Immigration Voice - Forums
Register Get Involved Contact Lawmakers Advocacy Discussion Image Image Image Image

Go Back   Immigration Voice > General Information > Interesting Topics
Click to log in with Facebook
Interesting Topics This forum is to discuss any topic of interest to members and to gossip about anything that members prefer. All the terms of the forum and terms of use of the website do apply to this forum.

Reply
 
LinkBack Thread Tools Display Modes
  #1 (permalink)  
Old 06-15-2012, 09:03 PM
Senior Member
Priority Date
:
Feb-06
Category
:
EB3
I140 Mailed Date
:
Chargeability
:
India
Processing Stage
:
I-485
I485 Mailed Date
:
Compare
Join Date: Sep 2011
Posts: 145
njverifier has a reputation beyond repute njverifier has a reputation beyond repute njverifier has a reputation beyond repute njverifier has a reputation beyond repute njverifier has a reputation beyond repute njverifier has a reputation beyond repute njverifier has a reputation beyond repute njverifier has a reputation beyond repute njverifier has a reputation beyond repute njverifier has a reputation beyond repute njverifier has a reputation beyond repute
Default 401k Awareness

Another topic that I wanted to bring up on this forum was 401K. This is another one which lot of people give different answers but none knows how it works. I would like to invite people to participate and educate one another.

1. What is 401k?
2. What are the rules and regulations around it?
3. How you can withdraw money from 401k
4. What are the implications of withdrawal?
5. Why should you contribute to 401k?
6. Why you should not contribute to 401k?
Bookmark and Share Compare Reply With Quote


  #2 (permalink)  
Old 06-16-2012, 09:47 PM
Member
Priority Date
:
Apr-08
Category
:
EB2
I140 Mailed Date
:
Chargeability
:
India
Processing Stage
:
I-140
I485 Mailed Date
:
01/02/2012
Compare
Join Date: Nov 2007
Posts: 43
whiz is a splendid one to behold whiz is a splendid one to behold whiz is a splendid one to behold whiz is a splendid one to behold whiz is a splendid one to behold whiz is a splendid one to behold whiz is a splendid one to behold whiz is a splendid one to behold
Default

Quote:
Originally Posted by njverifier View Post
Another topic that I wanted to bring up on this forum was 401K. This is another one which lot of people give different answers but none knows how it works. I would like to invite people to participate and educate one another.

1. What is 401k?
2. What are the rules and regulations around it?
3. How you can withdraw money from 401k
4. What are the implications of withdrawal?
5. Why should you contribute to 401k?
6. Why you should not contribute to 401k?
I know this is offtopic here but here is my take.

If the employer matches your 401k contribution, you should contribute. In generally most employers match 3-6% of your base, which means you will be getting 3-6% more of your base salary. Plus its a good safety net. In general, even if you get sued or go bankrupt, this is the component which others don't get their hands on.


If your employer does not match, then it all depends on a lot of things including your age and tax bracket.
Bookmark and Share Compare Reply With Quote


  #3 (permalink)  
Old 06-18-2012, 12:24 PM
Junior Member
Priority Date
:
Jun-09
Category
:
EB2
I140 Mailed Date
:
03/06/2010
Chargeability
:
India
Processing Stage
:
I-140
I485 Mailed Date
:
Compare
Join Date: Jun 2010
Posts: 19
gopalkrishan has a reputation beyond repute gopalkrishan has a reputation beyond repute gopalkrishan has a reputation beyond repute gopalkrishan has a reputation beyond repute gopalkrishan has a reputation beyond repute gopalkrishan has a reputation beyond repute gopalkrishan has a reputation beyond repute gopalkrishan has a reputation beyond repute gopalkrishan has a reputation beyond repute gopalkrishan has a reputation beyond repute gopalkrishan has a reputation beyond repute
Default 401 K brief response

Quote:
Originally Posted by njverifier View Post
Another topic that I wanted to bring up on this forum was 401K. This is another one which lot of people give different answers but none knows how it works. I would like to invite people to participate and educate one another.

1. What is 401k?
This is a retirment account. You contribute money towards it out of paycheck and your employer may or may not contribute to your additions. The money you are contributing is deducted from your payroll before taxes, so there is a tax benefit also.

2. What are the rules and regulations around it?
I believe there are limitations to how much money PER YEAR you can contribute to your 410K account. I believe the limit is around $13000 or so for people filing tax return as single .. you can google and confirm this ..

3. How you can withdraw money from 401k
You are eligible for this money at age of 59.5 and if you withdraw before this then you are eligible for penalty becuase this money should have been taxed and is not. Some accounts allow you to take out loan against this account which you repay back (had interest whiuch you have to pay)

4. What are the implications of withdrawal?
5. Why should you contribute to 401k?
If you plan to stay in US contribute as it will give you supplemental income at retirement
6. Why you should not contribute to 401k?
If you are thinking of going back soon enough then don't You can still access money in this from India after you are 59.5 though
more details later..
__________________
I believe in balance or good and evil ..

How else could my 15 month old daughter be an Angel and the Devil at the same time .. *sigh*
Bookmark and Share Compare Reply With Quote


  #4 (permalink)  
Old 06-18-2012, 12:45 PM
Donor
Priority Date
:
Aug-08
Category
:
EB2
I140 Mailed Date
:
Chargeability
:
India
Processing Stage
:
I-485
I485 Mailed Date
:
12/30/2011
Compare
Join Date: Apr 2007
Posts: 1,765
thomachan72 has a reputation beyond repute thomachan72 has a reputation beyond repute thomachan72 has a reputation beyond repute thomachan72 has a reputation beyond repute thomachan72 has a reputation beyond repute thomachan72 has a reputation beyond repute thomachan72 has a reputation beyond repute thomachan72 has a reputation beyond repute thomachan72 has a reputation beyond repute thomachan72 has a reputation beyond repute thomachan72 has a reputation beyond repute
Default

withdrawing even after 59.5 from out of the US (by a non-immigrant who left US, for example from India) I believe will automatically trigger a minimum 30% cut? If the fund is withdrawn by a US person (citizen/PR/resident) then it is ok. I heard this somewhere and not sure about this.
__________________
Facebook | Google+ | Twitter | YouTube
Bookmark and Share Compare Reply With Quote


  #5 (permalink)  
Old 08-15-2013, 07:00 AM
Senior Member
Priority Date
:
Nov-05
Category
:
EB3
I140 Mailed Date
:
04/17/2006
Chargeability
:
India
Processing Stage
:
I-485
I485 Mailed Date
:
07/02/2007
Compare
Join Date: Aug 2009
Posts: 870
imh1b has a reputation beyond repute imh1b has a reputation beyond repute imh1b has a reputation beyond repute imh1b has a reputation beyond repute imh1b has a reputation beyond repute imh1b has a reputation beyond repute imh1b has a reputation beyond repute imh1b has a reputation beyond repute imh1b has a reputation beyond repute imh1b has a reputation beyond repute imh1b has a reputation beyond repute
Default

Quote:
Originally Posted by Angelina4! View Post
According to Wiki,
A 401(k) plan is the common name in the USA for the tax-qualified, defined-contribution pension account defined in subsection 401(k) of the Internal Revenue Taxation Code. Under the plan, retirement savings contributions are provided (and sometimes proportionately matched) by an employer, deducted from the employee's paycheck before taxation (therefore tax-deferred until withdrawn during retirement), and limited to a maximum annual contribution of $17,500 (as of 2013)..
Anyone please explain this phrase, because I didn't get the meaning.
Are you a spammer?

Anyone can understand it. Even a monkey knows what it is. Which country are you posting from?
Bookmark and Share Compare Reply With Quote


  #6 (permalink)  
Old 09-27-2013, 01:05 PM
Junior Member
Priority Date
:
Aug-05
Category
:
EB2
I140 Mailed Date
:
03/10/2006
Chargeability
:
India
Processing Stage
:
I-485
I485 Mailed Date
:
08/01/2007
Compare
Join Date: Aug 2006
Posts: 22
vaayu is a jewel in the rough vaayu is a jewel in the rough vaayu is a jewel in the rough vaayu is a jewel in the rough
Default Aggressive or Passive on 401k?

The question that I always have in mind is how many of us living in US are activley thinking abt retirement & 401k and how aggressively are they doign it. How much money is needed for you to retire is a big dynamic number and depends on who you're asking.,
Bookmark and Share Compare Reply With Quote


  #7 (permalink)  
Old 09-27-2013, 01:21 PM
Senior Member
Priority Date
:
Mar-08
Category
:
EB2
I140 Mailed Date
:
Chargeability
:
India
Processing Stage
:
I-485
I485 Mailed Date
:
01/06/2012
Compare
Join Date: Dec 2007
Posts: 886
krishmunn has a reputation beyond repute krishmunn has a reputation beyond repute krishmunn has a reputation beyond repute krishmunn has a reputation beyond repute krishmunn has a reputation beyond repute krishmunn has a reputation beyond repute krishmunn has a reputation beyond repute krishmunn has a reputation beyond repute krishmunn has a reputation beyond repute krishmunn has a reputation beyond repute krishmunn has a reputation beyond repute
Default

Quote:
Originally Posted by vaayu View Post
The question that I always have in mind is how many of us living in US are activley thinking abt retirement & 401k and how aggressively are they doign it. How much money is needed for you to retire is a big dynamic number and depends on who you're asking.,
I started my 401 when I joined an employer who matches up to 3% of my salary. It was free money . When I quit that employer, I moved the 401K nest to an IRA and started a new 401K in the new company (which also offered a match). But I put only the amount needed to get the match ... partly because I need cash for buying a house (planning shortly). If I have more money I will probably put a few grands more to IRA or 401.

My plan is to retire in India and live life kingsize with Social Security and whatever savings I can make Bought 2 properties in India. Can probably buy a third one before I retire
__________________
------------
Contribution $200
Bookmark and Share Compare Reply With Quote


  #8 (permalink)  
Old 09-27-2013, 01:32 PM
Senior Member
Priority Date
:
Nov-10
Category
:
EB3
I140 Mailed Date
:
Chargeability
:
India
Processing Stage
:
I-140
I485 Mailed Date
:
Compare
Join Date: May 2013
Posts: 133
AceMan is a splendid one to behold AceMan is a splendid one to behold AceMan is a splendid one to behold AceMan is a splendid one to behold AceMan is a splendid one to behold AceMan is a splendid one to behold AceMan is a splendid one to behold
Default 401k and ROTH

401K is pre-tax money. So what ever you earn after 59.5 years old attracts a tax. As Thomachan said if you had started at around 30 years old, you would have invested for about 30 years and the money would be substantial and would attract the highest income tax bracket.

Currently the limit is 17600 $ per year. If you are above 50 years you are allowed additional 5000 $ for catch up.

The other option is going for ROTH. It is post-tax money and hence tax free at the time of maturity. A point to be noted here you get tax exemption only for the money you put. The profits made by your investment will still be taxable at the prevailing rate.

So depending on individual needs you should be selecting the appropriate plan.

It would be wasting money if people avoid 401K, if they have corresponding matching
Bookmark and Share Compare Reply With Quote


  #9 (permalink)  
Old 09-27-2013, 02:53 PM
Member
Priority Date
:
Jun-11
Category
:
EB2
I140 Mailed Date
:
08/29/2011
Chargeability
:
India
Processing Stage
:
I-140
I485 Mailed Date
:
Compare
Join Date: Feb 2012
Posts: 45
gchungry is a splendid one to behold gchungry is a splendid one to behold gchungry is a splendid one to behold gchungry is a splendid one to behold gchungry is a splendid one to behold gchungry is a splendid one to behold gchungry is a splendid one to behold
Default

Quote:
Originally Posted by AceMan View Post
401K is pre-tax money. So what ever you earn after 59.5 years old attracts a tax. As Thomachan said if you had started at around 30 years old, you would have invested for about 30 years and the money would be substantial and would attract the highest income tax bracket.

Currently the limit is 17600 $ per year. If you are above 50 years you are allowed additional 5000 $ for catch up.

The other option is going for ROTH. It is post-tax money and hence tax free at the time of maturity. A point to be noted here you get tax exemption only for the money you put. The profits made by your investment will still be taxable at the prevailing rate.

So depending on individual needs you should be selecting the appropriate plan.

It would be wasting money if people avoid 401K, if they have corresponding matching
I think contributing to 401(k) is always a good idea. Even if you stay and retire in USA or thinking of going back to your home country. Whether your employer contributes or not. Here is my take. Let's say you started 401(k) from year 2010 and you maxed out your contribution 16K (if you can). You saved Fed Tax of approx 16-18% (assuming Gross is 80K to 90k). 16-18% is just a guessed number, not 100% sure. If you live in state where there is a state income tax than you saved x% state tax. Just for a calculation purposes, let's say you saved 25% of tax (both Fed + State Income Tax) on 16K = $4K. Same for Year 2011, 2012. Total Tax Saved $12K.
Now suddenly You need to go to your home country for good in 2013. NOW, your 401(k) account has $48K. from 2014, you start withdrawing $15K each year. Because you are not yet 59.5 years, you need to pay 10% panalty. That is $1.5K. Since for Year 2014, that's your only USA income, you need to pay 10% Fedral tax on that withdrawl - (Standar Deduction + Personal Exemption). for 2013, Personal Exemption is $3900 and standard deduction is $6100. You won't have State Income Tax because you are not earning in state anymore. So 10% Fed Tax on remaining $5K i.e. $500. Hence Total Penalty + Fed Tax = $2K. on $15K, it's 13.3% (Tax + Penalty). Still you saved atleast 12% tax overall. Keep on withrawing partial amount as needed regularly to reduce Fed Tax and you should be good.
Bookmark and Share Compare Reply With Quote


1 out of 1 members found this post helpful.
Reply

Bookmarks


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On
Trackbacks are Off
Pingbacks are Off
Refbacks are On

Similar Threads
Thread Thread Starter Forum Replies Last Post
401k withdrawl luisk8nj Tax, Social Security and Financial Issues for Immigrants and Nonimmigrants 6 09-09-2011 11:05 AM
401k good?? thomachan72 Tax, Social Security and Financial Issues for Immigrants and Nonimmigrants 12 10-04-2010 04:18 PM
advice to rollover 401k billu Tax, Social Security and Financial Issues for Immigrants and Nonimmigrants 3 07-18-2010 11:55 PM
Question about 401K and SSN piyu7444 Tax, Social Security and Financial Issues for Immigrants and Nonimmigrants 23 05-20-2009 07:58 PM
You need awareness! How about this idea... Chris Rock News articles and reports 4 01-28-2009 01:06 AM



All times are GMT -4. The time now is 08:04 PM.


Powered by vBulletin® Version 3.7.4
Copyright ©2000 - 2019, Jelsoft Enterprises Ltd.
(c)ImmigrationVoice.org