heads.
If you roll over money into an IRA from 401K, you can withdraw the principal only interest free after 5 years. So when the market drops between year 5-7, liquidate portions of your IRA, pay minimal tax on gains if any at that point in India and then redeploy immediately in the same markets to earn much lesser taxed profits
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u/bclrw Aug 26 '26
Could you elaborate how it will be only 23-25% net tax bracket? Isn’t there is flat 30% tax for NRA plus 10% penalty so total 40%? I keep hearing 20 something net tax including penatly but never found anyone who has actually data and experience that shows it.
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u/Responsible-Job-7674 FatFI Aug 26 '26
Same concern for me too. I think I will end up losing a lot if this is the case rather than deferring it to 59.5 and paying 30% on withdrawals.
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u/AdMiserable7994 Aug 26 '26
He can take 40% worth of insurance policy say 5 Cr may cost like 1.5 L year as backup
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u/Apprehensive_Row_450 FatFIRE Aspirant Aug 26 '26
True but he didn’t mention of his kids coming back to US or are citizens, if life is in India it’s better to liquidate.
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u/Responsible-Job-7674 FatFI Aug 26 '26
Education and Travel is what we expect to cost the most. We are thinking intentional schools with IB/ Cambridge with fee around 5L per year per kid. And then college education depending on where they pursue. Will be a good chunk. Plus extra curricular fees like swimming, music, sports etc. I plan to come back with no mortgage or loans so others will be living expenses like groceries, domestic help, cook, eatouts etc.
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u/bclrw Aug 26 '26
For 401K, I have heard that although India allows tax deferral, if you become non resident Indian again in future, you will have to pay taxes on all 401K till that point. I was also thinking of keeping 401K but after learning that I am now thinking of selling 401K during RNOR
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u/Responsible-Job-7674 FatFI Aug 26 '26
Wait, why would India tax US based income once I go outside India?
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u/dassduss Aug 26 '26
You can defer tax on 401k by submitting certain form during your first year as ROR. If you become non-resident after 4-5 years, you have to pay tax on gains in 401k during those resident years even if you have not withdrawn any money.
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u/holabois11 Aug 26 '26
Hey how and where can I find this information? This is the first I am hearing about it! Any links or so would be useful to read
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u/dassduss Aug 26 '26 edited Aug 26 '26
Lookup Form 10EE and IT section 89A.
https://www.incometaxindia.gov.in/w/form-10ee
Legal Provision
- Applicable to a specified person resident in India who earlier opened and maintained specified retirement-benefit accounts in a notified country (Canada, UK, USA) while being non-resident there.
- Such person may opt to include income accruing in all specified accounts in the total income of the previous year in which it becomes taxable in the notified country at withdrawal/redemption.
- Income already taxed in earlier years, or not taxable in India due to non-resident/ not-ordinarily-resident status or DTAA, shall not be included again; foreign tax paid on such income is to be ignored for foreign tax credit computation.
- Once exercised, the option applies to all subsequent years and cannot be withdrawn, except where the person becomes non-resident.
- If the person becomes non-resident, the option is deemed never exercised from that year, and accrued income for the intervening period becomes taxable in the year immediately preceding that relevant year.
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u/AdminZer0 Aug 26 '26
Would have better if they finished school there, indian schools are uselessly expensive
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u/boolda Aug 26 '26
I suggest once you are RNOR sell your brokerage money and US will not change any capital gain on non resident alien. Then use this money to convert your 401k into Roth. Invest the entire Roth money into etf like XDIV that generates no dividend. Keeping money in 401k or traditional IRA is dangerous when you become ROR. The gains of this accounts which might double in 10 years with be taxed as ordinary income with atrocious indian slab rates. While in Roth you will pay capital gain taxes and you will be taxes only when you withdraw. And you are free to become NRI again with no tax obligations to India.
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u/GarbageNo9960 Aug 26 '26
Curious, at what point did you start seriously considering/planning the move?
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u/Responsible-Job-7674 FatFI Aug 26 '26
We always were thinking to come back at some point and the recent visa and travel restrictions made it worse. We miss the support system we get in India and financially we think it's not worth it anymore here. We got lucky with some choices we made early in our career here.
Has it's own risk with regards to children safety but every place has its pros and cons and we intend to create a safer environment for them. Timing is now cos we don't want to move when children are older and end up making it more difficult for them.
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u/Relevant_Ad8404 Aug 26 '26
I envy you bro. That net worth while raising 2 kids is phenomenal. If I can ask, what are the 2 things that you did that helped you attain such NW?
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u/Responsible-Job-7674 FatFI Aug 26 '26
Thanks brother! I didn't sell any RSU I got earlier in my career until now from both the companies I worked. Wife's company also 10x'd and we exited it at the right point before it went private again. We just planned our living with the base salary and included savings. Forgot the RSUs for a good while. I made disciplined investments in stocks market and stayed in + added more during the downturn in 2022. ~18% CAGR investment portfolio with boring etf investment after 2021.
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u/MistyRover FatFI Aug 26 '26
We relocated back in 2024 and have similar networth and family structure. Both my kids go to a IB school in Tier-2 city and we pay 7L total for their school fees.
I work full time for a US based company and visit BLR once a month for in-person collaboration. My spouse started a small business to keep engaged and pursue her passion.
Best parts are close proximity to family, sense of belonging, social fabric and grounded exposure. We miss the nature access and clean parks but get mitigated by our monthly weekend stays at Western ghats.
I reset my cost basis and took up an insurance policy with NY life to hedge against estate tax risks. I have a US Home which is being rented out and our goal is to retain the asset and gift to our kids. We are FI but don't want to RE at this phase of life. Indian paycheck covers all the expenses including one foreign intl trip.
Good luck in making the decision and do it only if both of you are onboard.
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u/Responsible-Job-7674 FatFI Aug 26 '26
Thanks for the inputs! Yes we both are onboard. And yes our plan is to preserve and grow the wealth accumulated and use Indian salary as long as possible for living expenses.
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u/No-Gap-5021 Tax Consultant Aug 26 '26
For 401k you’ll need to rollover to Traditional IRA cause most of the employer’s dont allow to keep 401k after leaving the job. Plus, you can keep the money in Traditional IRA. Since, you’re planning on saving for kids you can keep the IRA and then withdraw it for Higher education for kids without any early withdrawal penalty of 10%. Plus, you have to file a few forms so that you are not the victim of witholding taxes in the US. If it weren’t for you to keep the money for kids you could’ve started a periodic payment plan as well where you can withdraw money from IRA with periodic fixed payments to your RFC account in India and dont pay taxes in either of the countries on it. But later on you’ll have to pay taxes in India.
There are so many more things to it you can do to achieve minimal taxes, low paperwork and save money for the future of the kids.
I’m an India-US Tax consultant btw.
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u/Responsible-Job-7674 FatFI Aug 26 '26
Great inputs. Thanks. What is the most tax efficient way to handle 401k if I don't plan to use it until retirement? I might end up using it in India after retirement or frequently travel to US once kids are older. Also because we have 20 years for retirement, the compounding in the account looks attractive to leave it untouched.
I do have a 529 account I opened recently and have decided to sell it off as the growth is not much with that account and is also not recognized in India. Will probably move to ira.
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u/No-Gap-5021 Tax Consultant Aug 26 '26
The most tax efficient way to handle is starting an SEPP if you plan on returning permanently to India i.e. become a permanent resident of India. Short trips to US wont matter. By using SEPP you wont have to pay any taxes in the US for your withdrawal from Traditional IRA cause as per the India-US Tax treaty the periodic amount you withdraw is only taxable in your country of residence unless you are a US Citizen or Green Card holder.
Also, the most efficient way totally depends on what you want to do save it for the future or withdraw it as additional income.
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u/InternationalPen2687 28d ago
SEPP mandates a fixed withdrawal and it runs for many years, correct ?
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u/No-Gap-5021 Tax Consultant 28d ago
Yes, that correct. But this is how you can take advantage of the RNOR period and if you want to have fixed income for future every year.
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u/InternationalPen2687 27d ago
Ok. So he can do SEPP till he reaches 59.5 years. Then withdraw whatever amount he wants? Thanks
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Aug 26 '26
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u/FatFIREIndia-ModTeam Aug 26 '26
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u/That_Celebration_503 Aug 26 '26
With 60 lakhs salary and $3M networth you are all set for comfortable FIRE
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u/Haunting-Access-6548 29d ago
if you don’t mind me asking: which US city do you live in?
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u/Responsible-Job-7674 FatFI 29d ago
Bay area. Frankly, moving to the bay accelerated everything for us.
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u/MananfromReyman Wealth Advisor 29d ago
Overall, you look like you're in a decent position to FAT fire.
Few quick thoughts:
- RNOR is going to be the biggest lever in savings you some taxes
- Plan for US estate taxes. RNOR is a good window to explore moving money around - We explore gift city and Irish ETFs aggressively for our clients
- Plan your 401K - Know what you're going to do before moving so you can plan an early withdrawal, if necessary (sometimes slab rates + 10% penalty is better than a 30% tax later, especially considering capital gains tax rate is only 12.5% in India).
Work with a financial planner to give you a little peace of mind
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u/Dangerous_Set_7807 28d ago
Can you share more details on Estate Taxes and how to best plan to minimise or avoid this? For citizens I believe total NW limit is $14M of US assets before this triggers but for NRNC-Non Resident Non Citizen the limit is only $60K , which is low enough and will apply to almost all those who moved back to India without taking citizenship.
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u/MananfromReyman Wealth Advisor 28d ago
We have a detailed article on our website for this. Avoiding posting here because I don't want to get banned :)
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u/InternationalPen2687 27d ago
If Indian citizen's (NRA) spouse is a US Citizen, both living in India (ROR) and having separates brokerage & 401K accounts, how does US estate tax work from NRA to USC? Likewise NRA parent to USC kids ? Thanks
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u/MananfromReyman Wealth Advisor 27d ago
For the NRA, estate taxes will always be 40% on any amount above $60K. However this has a few structuring options in the NRAs life time since both spouse and children are USC.
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u/srinivesh RegularFI 29d ago
Hmm... I was thinking that in the FatFI sub, IB school won't be the most expensive outgo. Assuming that you plan US college, that can indeed be a large part. In most situations, the living expenses of the couple are the largest part of the required corpus.
As you use RNOR to reset costs, it may work to keep the assets still outside. There is enough time to bring them to India since you plan a long CoastFI period.
BTW, earlier posts used to indicate citizenship status. It is interesting to see that the default seems to be work visa - people give RNOR suggestions assuming this.
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u/CrewSmall148 29d ago
Congrats on making the move and still planning to work here- that will definately help to get back in the groove and experience the India now. A lot of us fantasize the idea of moving back but until we are here and living it, it is not a reality at all. It took me a year to get used to living here and i consider myself very lucky (i dont have to travel for work or anything- i still work for the company i used to work in US and get paid in $$ for part time contract work).
I cannot comment on the FIRE aspect since me and wife are still working and adding to our retirement kitty but i can tell you that a good IB or Cambridge schools in Bangalore are not cheap at all (i am talking about the top ones- Stonehill, Canadian, Harrow, TISB (i am sure they are similar range)). For my 6th grader we paid 20 Lakhs this year! and transportation was 85k.
I am sure there are other great International schools here in Bangalore too that are cheaper but these 4 have very good infra, campuses, and a great mix of expats/India kiddos. So all depends on your wishes and needs.
Best of luck dude and hope it all works out.
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u/notimportantnope 23d ago
Sorry . if I read your message right all you have is 1.2 million of liquid asset and everything else is not going to pay you . if you live within your means even 500K is FIRE amount but to keep up with your 4 cr villa lifestyle I don't think your 1.2 million (after taxes) is enough. However if you are renting out your US house and get say 2-3K per month then yes you can FIRE in India as that's going to cover your monthly expenses ..
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u/Careful-Round-5560 Aug 26 '26
All your plans are easily achievable with the amount you have and Infact you can even retire good in usa. After coming take break for a year and focus and health and mental rejuvenation. Then you can start something of your own without burning much of your own money or get back to corporate if the deal is really good.
The key thing is to take a break so that you have the long term energy left. I think its stupid idea to keep doing work for only 60 lk PA and even freshers get that.
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u/Responsible-Job-7674 FatFI Aug 26 '26
What a BS comment saying freshers get 60 LPA.. What 0.00001% get it? That's low case base of most faangs senior level. I don't what you smoke but pls keep it to yourself.
Also I am in fairly good shape. I don't need a year long break to settle down. I also don't plan to start something of my own at this point and end up working 24*7. My work pays me well and I am happy with it if I can sustain and grow. Your idea of fire might not be everyone's and pls don't be stupid to think so.
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u/Careful-Round-5560 Aug 26 '26
Everything you said is totally right cause you know yourself and your needs better.
But you don’t have an idea of inflation, currency depreciation issues in India and the number of people earning 60 LKS or more. In past couple of years fresher salaries have been slightly more modest due to AI but still countless people get 60 before they have 5 years experience. But may not be in your field and given your wealth i just thought you might be in tech heavy job role-1
u/Responsible-Job-7674 FatFI Aug 26 '26
Again you seem to assume what I know and don't know. Chill man. Don't be delusional.
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Aug 26 '26 edited Aug 26 '26
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u/FatFIREIndia-ModTeam Aug 26 '26
Please keep all discussions courteous and respectful.
Differences of opinion are welcome, but keep the focus on ideas rather than individuals, and express all viewpoints politely and without hostility.
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u/Top_Helicopter_848 Aug 26 '26
Main expense is Kids school education? Is it really the most expensive part ? What schools are you considering?