US & India saving approach

[julienmarin]

@meme2206 I have an online only saving account and they have both my email / mobile number.. I haven't had issues so far. I use this account for storing my emergency funds and get a decent interest rate (1.45%) by US standards..

Please check out
https://www.thesimpledollar.com/free-checking-account/
https://www.thesimpledollar.com/best-high-interest-savings-accounts/

 

[julienmarin]

@furiouscat4323 This is my thought process too.

 

[corruptedsoul]

@julienmarin I prefer a Roth 401(k) over a traditional in these cases where I'd need the money early - the penalty on early withdrawals is only on the earnings part for Roth 401(k), whereas for traditional 401(k) it's 10% on the entire amount. See if your employer offers a Roth 401k. Of course, you should definitely contribute enough to get the max match from your employer.

I don't like Roth IRA if you're withdrawing early. You still pay tax on your earnings after 5 years so there's literally no point.

VTSAX is indeed spectacular, so you can dump extra money there.

Since your US investments are not for very long duration, it dramatically increases the risk since markets may fall just before you want to move back to India. So either start moving funds to Vanguard money market fund well before you need to leave, or get an options account with Robinhood or Tastyworks and hedge with put options. (You need to learn options well before doing this though).

The biggest thing you're doing wrong now is leaving money on the table by not maxing your employer match.

 

[julienmarin]

@corruptedsoul Thank you for your valuable input. My employer offers both Roth & traditional 401(k). I went with traditional as its saves on month on month tax. Hearing to everyone's input; I increased it to 4%.

I will open an IRA account as next step. I found being asked to print and mail to Vanguard. I need to look bit more into it.

 

[julienmarin]

@corruptedsoul Hi,

When I try to register for an Vanguard account. I get below message .

https://imgur.com/a/mK7II

I'm fine with printing and mailing it. However; I'm not sure about the signature guarantee from bank officer. Is this expected? Will my Bank be OK to do this ?

 

[corruptedsoul]

@julienmarin I'm not sure. We were able to open account online without needing any manual steps.

 

[julienmarin]

@corruptedsoul Ok, i had 401k with Fidelity and was able to open IRA as well.