401(K) - good or bad for H1B holder?!
Asked Apr 7, 2006, 11:12 AM
I am on H1B visa for last two years and most likely will leave US after I finish 4 more years. I would take my funds back from 401(K) when I leave US. I know that I would have to pay 10% penalty. Also, I know that the company which handles my 401(k) funds will deduct 20% for tax retention. And then IRS will count accual tax based on the amount I would withdraw.
I am paying 3% of my salary to 401(K) and my employer is matching the same amount.
My questions are:
1) How do I know the exact tax amount I would have to pay to IRS when I took all money out from 401(K)?
2) Is it advisable for people like me (who would leave US before they get retire) to stop putting money in 401 (K) ?
3) If I stop putting money in 401(K), I would pay more taxes now and my employer will not match any money. But if I continue putting money, and after 6 years, when I take money out, what if the tax I would pay would be much higher than what I could pay right now? If that's the case, I can stop putting money in 401(K) and enjoy that extra cash from my pay-check right now.
I hope I didn't make the question more complex than it should be.