[viki_79]

Hi ;

I am from India and have been residing in Us for a year now. I was not so sure about my investments last year and people suggested not to invest in 401 K if I am not planning to stay in US permanently. I didn't and found that for 2006 my taxes were really high and decided to invest in an IRA traditional account for 2006.

Now I have opened a 401 K for 2007 am worried already as to the amount going in . I have invested 10% of my gross into my 401 K and of the first 6 % my company pays 50 % of that . So it's a pretty strong investment plan.

My worry is If I do to go back to india in the next 4 to 5 years I

1. how can I estimate the growth on my 401 K.
2. Find out the Tax I need to pay on it.
3. 10 % penalty fee is it mandatory.
4. Any other liabilities.
5. Is this all worth.
6. Any other investment options available.

Should I consider investing a smaller amount so that I do not loose out high on taxes later rather than losing it out now at least when I get to have the money now.

Thanks for the assistance.

[jaynen76]

A retirement plan is definitely worth it. I personally, think you should have went the ROTH route on both plans. I would actually convert now, unless of course you're over the AGI limits. I don't think the ROTH 401k has AGI limits though, so you might be able to do that. Depending on how your fund is performing I would also go with an administrator that offers "self-directed" plans, by that I mean the ones with pretty much no restrictions except for prohibited transactions. I wouldn't worry about leaving to India, you can always get your money out, whenever you want without penalty.

I know there are going to be people who read this who think that's hog-wash, but it is very true, you just have to know what you're doing and get very creative with your methods.

[AtlantaTaxExpert]

There ARE AGI limits on the Roth IRAs. However, they probably do not apply to the new Roth 401Ks.

I agree that you should keep the retirement plan. When you return to India, you can roll the plans over into a rollover IRA, then manage the IRA from India via telephone and email. The Internet makes it all possible.