Hello,
I'm looking for advice on my contributions to a 401k. My fiancee and I plan to move to Canada sometime within the next 5 years or so, where we plan to stay. I'm 22, fresh out of college, and have a steady job with matching up to 4%. Initially, for my very first paycheck, I set it up to contribute just enough to get the full matching ($104 every 2 weeks, or about $2700 annually).
I'm considering seriously upping my contributions, but I'm concerned about the tax I'll have to pay to get that money to Canada. Will it still be worth it to raise my contributions if I later want to take the money across the border, or would it be better to invest elsewhere? When we move, will I be able to leave that money here in the U.S. in a 401k (or IRA, etc) to grow, and if so, what are the pros and cons of doing that? If I could leave the contributions in a 401k (or IRA, or Roth IRA, or whatever would be most beneficial) to grow until I'm 59.5, would that get rid of the penalty taxes, or would there be even more taxes/fees to get that money across the border to Canada?
Thanks for any help on this. I'm trying to save money in the best ways that I can, while being smart about what that will mean for taxes down the road.