401k question

[chicchara]

9 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...

entha cheppina ...some newbies feel like its a cutting from current jeetham and wont help.

immediate ga..nen India move aipotey enti ? aney question esthaaru . 

good post and explanation

[Spartan]

4 minutes ago, idibezwada said:

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

yes employer contribution cheyakapoina, it will come handy in long run, the amount on ur investment..

though scenario changes with when u want to take return,

typical retirement age veskunte..always 401K is beneficial.

[Spartan]

3 minutes ago, chicchara said:

entha cheppina ...some newbies feel like its a cutting from current jeetham and wont help.

immediate ga..nen India move aipotey enti ? aney question esthaaru . 

good post and explanation

agreed

[Kalam_Youtheman]

2 hours ago, jua_java said:

ma company 3% match chestundi ...is this a good match and ok start investing in 401k ? 

India vellipote e money withdraw cheskunte fine entha padudi, in this case is it still worth to go for this 401k?

aa 3% match is 100% ante nuvvu 10S ante company kuda 10$.. if so go for it

 

I have 108K in 401k now..BUt nenu 5% chesaa.. company 3% migitha 2%                    50%

[chicagoafdb]

401k

[jua_java]

3 hours ago, chicchara said:

entha cheppina ...some newbies feel like its a cutting from current jeetham and wont help.

immediate ga..nen India move aipotey enti ? aney question esthaaru . 

good post and explanation

True any beginner will have the same question ! Early withdrawal appudu pocket nunchi velinna money anna venaki rakapote what is the point ane confusion lo vunde !

[rajprakashraj]

Contractor ithe emina options unnaya to have 401k kind stuff

[ravana]

4 hours ago, 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??

this one 10%tax+10%penalty

[ravana]

3 hours 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   80.5K 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...

 

[nenesuperni]

if i am paying 10% interest on $50k , is it worthy enough to invest 6% of my paycheck in 401k ? sorry might be dumb after what spartan said but i am unable to do math straight :| 

[rajprakashraj]

4 hours ago, Spartan said:

agreed

dude, conntractors kuda 401k invest cheyocha

[jua_java]

4 hours ago, chicchara said:

entha cheppina ...some newbies feel like its a cutting from current jeetham and wont help.

immediate ga..nen India move aipotey enti ? aney question esthaaru . 

good post and explanation

One more question bro ! So early withdraw cheste tax + fine padudi and when we move this fund to india akkada malli additional tax emaina paduda ?(because manam ippudu monthly emaina money india transfer cheste we dnt pay any additional tax in india )

[Spartan]

2 hours ago, rajprakashraj said:

dude, conntractors kuda 401k invest cheyocha

anyone can do it man.

[Spartan]

2 hours ago, jua_java said:

One more question bro ! So early withdraw cheste tax + fine padudi and when we move this fund to india akkada malli additional tax emaina paduda ?(because manam ippudu monthly emaina money india transfer cheste we dnt pay any additional tax in india )

no double taxation....

[chicchara]

12 hours ago, nenesuperni said:

if i am paying 10% interest on $50k , is it worthy enough to invest 6% of my paycheck in 401k ? might be dumb after what spartan said but i am unable to do math straight 😐

how much is the company contributing ? early withdrawal appdu 10% kattina kuda.. nee 6% aitey neku pakka vasthundi