Investment in 401K?

[bta11]

Hello everyone,

I have a question that pertains to many of us in our post-green card life who eventually in their life may want to return to their home country or may settle outside the US.

I wanted to know how many of such people invest in 401K. I know this is not a financial forum and I am not seeking information on what and how to invest in 401K.

The issue is that since 401K is of benefit to folks who will eventually retire here and there is a penalty if you withdraw early (in case you leave and settle outside the US), those who are unsure whether they will live here all their live, are they using 401K in their jobs?

A poll on this could shed useful light for all of us. Also, for those not investing through 401K, what other worthwhile channels are there for such people (of course baring the great stock market!)

thanks for your responses

 

[AmericanWannabe]

I don't think that you need to withdraw 401 K money prematurely
if you decide to leave teh states permanently. You can still
work in yoru hoime country until you retire at 65 and then
start to withdraw your 401K without penalties.

In additon, I wonder: if you receive 401K distributuion
outside the USA, do you still need to pay income taxes
to the IRS? At least you can get away from state income
taxes except Pennsylvania.

By the way, also take social security benefits into
account when you decide to leave or not. Do not
make 39 credits and leave.

I just got my annual SS benefits letter. It projects
that SSA will start to pay out more than receive
taxes in 2017 and the fund will be exhausted in 2040
based upon current trend.

 

[bta11]

thanks Amercanwannabe.

However, that only works assuming you have enough money to keep it away in 401K till the age of 65 for those who have left to live outside the US.

That is the primary issue. most people have would probably need to have their 401K money with them if they decide to leave the US. don't you think so?

others please respond. click on the poll please

 

[AmericanWannabe]

Your going back to your home country does not mean
you need to use yoru 401K to support living there.
Otherwise why do you want to go back anyway if you
can not support yourself by working?

By the way, if you do not have too much money
there and you have to do a early withdrawal, you can
withdraw each year $2000 or just below
the standard deduction amount for NR1040(*).
This way, you do not have to pay taxes at all.
SO that it can make up for some penalties

(*) I think if you abandon your GC, you only
need to file NR1040 and only report US income.

But now with 401K shrinking so fast in current market.
It soon will become a non-issue

 

[AmericanWannabe]

Your going back to your home country does not mean
you need to use yoru 401K to support living there.
Otherwise why do you want to go back anyway if you
can not support yourself by working?

By the way, if you do not have too much money
there and you have to do a early withdrawal, you can
withdraw each year $2000 or just below
the standard deduction amount for NR1040(*).
This way, you do not have to pay taxes at all.
SO that it can make up for some penalties

(*) I think if you abandon your GC, you only
need to file NR1040 and only report US income.

But now with 401K shrinking so fast in current market.
It soon will become a non-issue