If you are working on H1B Visa, how much do you contribute to your 401K given that there is always immigration uncertainty? Do you still max out ($19500)? #401k TC: 200K
On H1B for the last few years and have been maxing out 401k so that I get company matching contributions and save taxes. When the time comes to leave US I will leave the money here so that it grows here in dollar denomination. At worst case even if I decide to withdraw before retirement/59.5 age in small chunks , I will pay 10% penalty and some tax but that will still be considerably lower than losing on company contribution, growth and tax savings
Put in the max cap. It’s even better if you are leaving US. If you are leaving, you can withdraw at less than deductible cap which is around 20k+ a year for no tax. You just pay the 10% penalty which is a lot lower than current taxes.
DgoQ22, there is no deductible cap for non resident aliens. Personal exemption no longer available after tax reform.
If I am not mistaken, H1-B visa employees are considered resident aliens considering they pay FICA (and all other federal/state) taxes.
The match offsets that penalty even in the worst case.
Max out.
What about a 2% match?
Max out
Whats your asset allocation considering you are moving out in few years?
What is asset allocation by the way?
Percentage of Us stock, international stocks and bonds you hold.
Always max out given company has at least 25% match to account for loss during early withdrawal
Actually it might turn out to be good if you leave the country permanently. You can withdraw the 401k money in fixed installments without penaltyAndmay not pay tax in US. There is a little catch that you cannot stop taking payments. So yes do 401k at least equal to company match. Remaining is really a choice. I do Roth 401k instead
Do you lose the 401k if you leave US?
No, you just pay taxes when you withdraw it from the account.
Taxes and penalty