Can I do this? Keep putting money into my 401k as usual. I plan to move back to my home country permanently say in 10 years. So the year I'm planning to move back, I move back early January and I break my 401k. Since I have 0 income that year, I will be taxed at 0% on 401k and I'll just pay the 10% penalty?
So is it just better to go with Roth IRA if the plan is to withdraw the money before retirement?
I think you’ll be taxed on the gains but potentially not on your initial investment. I’d check with a CPA though
What? If you would be taxed on the gains then there's no point. The money you put into a Roth IRA is already post tax. You don't get taxed on gains for a Roth IRA.
Yes.
Or just put in required amount to get full match, if your company have one.
This is a complicated question, it depends on lots of things like tax rates at that time. Ask your companies 401k team for advice or a cert fin planner.
https://www.madfientist.com/how-to-access-retirement-funds-early/
Wow this seems awesome! Thanks!
Curious to understand, do we really need to wait till we leave the company to transfer funds from 401K account to Traditional IRA?
Thanks everyone for the quick replies!
Sepp option is best, zero penalty and zero tax
1. Your 401k money is considered income for that year. 2. You will be taxed globally. So, unless you have minuscule amount in 401k and you really do not earn money after going back, it is not 0 tax.