Author Topic: Should I opt out of 401k?  (Read 2286 times)


  • 5 O'Clock Shadow
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Should I opt out of 401k?
« on: July 31, 2013, 07:03:02 PM »
Hi all, I am looking for some advice. I have recently moved to the US and am here on a work visa. There is no telling how long I will be in the US, I am pretty sure for 2 years at least (my visa is for 5 years to start with), but anything beyond that, I have no idea whatsoever. I don't know whether my employer would sponsor me for a greencard eventually or if I would even want to stay here. Hence, I am wondering whether it would make sense for me to contribute to a 401k plan at all. I realize I would forego the employer match, but if I end up withdrawing it early, then I will have to pay the penalty and from the research I did, there would be additional tax consequences depending on where in the world I would be at that point (which I have no idea where that would be either, I don't really have a "home country" so to speak, I have moved around a lot). I am very good at saving on my own, I have around 300k saved after having worked for 4 years and I should be able to save 100k per year going forward. 

I am also quite adverse to creating too much of a mess with my finances by having accounts all over the world, and I have a feeling that if I end up leaving the US again, having this 401k plan could turn into quite a hassle and I am just not sure whether it would be worth it. Has anyone been in my situation? Any advice would be greatly appreciated!


  • Handlebar Stache
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Re: Should I opt out of 401k?
« Reply #1 on: August 01, 2013, 12:51:56 PM »
Good on your stash and your ability to save!  $100k per year.

Does your home country permit retirement accounts that can be tax sheltered?  If so, I would investigate whether you could roll over any 401k money to that account.  If that is not an option, is it so bad to have your money (that instantly increased by your employer's match) working tax free in the US?  Besides, it reduces your taxes.  IMO, refusing a gift of money from a 401k match is not rational so I would do the 401k and figure out the rest later.  It is a good mess to have.