If you are a victim of retrogression stop putting money in 401k ASAP

[satishgc]

This what this country does to people that come here legally work legally and pay taxes regularly and they are very lenient on people that cross borders and stay illegally here.I have begun to start my bags and trying to find a job in bangalore or bombay.
I will lose my money in social security and 401k,i know these people will take ages to give my money back or they will never give.My advice to people that are on h1b is do not put your money in 401 and Social security is inevitable.I am not the only one most of my friends have started to pack bags as it makes no sense to stay here and work as a bonded labourer anymore.

 

[talkative]

401K: Keep contributing. When you quit, roll it into an Roth IRA before you leave US. After 5 years, the money in the IRA is yours to spend. Corollary - if you move to a low paying job, do so early in the year, so the tax rate on your 401k to IRA will be beneficial.

Social Security: You have no choice. Everybody must contribute.

~T

 

[pvr726]

Surprised to see financial planning advice

I can understand retrogression causing anger and frustration, but giving personal financial advise is not what I look for in these forums. Now that I see it, can't resist giving my own

401k is your money and you can withdraw a portion of it in every calendar year starting from the one after you leave US, so that it becomes the only income in that year ... by doing so, you will ofcourse pay 10% penalty for early withdrawl but that would be substantially less than any federal taxes saved while contributing the principal, and if you are wise and lucky it would have appreciated a little bit in the mean time too..

-Ram

 

[chicago_blues]

Dear TALKATIVE:

Could you recommend me a link or a document that would describe the details of rolling your 401k into an IRA and then leaving the country, and the benefits of waiting for 5 years then cashing out the money?

Thank you!

401K: Keep contributing. When you quit, roll it into an Roth IRA before you leave US. After 5 years, the money in the IRA is yours to spend. Corollary - if you move to a low paying job, do so early in the year, so the tax rate on your 401k to IRA will be beneficial.

Social Security: You have no choice. Everybody must contribute.

~T

 

[talkative]

chicago_blues -- search this forum for 401k. there's a long thread where this strategy appears. also, google around and you'll see that each part of the strategy is individually viable. can the whole thing work? how does PR/citizenship affect this strategy? for both these questions, i don't know..

Dear TALKATIVE:

Could you recommend me a link or a document that would describe the details of rolling your 401k into an IRA and then leaving the country, and the benefits of waiting for 5 years then cashing out the money?

Thank you!

 

[sureva]

401 Rollover to Indian PF

I was told that if we rollover to a tax deferred scheme in India, then we don't need to pay addiitonal 10% income tax as penalty. But the questions:

1. Is PF a tax deferred scheme.
2. Is there any other tax deferred scheme in India that is accepted by 401k scheme.

Pl. suggest.

 

[WorryForGC]

you will end up paying taxes in India, surely more than 10% penalty

I was told that if we rollover to a tax deferred scheme in India, then we don't need to pay addiitonal 10% income tax as penalty. But the questions:

1. Is PF a tax deferred scheme.
2. Is there any other tax deferred scheme in India that is accepted by 401k scheme.

Pl. suggest.

 

[aaloo_prasad]

don't you need money when you get old????
even if you go back to your conuntry?? It's your money, you own it, US government doesn't. There are only tax issues which I don't know how it works. But you will get money from 401k anywhere in the world

 

[PV4466]

LifeTime annuity is another option I am considering seriously. 401K doesn't look like a bad option even for H1-Bs. Social security does but we don't have a choice.

chicago_blues -- search this forum for 401k. there's a long thread where this strategy appears. also, google around and you'll see that each part of the strategy is individually viable. can the whole thing work? how does PR/citizenship affect this strategy? for both these questions, i don't know..