401k

[akk]

A question that may be useful for several....

Once we get out of our employers and US, how can we get our 401k? I don't want to keep it in US if I am not going to use it. Can we withdrawn it by ourselves(if yes, how?) or we need to ask our last employer to help us (hope not!)?

Akk

[rascojenkins]

Check on one of your update letters from that division, they should be a contact number. call and they'll direct you on how to withdraw the money if you are no longer with the company.

[dnataraj]

Yes we can do it ourselves. No need of employer.

[Ell.Bee]

Some of the facts to consider for withdrawal.

401k-and-ira.com/401k-withdrawals.html

[akk]

Do you guys know if 401K is mandatory to H1B?
I just realize my old company didn't pay for 2008..
Is there any website that states the rules for 401k related to H1Bs?

Thanks,

[ChaloCanada]

401K is not mandatory - Its your choice if you want that retirement savings plan. when u opt for it u contribute money to that accoutn and your employer too contributes before taxes.

now if you want to withdraw before age 59.5 . thereis a penalty of 20% before you get it in your hand and when you file taxes next year again a tax.

if u don't wanna pay penalty leave it in US and go anywhere in the world and contact your administrator (like VANGUARD) at age 59.5 he will give your money after taxes.

if u go to Canada,  though its another country, it has same credit score and programs like US.
Canada also has the same 3 credit rating companies.

Now if you say to IRS that give my money back without penalty i am not u r citizen the answer is u shld now have opted for 401k. penalty rules are same as for citizens

if u leave debt in US and leave the country and don't file taxes for this year and runawy.  IRS will take the debt as income and issue a 1099 income for u and keep a record of it in your IRS statement and get you when u come back to get your 401k.

[mango.lassee]

Don't know if the laws have changed since this post, but this may help:

http://www.askmehelpdesk.com/taxes/401k-early-withdrawal-non-resident-32948.html

[akk]

Thanks, but I think I didn't make my doubt clear...
My question was if employers are obligated to contribute with 401k for H1bs or not...
For example...if my employer didn't pay my 401k can I sue them? Is there any law that says that H1B must receive 401k from the employer (the minimum of 3% which is mandatory to american employees) ? or the employer can decide not to pay it?

Akk

401K is not mandatory - Its your choice if you want that retirement savings plan. when u opt for it u contribute money to that accoutn and your employer too contributes before taxes.

now if you want to withdraw before age 59.5 . thereis a penalty of 20% before you get it in your hand and when you file taxes next year again a tax.

if u don't wanna pay penalty leave it in US and go anywhere in the world and contact your administrator (like VANGUARD) at age 59.5 he will give your money after taxes.

if u go to Canada,  though its another country, it has same credit score and programs like US.
Canada also has the same 3 credit rating companies.

Now if you say to IRS that give my money back without penalty i am not u r citizen the answer is u shld now have opted for 401k. penalty rules are same as for citizens

if u leave debt in US and leave the country and don't file taxes for this year and runawy.  IRS will take the debt as income and issue a 1099 income for u and keep a record of it in your IRS statement and get you when u come back to get your 401k.

[ChaloCanada]

Those things are discussed during job offer. Some companies pay 50% of employee contribution and some 100% and some 25%.
So if u had that in your benefit package u can sue.

Otherwise
nothin

[at-80]

Employers are not obligated to contribute to 401K. However, if they decide to contribute, percentage contribution has to be same for all employees having similar work experience. There cannot be any discrimination for H1B's.

Penalty for 401K withdraw is 10% + Tax. However if you leave US in 2009 and take out (say $25,000) in 2010 and you do not earn any income in 2010 in US, then you pay a penalty of 10% + tax on $25K. Since tax slab varies by income, its quite possible that you may not even pay any tax.

Many temporary workers who come to US to work opt to take 401K from their employer if its offered. Say if an employer matches 100% for first 6% of your contribution, then in literal sense, if you contribute $500 every month, your employer also contribute $500 every month. (Which is actually doubling your money). Now if in any year you do not earn any income in US, then take out the money out of your 401K upto the minimum taxable slab and you just pay 10% penalty. OR wait until 59.5 years of age. (Remember that you can only take out that money which has been vested. Generally after 3-5 years of contributing, you are fully vested on what you deposited and what your employer deposited).

After you leave your employment where you had 401k with you employer, you can either keep the money in the same 401K plan or you can roll over to a IRA which is owned and managed by you and not your employer.

All in all, 401K is not mandatory for any employer to offer. Its a benefit given to employees. Some do and some dont. Small consulting companies may not. Big corporations may.


Thanks.

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I can be wrong. Above facts can be incorrect. Please do your own research or seek legal advice or contact your tax consultant. Please do not rely on the above. I am not certified to give financial or legal advice.

[akk]

Thankss!! very clarifying...another doubt...if they payed in the past, does that mean that they are obligated to pay in the future?
I received in 2007, but not in 2008...is that legal? Can they stop paying when they want to?

Akk

[fira]

They can change company policy...I am not sure, any company/corp dared enough to say that they will contribute 401k irrespective of any situation...

Bottomline, It is provided by company and they are giving employees a benefit, which employee has agreed to take.

[at-80]

Yes. The above post is correct. Since 401K is a benefit, it can change from year to year. There is no hard and fast rule. In the end it's the free money that you are getting from employer and on top of it you do not pay tax on what you put on 401K. All in all, if it's offerred by your employer, then one must take it.