401k question

[idibezwada]

say if we withdraw the 401K amount after moving to india..will we be charged based on current tax bracket or the tax braket at that point of time.....say i am on 33% tax bracket now and have 100K in 401K ....now i moved back to india...and started withdrawing 10K each year...will i be paying 33% tax +10% penalty or 10%tax+10%penalty??

[LadiesTailor]

56 minutes ago, Simple123 said:

contribute min of 5% .

Plus 100

yes put min of 5% from pay check and if you can contribute more... but don’t exceed IRS limit....

5% petti vadiley... after few years you will be happy with your decision... 

[LadiesTailor]

Just now, idibezwada said:

say if we withdraw the 401K amount after moving to india..will we be charged based on current tax bracket or the tax braket at that point of time.....say i am on 33% tax bracket now and have 100K in 401K ....now i moved back to india...and started withdrawing 10K each year...will i be paying 33% tax +10% penalty or 10%tax+10%penalty??

10% penalty and rest depends on your tax bracket.... if you withdraw less amount say 10k... total 20% gone... but still worth trust me

[idibezwada]

4 minutes ago, LadiesTailor said:

10% penalty and rest depends on your tax bracket.... if you withdraw less amount say 10k... total 20% gone... but still worth trust me

i know its worth...but my doubt was if i am sure i will be moving to india for good in say 5 yrs...isn't it better to max out the 401K and start withdrawing it later....this way we will be charged less in taxes noo....if i am earning 100K and contributing 19K to 401k...i will only be charged 33% tax on the rest 80K right....technically i will be saving the taxes of 23% ...considering 10% penalty will be compensated by the growth of market

[LadiesTailor]

1 minute ago, idibezwada said:

i know its worth...but my doubt was if i am sure i will be moving to india for good in say 5 yrs...isn't it better to max out the 401K and start withdrawing it later....this way we will charged less in taxes noo....if i am earning 100K and contributing 19K to 401k...i will only be charged 33% tax on the rest 80K right....technically i will be saving the taxes of 23%

That’s one way of saving but you need to make sure you have a proper address proof to file taxes... I know a person who withdraw total amount before leaving to India for good and didn’t file any tax returns... of course he never came back

[chicchara]

3 minutes ago, idibezwada said:

i know its worth...but my doubt was if i am sure i will be moving to india for good in say 5 yrs...isn't it better to max out the 401K and start withdrawing it later....this way we will be charged less in taxes noo....if i am earning 100K and contributing 19K to 401k...i will only be charged 33% tax on the rest 80K right....technically i will be saving the taxes of 23% ...considering 10% penalty will be compensated by the growth of market

[idibezwada]

5 minutes ago, LadiesTailor said:

That’s one way of saving but you need to make sure you have a proper address proof to file taxes... I know a person who withdraw total amount before leaving to India for good and didn’t file any tax returns... of course he never came back

so you are saying we cant withdraw after moving to india? india move ayyaka inka address proof ela untadi uncle

[Spartan]

[idibezwada]

1 minute ago, Spartan said:

uncle..throw some light noo

[xano917]

1 minute ago, Spartan said:

We all are 401k expert consultants today . Why that face ? 

[Spartan]

3 minutes ago, idibezwada said:

uncle..throw some light noo

 

[Peddayana]

1 hour ago, jua_java said:

100% until 3% and 50% until 5% .

 

so 10% fine ante entha match component vunna ultimately loss e kada , if we do an early withdrawal 

Contribute 5% atleast sothat you get an overall match of 4%

Early withdrawal will be taxed and you also have to pay penalty , but you can withdraw in equated installments to reduce the tax burden I think.

Either way , 9% of Salary saving is good and it will grow/compound over the years 

[Spartan]

9 minutes ago, idibezwada said:

uncle..throw some light noo

lets say ur salary is flat 100K for 5 yrs..

and u put 19.5K limit in 401K with employer matching. of 100% upto 5K so ur annual contribution will be 24.5K per year. Tax free. 

every year u are paying tax only for 75.5K which falls under 20% tax bracket for assumption. = 15.15K per year on federal tax.

without contribution u would pay = 20K tax.

============================================

401K avg return 8% eskundam for 5years... which is gain of 10K for 5 year period + your 24.5K limit x5  === total net worth of 401k after 5 years  = 122.5 + 10K = 132k.

nuvvu india vellipoyavanuko, and withdraw 10K every year for 10years...

ne salary tax bracket almost 10% untadi max. and on top of it u pay 10% penalty for that 10K . = 1000$ for 10years... = 10K.

so nee growth = 10K adi tax lo kattestunnav as early withdrawl..

but u end up with 132 K which u never paid tax for kada....so ne dabbul neekuntai...

incase tax ekkuva kattina, employer contribution will cover those charges/expenses...nuvvu contribute chesinavi neeku vastai any given day...

 

 

PS: math numbers might be off...just illustration purpose...malli math tappu ani dobbakandi...

[idibezwada]

5 minutes ago, Spartan said:

lets say ur salary is flat 100K for 5 yrs..

and u put 19.5K limit in 401K with employer matching. of 100% upto 5K so ur annual contribution will be 24.5K per year. Tax free. 

every year u are paying tax only for 75.5K which falls under 20% tax bracket for assumption. = 15.15K per year on federal tax.

without contribution u would pay = 20K tax.

============================================

401K avg return 8% eskundam for 5years... which is gain of 10K for 5 year period + your 24.5K limit x5  === total net worth of 401k after 5 years  = 122.5 + 10K = 132k.

nuvvu india vellipoyavanuko, and withdraw 10K every year for 10years...

ne salary tax bracket almost 10% untadi max. and on top of it u pay 10% penalty for that 10K . = 1000$ for 10years... = 10K.

so nee growth = 10K adi tax lo kattestunnav as early withdrawl..

but u end up with 132 K which u never paid tax for kada....so ne dabbul neekuntai...

incase tax ekkuva kattina, employer contribution will cover those charges/expenses...nuvvu contribute chesinavi neeku vastai any given day...

 

 

PS: math numbers might be off...just illustration purpose...malli math tappu ani dobbakandi...

i am still a contractor...employer wont match...so never though of 401k as a viable option...aite anavasaramga taxes mingabetta anamata

[uyghur12]

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