{ "media_type": "text", "post_content": "Just started to work in the US on h1b.should I invest in 401k? What if I am not sure about staying in the US for the long term..Is there a penalty for early withdrawal - does it make financial sense?", "post_id": "5bf98a98fb1d87001752f634", "reply_count": 12, "vote_count": 1, "bowl_id": "58f8108c753e990016608a0b", "bowl_name": "Desi Consultants", "feed_type": "bowl" }

Just started to work in the US on h1b.should I invest in 401k? What if I am not sure about staying in the US for the long term..Is there a penalty for early withdrawal - does it make financial sense?

like
Posting as :
works at
You are currently posting as works at

Yes there is a 10% penalty plus you should pay applicable income tax. Many people on H1 still do it because they don’t want to lose out employer contribution.

Definitely put money in 401K. The money is pre tax contribution. Plus if you go back to India later wait one year when you have 0 income for the year so most likely you will only pay the 10% penalty and no tax or much lower tax than your current bracket. Also employer match is more free and tax free money like D1 said. You cannot lose.

What is the maximum you can put in 401k and how much will the company match?

$18500 per year. This is going to $19000 from next year I believe as IRS is changing limits starting 2019. Match varies from company to company. Deloitte pays lowest. They do 25% match up to 6% of salary which is basically 1.5% match. For example, if your base salary is 100K and even if you contribute $18500 (max allowable contribution amount for 2018), the company will only match $1500

D1: does that 18.5k limit includes company contribution?

This maybe dumb question - can u not wait till 65 and withdraw it, esp if the contribution is low - 5% ish

C2: No. Excluding Employer contribution you can save up to 18,500$. PwC1: Yes, and it is up to individuals. You don’t need to wait till 65. I think 59.5 yrs is what IRS says.

P1 yes, the idea of retirement vehicles like 401K or IRA is to not let folks touch the money until 59.5 or older. At some age though (65?) you are forced to start withdrawing RMD(required minimum distribution). The regulations are in place like the 10% penalty and full income tax on contributions to discourage withdrawing earlier than retirement in a way force savings. But some life circumstances need you to access that money like leaving the country and there are some options to minimize your tax impact by deferring withdrawal to a year when your income is zero in the US for example.

@D1 and D2, thank you for the insights. I am aware of the purpose - my only concern is say i go back and just keep the money as is. At age 60 when i want to withdraw from India it shouldn’t cause any issue - mite have to pay taxes in US as well as India possibly?

PwC1: I am in the same boat and my plan is to withdraw it in a year I won’t have any income in US and then put it in a pension plan in India.

D1: thanks a lot! Time to increase my contributions:)

Well... we are possibly talking about a situation after couple of decades, so no idea, earth could be flat :) With current regulations, I don’t see any issue waiting until retirement. As for taxes, amount you withdraw from 401k is considered as taxable income for that year and you will pay IRS accordingly. Now if you push that money into account in India, you don’t have to pay taxes again, however interest paid by banks in India are taxable. (This is purely my limited knowledge, someone correct me if I’m wrong.)

Related Posts

So how much to partners actually top out at? I've heard they start at 300-400ish but I can only imagine it going up from there, especially if you make partner in your 30s and retire at 62. (Non mbb)

like

How do you guys invest your money? Max 401K?

like

Only 42 more years until I retire!

like

Deloitte and EY, what are your benefits like? I currently get 5 weeks PTO and 100% match up to 6% 401K. I want to start applying elsewhere since I'm underpaid but base salary isn't everything

like

Finally 25 years young and think I'm about ready to retire this year

like

Where do you guys invest your savings apart from 401K? Need some good investment options

like

Tell me more about Deloitte pension?

What are your thoughts about the impending EY pension and 401k changes?

like

What % of your paycheck do you put into your 401k, Roth, etc.? Recently realized I'm not maxing out the annual amount and wondering if I should change it.

like

What's the split between traditional and Roth 401K that you are using?

like

What do partners do after they retire? What's the idea behind making them leave at 56?

like

BCGers: do you get a 401k match beyond the PSRF? If so, how much? Asking for a friend

like

What's the 401k rule at PwC if you leave before completing 5 years? Do you not get employer contribution at all or just some % of it?

What is the 401k match % for the various firms. Heard Accenture matches 100%!!?

like

Is there an option on Deloittenet to NOT have your 401k deducted from your bonus?? Thanks!!

Will 7% of my AIP be routed to my 401k on my 9/2 paycheck? Is there any way I can stop this or is it too late? If I go to change my deduction on Vanguard it says that changes will be effective 9/16.

like

Why is everyone so obsessed with what everyone else makes? I'm over here calculating how I can retire at 45 and the only salary that matters to me is my own.

like

PwC folks. Bonus time is coming. Are you adjusting your 401k and how?

How many of you Deloitters modify your 401k allocations before AIP hits...? Just remembered there's no opt-in/out and it gets pushed to Vangaurd...

like

Comparing job offer with current benefits. What is the 401K match at D and Pension plan? Portal is down til Thurs. so can't look it up.

Additional Posts

Hhjjndjjffjjddjdh dndbbdndjjdjdndnnf dndbdhjxjdjd djdjhdjdjdjhdjndndndjdjdjdjjcncndjdjnd dhdjhdjdjdjhddhhd ghhhhhhh ghbbbbb fghhhhhhbh cvhhhhhhbhbb ghhbb. Hjnxnxndbd vsbdbddbbxbdbbd dbdhdhdjjxndnbdhdh

like

Part of the crowd. The briefcase doesn't show in post details though.

like

Cl bl lb. l fot

Fhhbbbbjjnnnnnnsn dnnsndjjjd dhjhdjjdjdjdjnd dhjhdjjdjdjdjnd djjfjdjjdndndnnfnd dhjhdjjdjdjdjnd dhjhdjjdjdjdjnd djjfjdjjdndndnnfnd djjfjdjjdndndnnfnd now djjfjdjjdndndnnfnd do. D dndnnfndnnsdhjdjdjdjnd

like

How does this sound?

like

Yeah you're right. It cuts after two lines instead of expanding.

like

What are some good companies to work for in Dallas?

Correct font and company!

like

Posting from the top side.

Ahh it is posting but into middle of feed as opposed to top.

like

Hdjdjjdjd f hdjdjdjdhjd djdjdjjd d djdjdjjd bend djdjdjjdjjd djdjdjjdjjd djdjdjjdjjd djdjdjdjjdhdhdhdbbd djdjjdjdjdjdhje djdjjdjdjdjdhje djdjjdjdjdjdhje djdjdjjd djdjdjdjjdhdhdhdbbd djdjhdjdjdjdhdhhdj

like

Looking good! Create post animation looks great too and so does the character count!

like

new test post

like

Post in top

like

Folks who got into H/S/W - what were your numbers (GMAT, GPA), undergrad school tier, background/ethnicity and "story" for your app? Any tips for someone applying this year?

like

Hey FB, anyone considering the chase sapphire reserve card? I rely a lot on alt travel and points so would only see 3:1 points on dining. Currently own the sapphire preferred.

like

As a technical consultant (data scientist), how important is it for you to develop relationships with clients in the specific industry you're interested in, like healthcare, as you move up? Or, is it enough to just build a track record of tech chops & impact at the VP/C-level of other industries, even if you don't have any personal rapport with clients to leverage?

like

Anyone renege on an offer or accept an offer and continue interviewing for other roles? Does the volatility of the job market due to Covid make this less scumbaggy? For context, my start date was pushed multiple times by months.

like

Other consultants in the healthcare vertical? What are your thoughts on Obamacare aka Affordable Care Act?

like

Has anyone force rolled off themself due to a ill defined role? How did you approach the conversation with your team? Did you find your own replacement and a new project before rolling off?

like

New to Fishbowl?

Download the Fishbowl app to
unlock all discussions on Fishbowl.
Download Fishbowl to see what others are saying
That was just a preview…
Sign Up to see all discussions
  • Discover what it’s like to work at companies from real professionals
  • Get candid advice from people in your field in a safe space
  • Chat and network with other professionals in your field
Sign up in seconds to unlock all discussions on Fishbowl.

Already a user?
Login here

Share

Embed this post

Copy and paste embed code on your site

Preview

Download the Fishbowl app

Get realtime notifications and see
what's happening in your industry
from the palm of your hand.

For account settings, visit Fishbowl on Desktop Browser or

General

Legal