I am planning to shift India and and may be after 4-5 years after shifting I will be withdrawing my complete 401K ( I know ,I will be paying penalties as well) Will I be able to withdraw my 401K completely, Will my 401 investment platform will able to send me check to India? #personalfinance #investments
Yes. After moving, Every year with draw 20K for example rather than 100K after 5 years. Spread over years. Disclaimer- I am not financial guy. Not done yet. But this my understanding.
India will tax on global income including 401k to roth IRA conversion if you are an Indian tax resident.
how much are we talking about?
Once u leave ur job u will need to convert acc to ira. Its good that you plan to take after 5 years.in that way you can plan to open a roth ira and tranfer only what you plan to withdraw into that.in that way you will be penalized for what u withdraw from thrre. If for rest you decide to keep in ira until 60 then you can take that without penalty. In YouTube you will find proper stretegy to do this. Refer to same
You can convert into Roth IRA after leaving from US employment-if you have Roth 401k then convert into Roth IRA-You can always withdraw contributions from a Roth IRA with no penalty at any age.
You will have to pay tax while converting to Roth IRA (from regular 401k) and you can take only the contributions without penalties and not the earnings
This may be a better option if someone in Roth 401k and then easily convert into Roth IRA to withdraw the contributions without paying penalties. For earnings 10% penalties. Traditional 401k -there is no point to convert into Roth IRA if someone wants to withdraw immediately.
You have to pay tax in India on 401k withdrawal, even if it is just standard deduction once you are a tax resident. This is exactly why people recommend withdrawing foreign investments during RNOR status. https://indianfinancedictionary.com/glossary/nri/rnor-tax-status/
You can withdraw up to standard deduction and just be he penalty (10%) and no tax as you won’t have income in US after you moved to India. You still keep the US account open and linked and with 401k and withdraw electronically.
Thanks so much. But Can I withdraw whole amount at the same time?
You can buy why would you do that, this will trigger tax liability in USA, withdrawing only upto the standard deduction every year save you tax, rest is your choice