I’ll start working in the US soon, mid-30s, and would like advice on 401k / Roth 401k / backdoor etc. I plan to leave the US in approx 10 years. What should I set up? Thank you TC 470
Max out on your 401k and forget about it. It’s that simple
Roth 401k if your company is matching some percentage
You will never leave
Not possible. People on H1B from India will not get green card by the time they retire. Once you lose job you lose H1B and need to leave.
There are other ways to stay back. The bigger intention here is the change of willingness to stay back than go back to home country. Where there is a will you will find a way. Planning for leaving is not the norm. Planning to stay is the way to proceed
Frankly you sound like how I sounded at 30. You will not leave!! This is me 14 years later after living in US for 19 years!!
Hi are you guys hiring?
o_O
I only have the traditional 401k with company match that I can withdraw after 59.5 My wife and I do want to retire in India (we are concerned of medical fees here 😂).
Do till company match. You can Roth convert every year after leaving under limit. It will be taxesld back home most likely but you can claim some via FTC. Read up on Roth convert / SEPP
Can you explain why converting to Roth would be desirable? I thought it would be better to not do Roth, pay no taxes now, and pay taxes later when I withdraw to the US and my country. I doubt I’ll be on a higher tax bracket then since I am on the highest now. I’d be thankful if you explain please
Roth means taxes are paid, so no penalty after 5 years. And since you are minimally converting to Roth, it's often below tax limits. This is called Roth conversion ladder. Your method has penalty unless you do SEPP which doesn't involve Roth, but is complicated but no penalties. I don't know much about SEPP except that the outcome is pretty similar.
Establish residency in zero state tax state before you leave
Why, what would this do?
Which state will you be living in? If California then contribute for sure. You can withdraw when you’re abroad and you will only have to pay federal tax and 10% penalty. So it will be the same as you don’t contribute now(federal tax +10% ca tax). The good side is if you end up staying here, you have 401k contributions/saving. If your employer matches then cherry on the top.
Thanks!
Don’t use any of those. Main issue is penalties for withdrawing early. Just put your savings in a brokerage account if you wanted to invest. No income tax savings and no company match, but it’s all yours to do as you wanted.
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