After working for 4 years in the USA as a temporary worker (H1 Visa), I'm planning to return home. I'd like to know what are the implications to my 401K, IRA accounts. Can I continue to maintain these accounts till the age of 60? What early withdrawal options do I have, in order to minimize taxes and avoid penalty?
Answer: Your options are the same as a citizen. If the amount in your 401k is more than $5,000, you may leave the funds in the plan. You may also rollover the funds into an IRA (our recommendation would be to do so). You will have no problem maintaining this account as a non-citizen.
You may withdraw all or part of the funds from the 401k or IRA before age 59 1/2 for any reason, but you will owe federal income tax and a 10% early withdrawal penalty. After age 59 1/2, you will only owe income tax.
This is for educational purposes only. The information provided here is intended to help you understand the general issue and does not constitute any tax, investment or legal advice. Consult your financial, tax or legal advisor regarding your own unique situation and your company's benefits representative for rules specific to your plan.
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