Would it make sense to keep investing in 401k if you moving out of the US in a year?

Commvault jdn8d2b
Mar 25, 2018 10 Comments

The question says it all. But to clarify, I mean would it be sensible to keep investing for another year till the time I move out of the country? Does the account stay active even after I leave, for me to cash out during my retirement?

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TOP 10 Comments
  • LinkedIn xfitxk
    The question is not about whether you'll move to another country, but whether you'll NEED the money before you reach 60 years age. If yes (i.e. you'll need to withdraw before reaching 60), I would only contribute to get the matching dollar and nothing more.
    Mar 25, 2018 1
    • Commvault jdn8d2b
      OP
      Makes sense
      Mar 25, 2018
  • Microsoft / Eng Harmar
    You should absolutely contribute to max out your company match. Whether you contribute more and/or keep the account after you leave is a separate matter.
    Mar 25, 2018 2
    • Commvault jdn8d2b
      OP
      So I can keep contributing even after I leave? Ofcourse I will not have the company match then. But just asking
      Mar 25, 2018
    • Microsoft / Eng Harmar
      No, but you can contribute more than your company will match while you are there.
      Mar 25, 2018
  • Microsoft hoodi
    Letting money grow tax free is a tremendous benefit - you'll pay $10 - 20 per year in fees after you leave, but let it sit until you're 60 and start taking distributions wired to your local bank. Not even counting match, if you put it in low cost index funds for 30 years and let it grow, you'll 10x the original amount you would have gotten after tax (assuming 30% effective tax rate and historical returns of 7%).
    Mar 25, 2018 1
    • Commvault jdn8d2b
      OP
      I agree 401k is an opportunity not to be missed out on. I was concerned about access to those funds when I move out of the country.
      Mar 25, 2018
  • Microsoft va1234
    Would you be paying state tax apart from federal tax if you leave US ?
    Mar 25, 2018 1
    • Commvault jdn8d2b
      OP
      I guess not, but what’s your analysis in either case? Curious
      Mar 25, 2018
  • Amazon Rgfgsfx
    Yes
    Mar 25, 2018 0