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Cool_Sparrow · 06-12-2008, 10:25 AM

Thank you all for your comments. I especially appreciate the detailed analysis posted by r2i on his blog. That analysis and others prompted me to re-think my plans a little and also, post an update for your comments.

1. Our retirement assets would probably be close to $650K when we actually begin retirement due to some vesting contributions expected when I leave my job. This may not change our calculations sizeably but the asset size increase is significant for us.

2. Using FIRECalc under its various settings and assumptions have given me a cause for concern that I should consider no more than about $1500/month of expenses to be fairly sure (>92%) of our assets lasting a 50+ year retirement. While this reduction is significant, I feel a modest but reasonable lifestyle can still be afforded by this income in a Tier 1 metro in India but for a really comfortable lifestyle, we should consider retiring to a Tier 2 or Tier 3 town. This will have an impact in terms of quality of health care and other lifestyle issues but if this town is located near a Tier 1 metro that has high quality care available for major illnesses, the impact should be marginal. Also, this reduced income has an impact on the type of schools that we hope to send our child to, so that is another factor that's worrying me. My wife points out that we both studied in rather modest schools and did pretty well in life, so the school itself is not a major predictor of a child's future success.

3. Anyway, to revert back to my $2K/month spending goal, one option is for me to not withdraw from my assets till I reach 40. The additional 3 years, supported by modest employment in India, would offer a better chance to start our retirement with $2K/month. Delaying till 45 will put us in a much better position according to FIRECalc, but the prospect of toiling for 8 years in a high pressure & relatively low wage country like India is a major concern to me. We are not counting on any savings from working in our retirment destination, but rather hope to earn enough to cover our living costs to let our retirment assets grow. With the faltering capital markets this year, the prospect of withdrawing from it from the end of this year is scary

4. Much was mentioned about health care costs. I found couple of decent India-based health insurance plans with annual premium of about $400-500 for a family of four (~$40 a month), which we can cover within our monthly budget. This insurance covers outpatient surgery, inpatient surgery and hospitalization, major dental work including in-home post-op nursing care (upto 30 days) with coverage limits around INR 0.3-0.4 million ($7,000-$10,000). Given current health care costs in India, this coverage is adequate in my opinion. What it does not cover are routine doctor's visits (which are inexpensive in India, as most fees are under $10/visit and rarely cost $20/visit). This insurance combined with the $10K we have earmarked for long-term health care related "investment" is what we are counting on. I am upset with the rising healthcare costs in India as well, it throws a curveball into anyone's long term plans.

5. Regarding our child's education fund, thanks to Mr. Market, the $100K fund has now dwindled to about $93K.

Using this as the base reduces the median long term projection by about 7% - does this mean we now don't have enough for a decent education? Maybe Harvard and Stanford are out? What about less expensive but good schools, does junior have to get a loan? I know many in this forum don't see any issue with that but since my wife and I both enjoyed the benefits of graduating debt-free, we wanted to offer this advantage to our child as well. Can college experts in this forum comment on the adequacy of our current college savings ($93K)?

06-12-2008, 10:25 AM	#13
Cool_Sparrow Dryer sheet wannabe Join Date: May 2008 Posts: 10	Thank you all for your comments. I especially appreciate the detailed analysis posted by r2i on his blog. That analysis and others prompted me to re-think my plans a little and also, post an update for your comments. 1. Our retirement assets would probably be close to $650K when we actually begin retirement due to some vesting contributions expected when I leave my job. This may not change our calculations sizeably but the asset size increase is significant for us. 2. Using FIRECalc under its various settings and assumptions have given me a cause for concern that I should consider no more than about $1500/month of expenses to be fairly sure (>92%) of our assets lasting a 50+ year retirement. While this reduction is significant, I feel a modest but reasonable lifestyle can still be afforded by this income in a Tier 1 metro in India but for a really comfortable lifestyle, we should consider retiring to a Tier 2 or Tier 3 town. This will have an impact in terms of quality of health care and other lifestyle issues but if this town is located near a Tier 1 metro that has high quality care available for major illnesses, the impact should be marginal. Also, this reduced income has an impact on the type of schools that we hope to send our child to, so that is another factor that's worrying me. My wife points out that we both studied in rather modest schools and did pretty well in life, so the school itself is not a major predictor of a child's future success. 3. Anyway, to revert back to my $2K/month spending goal, one option is for me to not withdraw from my assets till I reach 40. The additional 3 years, supported by modest employment in India, would offer a better chance to start our retirement with $2K/month. Delaying till 45 will put us in a much better position according to FIRECalc, but the prospect of toiling for 8 years in a high pressure & relatively low wage country like India is a major concern to me. We are not counting on any savings from working in our retirment destination, but rather hope to earn enough to cover our living costs to let our retirment assets grow. With the faltering capital markets this year, the prospect of withdrawing from it from the end of this year is scary 4. Much was mentioned about health care costs. I found couple of decent India-based health insurance plans with annual premium of about $400-500 for a family of four (~$40 a month), which we can cover within our monthly budget. This insurance covers outpatient surgery, inpatient surgery and hospitalization, major dental work including in-home post-op nursing care (upto 30 days) with coverage limits around INR 0.3-0.4 million ($7,000-$10,000). Given current health care costs in India, this coverage is adequate in my opinion. What it does not cover are routine doctor's visits (which are inexpensive in India, as most fees are under $10/visit and rarely cost $20/visit). This insurance combined with the $10K we have earmarked for long-term health care related "investment" is what we are counting on. I am upset with the rising healthcare costs in India as well, it throws a curveball into anyone's long term plans. 5. Regarding our child's education fund, thanks to Mr. Market, the $100K fund has now dwindled to about $93K. Using this as the base reduces the median long term projection by about 7% - does this mean we now don't have enough for a decent education? Maybe Harvard and Stanford are out? What about less expensive but good schools, does junior have to get a loan? I know many in this forum don't see any issue with that but since my wife and I both enjoyed the benefits of graduating debt-free, we wanted to offer this advantage to our child as well. Can college experts in this forum comment on the adequacy of our current college savings ($93K)? Last edited by Cool_Sparrow; 06-12-2008 at 10:31 AM.