Ask HN: Your thoughts on if H1B employees should contribute to 401k or not?

Re:Ask HN: Your thoughts on if H1B employees should contribu... by akg_67 on Monday April 21, 2014 @07:07PM (#7624584)

You should contribute maximum possible to 401(k) plan of your employer. You get two main benefits from your contribution - employer match and tax reduction as contribution are pre-tax.

Why would you need to withdraw early? In case you do go back to your original country, either leave the 401(k) alone or rollover to an IRA. There is no issue leaving the money in IRA/401(k) in US until you become eligible for penalty-free withdrawal.

BTW, depending on the country and its tax treaty with US, you may be able to move retirement funds penalty free from US to your country (for example (401k to RRSP in Canada). Also, if you paid social security in US, you can get equivalent credit in to your country's similar plan (for example, Canada Pension Plan).

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Re:Ask HN: Your thoughts on if H1B employees should contribu... by turnip1979 on Wednesday April 23, 2014 @05:09PM (#7636932)

> (for example (401k to RRSP in Canada)

Any sources on this? I find the laws around this to be incredibly complicated. Good advice is hard to find due to the cross-border nature of this.

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Re:Ask HN: Your thoughts on if H1B employees should contribu... by akg_67 on Wednesday April 23, 2014 @11:08PM (#7638314)

You may want to talk to a Canada Revenue Agency agent. My info came from a CRA agent who was liaison with IRS on tax related policy issues. Also, a Canadian Bank that has presence in US will be helpful in transferring 401k in US to RRSP in Canada.

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