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401K

The Home Depot / Product bleedoranj

Nov 30, 2020 20 Comments

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If one has plans of leaving the US in the next 10 years or so, does it make sense to invest in 401K? Also, how much penalty does one end up paying for withdrawing early?#investments #h1b

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TOP 20 Comments

Veeva .comboom

Make a systematic withdrawal as monthly pension less than 10 k per year and you pay only penalty and no tax .

Nov 30, 2020 5 5
- VMware skjdkwnzj
  
  @Veeva: tax may not be zero as standard deductions do not apply to non resident aliens
  
  Dec 1, 2020 0
- Rackspace clownGuy
  
  You have to pay tax in India after 2 years once you loose nri status
  
  Dec 1, 2020 1
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mpcollins
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mpcollins

If your employer matches the contribution then absolutely. It's free money. Even accounting for a 10% early withdrawal penalty you will make out well. Another item to consider is that you can pull $10k from a retirement account to buy your first home penalty free in the US.

Dec 1, 2020 1 1
- Microchip ಸಗಣಿ
  
  Interesting. Is the $10k without penalty is specific to employer? Never heard about it.
  
  Dec 2, 2020 0
Microchip ಸಗಣಿ

Yes. The thumb rule that I follow is invest atleast the amount required to get maximum free match from the employer. Most of the cases I have seen employers matching atleast 50% of employee’s contribution upto a certain % of base salary.

Dec 1, 2020 1 0
Credit Karma unlucky

Chance to invest in the US market! Just keep it as your retirement

Dec 1, 2020 1 0
Databricks / Eng xmgW20

Can't you keep it until 59?

Nov 30, 2020 0 3
- VMware skjdkwnzj
  
  Why no point? You’ll need to save for retirement anyway.
  
  Dec 1, 2020 0
- Databricks / Eng xmgW20
  
  If you don't plan to keep this money inside 401k until 59, then there's no point putting it there in the first place. You're paying tax+penalty for early withdrawal instead of only tax when putting it into taxable account.
  
  Dec 1, 2020 0

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