I plan to leave for India in another 6-7 years. Currently I am enrolled in a company specific 401K plan. Will I get taxed in both India and the US upon withdrawal? What about early penalty since I'm leaving the country for good? At the time I expect to become a US citizen (Currently H1B holder with Green Card applied for). Any help will be appreciated.
Also, can I use a (no-penalty) loan from 401K towards my first home purchase when the property is in India?
Links supporting answers would be ideal but not necessary.
2006-08-29 09:48:43 · 6 answers · asked by MajorDude86 1 in Business & Finance ➔ Personal Finance
You do not have to take out your money from 401k. Let it sit there. You can manage your account online and its legal to have your money sit in 401(k) while you move out of US.
When you retire, you will pay US taxes and then Indian government might want its share of tax. But there are laws to avoid double taxation. Since you will be paying taxes in US, you will not be paying taxes in India. Atleast not full tax rate.
Do not take out the money from 401k when you leave US. That will require you to pay US Taxes + US 10% Penalty. Plus the hassle of double taxation forms in India. While you are settling there, you do not want another paperwork in your table.
And yes, as Ethens pointed out above, you can roll it over to an IRA. which is a much better option.
My strong advice, do not take out money from your nest egg. Its going to hurt you 100% guaranteed.
No offense. I am from India too. But to be honest, no one goes back (with few exceptions). Its a moving target. You wait for green card, then you wait for citizenship. Then you wait until your kids finish high school and then wait until they graduate and then wait until they get married and get settled. And then after that you retire but why will you return when your kids are living here and you have grand children.
As I said I have seen exceptions. But in most cases, no one returns. I am from India I love that country. But I also love the freedom and quality of life I get here in United States.
2006-08-29 09:53:12 · answer #1 · answered by NapWala 2 · 2⤊ 0⤋
I have lived in China for five yars. My 401K is still in place. I actually move money around via the computer. Since I have been here, I can see business trends and can make adjustments accordingly, making more money in International Equity.
2006-09-05 19:40:41 · answer #2 · answered by Calvin of China, PhD 6 · 0⤊ 0⤋
That's interesting
2016-07-27 11:49:23 · answer #3 · answered by Anonymous · 0⤊ 0⤋
If you do not plan to withdraw the money, roll it over to a IRA.
2006-08-29 09:51:40 · answer #4 · answered by Ethan 2 · 0⤊ 0⤋
why are all the answers so dull and short these days?
2016-08-23 05:39:56 · answer #5 · answered by ? 4 · 0⤊ 0⤋
well put NAP-WALA
2006-09-05 19:34:21 · answer #6 · answered by aldo 6 · 0⤊ 0⤋