jobkastalu Posted April 4 Report Posted April 4 Does it makes sense to contribute max to traditional IRA on top of maxing out 401k if the plan is to retire in India? Don't want to create more headaches with starting IRA unless there is a big benefit as i am maxing out 401k for quite a few years now and aware it is a complicated process to withdraw from India after retirement with all the paperwork and taxes involved. Quote
aratipandu Posted April 4 Report Posted April 4 17 minutes ago, jobkastalu said: Does it makes sense to contribute max to traditional IRA on top of maxing out 401k if the plan is to retire in India? Don't want to create more headaches with starting IRA unless there is a big benefit as i am maxing out 401k for quite a few years now and aware it is a complicated process to withdraw from India after retirement with all the paperwork and taxes involved. Your prersonal preference anna...I'd recommend maxing out 401k first but you are already doing it... do you still have extra cash lying around? then go ahead with IRA..traditional or roth is again your preference based on your tax brackets etc Complicated process ante...401k ayna, IRA ayna future lo same process untadhi withdrawals ki...elago 401k ki aa complicated process follow avthav ga...you'll mostly be rolling your 401k into an IRA after leaving your employer...all IRA accounts merge cheseskovacchu appudu..so same complication irrespectively Quote
aratipandu Posted April 4 Report Posted April 4 21 minutes ago, jobkastalu said: Does it makes sense to contribute max to traditional IRA on top of maxing out 401k if the plan is to retire in India? Don't want to create more headaches with starting IRA unless there is a big benefit as i am maxing out 401k for quite a few years now and aware it is a complicated process to withdraw from India after retirement with all the paperwork and taxes involved. Calling Investment and retirement planning expert @Konebhar6 anna for his valuable opinion on this topic... Assale @jobkastalu lo unna neeku retirement kashtaalu kuda occhaye ayyo papam ani baadha paduthunna @Jatka Bandi Quote
Konebhar6 Posted April 4 Report Posted April 4 It depends on who you ask. You will get varied opinions. A lot depends on how much you make. I would max out everything without compromising the quality of my current life and having enough to save (for a rainy day) and able to pay off the bills. Once you retire or move to india, withdraw amount every year with min taxes. Quote
ChanceCoffeeLover Posted April 4 Report Posted April 4 If you have kids and if they plan to be in US later in life, you can pass on to kids as inheritance. Quote
Thokkalee Posted April 4 Report Posted April 4 Move ayyaka withdraw cheskunte, you pay 10% fine and taxes on your earnings.. usually ppl withdraw it the next year after they move as they won’t have any income that year and will be taxed at the lowest slab.. IRA lo tax only on gains and not contributions .. Quote
nag Posted April 4 Report Posted April 4 7 hours ago, jobkastalu said: Does it makes sense to contribute max to traditional IRA on top of maxing out 401k if the plan is to retire in India? Don't want to create more headaches with starting IRA unless there is a big benefit as i am maxing out 401k for quite a few years now and aware it is a complicated process to withdraw from India after retirement with all the paperwork and taxes involved. same person cannot max out in 401k and IRA .. I think you can contribute to only one in an year Quote
ChanceCoffeeLover Posted April 4 Report Posted April 4 21 minutes ago, nag said: same person cannot max out in 401k and IRA .. I think you can contribute to only one in an year That is not true. They can max out 401k and IRA in a year 2 Quote
nag Posted April 4 Report Posted April 4 11 minutes ago, ChanceCoffeeLover said: That is not true. They can max out 401k and IRA in a year not for the same person. If wife and husband filing jointly ...each can have either 401k contribution or IRA ..but not both.. check with your tax filing consultant. Quote
ChanceCoffeeLover Posted April 4 Report Posted April 4 5 minutes ago, nag said: not for the same person. If wife and husband filing jointly ...each can have either 401k contribution or IRA ..but not both.. check with your tax filing consultant. https://www.investopedia.com/ask/answers/07/401(k)_ira.asp Quote
nag Posted April 4 Report Posted April 4 17 minutes ago, ChanceCoffeeLover said: https://www.investopedia.com/ask/answers/07/401(k)_ira.asp You might not be able to take a tax deduction for your traditional IRA contributions if you also have a 401(k), but that will not affect the amount you are allowed to contribute. second paragraph again my statement is limited to traditional IRA only ; Roth IRA is still possible Quote
jobkastalu Posted April 4 Author Report Posted April 4 3 hours ago, nag said: You might not be able to take a tax deduction for your traditional IRA contributions if you also have a 401(k), but that will not affect the amount you are allowed to contribute. second paragraph again my statement is limited to traditional IRA only ; Roth IRA is still possible We can. As long as you are under MAGI limits, no issues. Quote
jobkastalu Posted April 4 Author Report Posted April 4 11 hours ago, Konebhar6 said: It depends on who you ask. You will get varied opinions. A lot depends on how much you make. I would max out everything without compromising the quality of my current life and having enough to save (for a rainy day) and able to pay off the bills. Once you retire or move to india, withdraw amount every year with min taxes. Opened an account in Fidelity for IRA. Would it be better to go with target date retirement funds or anything else? Quote
jobkastalu Posted April 4 Author Report Posted April 4 5 hours ago, Thokkalee said: Move ayyaka withdraw cheskunte, you pay 10% fine and taxes on your earnings.. usually ppl withdraw it the next year after they move as they won’t have any income that year and will be taxed at the lowest slab.. IRA lo tax only on gains and not contributions .. You pay taxes on contributions and gains for traditional IRA withdrawls. You may be talking about Roth IRA. Withdrawing next year will attract less taxes only if you haven't made any money in that year when you were present in US. Quote
tollywood_hater Posted April 4 Report Posted April 4 12 hours ago, jobkastalu said: Does it makes sense to contribute max to traditional IRA on top of maxing out 401k if the plan is to retire in India? Don't want to create more headaches with starting IRA unless there is a big benefit as i am maxing out 401k for quite a few years now and aware it is a complicated process to withdraw from India after retirement with all the paperwork and taxes involved. If you are eligible,yes. Ira is tax free after your eligible for withdrawal unlike 401k which is pre tax now..... Again your personal choice Quote
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