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Subject:  Re: 401k withdrawals Date:  11/22/2000  3:41 PM
Author:  TMFPixy Number:  26282 of 90110

Greetings, AmritaSai, and welcome. You asked:

I am a Immigrant with work permit to work in the US. If I invest in 401K plan and after 5 years I decide to return back to my country, will i lose the money? How much will I be allowed to take back? What will be the difficulties?

Certainly it makes sense to contribute to that plan up to the point of receiving the maximum possible matching contribution from your employer.

When you leave the country, the money in the plan that you contributed plus all earnings will be yours. Employer contributions may depend on some kind of vesting schedule about which you may learn more from your plan administrator, but some if not all of those contributions will be yours as well. You will have to pay income taxes (plus an early withdrawal penalty if younger than age 59 1/2) on the money you take from that plan.

You would file a nonresident income tax return, pay the taxes, and keep what's left. What happens in your home country depends on the tax treaty in effect between the US and that country.


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