I am working on an H1B visa. What happens to my 401K if I am terminated and have to leave the country to go back to my home country FOR GOOD.Can I take the money I invested in my 401K with me?If Yes, what % of taxes will be cut from that money in the 401K?Will I forefit the money that my company invested in my 401K?Any input is greatly appreciated.Thanks
Even for foreign nationals, the 401k is a sweet deal.Yes, you can take your money with you, less 20% withholding which will be credited toward your tax return. You would also have to pay a 10% penalty with your tax filing. However, you could roll to an IRA and possibly have access in your home country. I would check with a firm in your home country first.All of your vested money is yours. 100% of your deferral, as well as any amount vested of your match or profit sharing contribution. Check your last statement to see your vested amount.
Even for foreign nationals, the 401k is a sweet deal.<<<<<<<<<<<That is true for US taxes - it might also be true for your home country too but you cannot be certain. The earlier response says you need to check with people there familiar with the tax issue there. Many jurisdictions have very different tax schemes for retirement plans and you might be surprised at what they may do (you may be subject to tax on them right now even if they are tax deferred in the US for instance). Of course, many other jurisdictions have a different view point about voluntary compliance with the administration of taxes so who knows what you'll ultimately be liable for.
We get to keep it!Just kidding! It's your money, and it always will be.I'm pretty sure that there is no law that says you must liquidated it or transfer it to your home country. Therefore you can simply keep it here in the US if you want. If there is not much money in it, roll it over to an IRA.Some governments have receipical tax agreements and may allow you to transfer it from the US to a similar system in your country, but that would probablly trigger a tax and possible a penalty on it.If you left it here, there should be no reason why you can't simply direct it remotely and then take distributions when you retire.You don't mention what country you are from, but this would allow you to keep some of your retirement nest-egg in US currency and in a different economy. I'd bet the tax consequences would be less too. Most countries have higher taxes that the US does.I'm a Yank working overseas with the opposite problem. I want to get my Aussie "Super" to the US IRA.Good luck.
I am Canadian and have been living and working in the US for a couple of years. I have just recently married an American, so my situation is a tad different from yours, by the sounds of it, but....I would recommend keeping your money in the 401K as until a date far further down the line when you need to make strategic decisions for your retirement. Let it grow, (consider it an investment "diversity" strategy *grins*), and then wait and see what kind of withdrawal/transfer stratgey makes more sense in terms of fees and taxes.I have Canadian RRSP funds that I have left growing in Canada, and am now actively contributing to retirement accounts here in the States. My understanding has been that I might have more to gain by waiting that by moving everything around now.Cheers!Marla
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