Author Topic: 401K cash out for non citizens?  (Read 1541 times)

haschen

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401K cash out for non citizens?
« on: November 18, 2016, 06:40:04 AM »
HI Everyone,

I'm on the working visa in US, and currently maxing out my 401k, with companies match.
My 401K account been growing really fast, but I'm wondering, if it is worth doing this?
I'm not planning to retire in US.

When I've moved to US, I was told that I would be able to cash out my 401k, in case I leave the company and the country.
But I'm not sure how this would be taxed?
Does it make sense to keep maxing out 401k, or put some of these extra money to my normal taxable investing account.
Thanks

seattlecyclone

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Re: 401K cash out for non citizens?
« Reply #1 on: November 18, 2016, 10:02:25 AM »
If you cash it out while you're still in the US, you'll likely be taxed on the entire amount as income that year plus a 10% early withdrawal tax if applicable. If you cash it out after you leave, it really depends on the tax treaty between the US and your country of residence.

MustacheAndaHalf

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Re: 401K cash out for non citizens?
« Reply #2 on: November 18, 2016, 08:37:15 PM »
What is your companies policy on 401(k) matching?  Most companies do something like "match half up to 6%". At most companies it would not make sense to contribute the maximum to your 401(k) in your situation.

I think the Roth 401(k) is better in your situation, up to the point of the match.  With a Roth 401(k), only the growth is penalized - not your original contribution.

haschen

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Re: 401K cash out for non citizens?
« Reply #3 on: November 18, 2016, 09:48:21 PM »
Thanks for the idea. I think im getting much more then 3%,  but i will double check the calculations. I will also read more about Roth. I've signed up for the plan after being on the plane for 36 hours, when we've moved to us. Im not sure ive made right decisions.
Thanks for the tips

CanuckExpat

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Re: 401K cash out for non citizens?
« Reply #4 on: November 21, 2016, 10:02:36 PM »
My 401K account been growing really fast, but I'm wondering, if it is worth doing this?
I'm not planning to retire in US.

What's your age, how long have you been in the US, how long do you plan on staying in the US?
I ask not for financial reasons, but because you should also evaluate how much your personal situation could change.

Plans change :)

haschen

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Re: 401K cash out for non citizens?
« Reply #5 on: November 22, 2016, 10:22:36 AM »
 im 31 yo, and been in US for almost 2 years.
Ive managed to get almost 80k in 401k since we've moved here.
I think it will be growing even faster in the future.
But i need to know when i would be able to use this money.

Im not sure how long we will stay here, but i would say another 5 years at least. May be even more if my hubby get good job here too.

I've requested more information about other pension plans in my company.
Will see what else i can do)
Thanks

Goldielocks

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Re: 401K cash out for non citizens?
« Reply #6 on: November 24, 2016, 04:37:12 PM »
When you leave the company, you ask for a rollover to a Traditional IRA.   There are some other considerations if you are close to normal retirement age, but let's say that you will be well under age 50.

What country would you go to?   
Traditional IRA's have some advantages in terms of your control, and Canada at least, has tax provisions to move the funds into Canada on a tax advanted basis, but the 401k's are not as clearly cut.