hi Blind, i see there has been some threads about the above previously, but could not find a clear answer: what are your strategies regarding *putting money in a 401k while temporarily in the US* (personally, i plan on going back to Europe at some point in the next few years)? i have been contributing to my 401k since my first paycheck a year ago for future early retirement, as the 10% penalty seems to offset the matching my company offers + tax-free of a retirement account. but i am wondering… should i plan ahead and start hiring a CPA/CFP?
If u use Roth 401, it will be more benefit because it’s already taxable income. Withdraw money after 1 year say 2020 if u move to Europe this year.
Google "401k roth conversion ladder".
Keep in mind the 10 percent penalty is on top of the normal income tax you pay on it you're probably better off to take it as normal income and invest outside the 401k.
You can do a series of delayed transfers that mitigate the tax penalties. It's intentionally complicated and it takes a few years, but if you are ready to retire with money outside the 401k then you can wait for the process to get the money out. Yeah, or just take the 10% hit. It sucks, but it's not the end of the world. Being retired early will make enough happy to offset the sad of the nonoptimal financial process because you'll be drunk.
Are there keywords to search for to learn more about these delayed transfers?