Good primer on 401k but couple of points to add if you want to make it better: (i) a lot of employers now also offer a Roth 401k option, which functions similar to a Roth IRA (ii) the primary goal of a 401k is investment (as opposed to tax deferment) - in your example, Person B's return after 10 yrs will also include a significant investment gain apart from his (and his employer's) contribution amounts.
Well detailed explained amigos. I got more details about 401k plan and I hope this is the first UA-cam channel to explain 401k plan in Tamil. Great and keeps rocking perm and Arthi
This is good! I think the benefit you showed is because of employer match. Can you make a video about investing in 401k plan when there is no employer match? What are the benefits and downside? Also can you talk about maxing out 401k?
I found your video very useful. You explain it very well and could be understood by anyone easily. I've a question on withdrawing 401k from India. I read tax for NRA is flat 30%, is it not the case for Indians as US & India has tax treaties and does 401k come under it? Do you have any friends who have done it. Thanks for the info and help
Very good explanation... I always have a question on 401k, you clarified it clearly. Thank you Prem and Ahrthi. I will increase my 401k plan percentage 👍 also I shared it to my friends circle... hopefully it will help others. Keep up good work
Lot of people don’t plan for the retirement specially those living in the Middle East. Any private pension plan offered by employer is good as they will contribute certain percentage as well towards your pension.
Good job on videos.. but my two cents here. The interest rate on 401k loans isn't in double digits.. I know it varies but its in 6ish percent for general loans and may even be lower if you take the money for expenses like buying first home.. also the interest amount goes back to your 401k account so its like paying back yourself with additional interest so its much better than availing loans from a credit union or bank. The other thing is if you switch employees you have time till end of the following quarter to pay off the loan balance. Also I think you can take only upto 50000 or half of the 401k balance at max.. I have used this loan like already 4 to 5 times and has helped me achieve financial goals much easier.. obviously it varies by persons and need to be mindful of what they do with the money. Keep up the good work..
Hi bro... all the points which you brought here are valid.. i did mistake on interest rate and forgot to mention that interest will go back to 401k... thanks for your detailed comment here 👍👍
It’s not just Americans who live paycheck to paycheck also Some of the H1Bs that’s why we have so much car loans and credit card debts with 13%-22% APR
Clear explanation, it answers all my question I have it for long time. I had some $ in 401k which I am worried of. But I’m relived now. 👍. I have a question, if suppose I’m leaving this year and want to take out money next year so I can fall in low tax bracket. How can I do that. Do I need to have a US bank account active ?
Withdrawing money from retirement account should be done as last resort. The best thing to do is to move the assets into an IRA first from 401K. Then when you are in lower tax bracket, move the money little by little into a ROTH IRA. From ROTH IRA, you can withdraw the money without any penalty and tax after 5 yrs of contribution. It is called "ROTH Conversion Ladder Strategy". If you are not clear on how to do this, check out the "IRA/ROTH IRA" video in my channel. It is in English though by my son.
Bro, very useful info.. keep up the good work.. I have also enrolled in 401k and running for last 4 years.. due to stock market down since March..my 401k went 8 to 10 perfect down.. I hope it will go up.. also when it's up nearly 30 percent, that profit earned can match for tax rate so we can get our and employeer contribution full 😀😀😀
True bro.. now its the bad time everywhere and in 401k investments too... no one willing to withdraw now for sure... lets hope things will get better but definitely for 401k loss it may take more than a year ...
In long term, market has always gone up. Short term there will be wild movements like we experienced in March/April. Nothing to worry. During 2008 financial crisis, market went down by 50%. People will 1M balance had only 500K left. But they made the mistake of moving money out of stocks and invested in safer assets. But in one year, the market regained everything that lost. The lesson is - always stay invested. Do not make any drastic decisions during market downturn.
Nice information bro, especially in tamil. In the calculation you can add 3% confirm return or else they can invest in bonds that has very less risk . But you add this in principle amount the final amount more because of computing interest magic. Then more profit. I am not pointing the mistake and just recommend. Nice information bro. Keep up the good work 👌
Nice video. Thanks for sharing. In a separate video, could you please cover pregnancy, hospitalization, insurance and cost of delivering baby in USA? It will be really helpful for couples to plan in the future.
Hi, You can use 401k account to withdraw your emergency situations as mentioned above thru hardship Withdrawal. There are 6 different options available to withdraw. medical emergency also one of the option in Hardship Withdrawal.
People are so afraid to invest in stocks. During this Covid period many stocks are at ATH. Plus Nasdaq is at ATH. So the key to investing is picking very good companies that will survive even if market corrects or pullbacks. Plus many etfs are also there that gives excellent return. One has to invest time to make money in the stock market. If you learn it properly, you can make tons of money. I bought my home cash just by trading index.
You should have mentioned about 401k vesting period. This is usually 3-5 years depending on the employee within which if you quit or change your job you won't get any of the employer match.
Yes bro good point Even i mentioned in some of the comments.. yes it’s important most of the employers set vesting period as 5 years to get 100% employers contribution
401K interest loans are generally around 5% and the interest you pay is going back as an investment in your 401K account, like you are paying yourself 5% as interest. It may not be a good idea to do rollover your 401K account when you move b/w companies depends on your situation, because of the loan flexibility. The max 401K loan is up to 50K, when you roll over your 2 x 100K accounts, you still be able to get only 50K loan, if you keep it separate you can get up to a 100K loan. Many 401K providers have a restriction that your 401K loan will be due on the date you move out of the company just be aware. Most of the 401K plans have a default account as targeted date account based on your birth year and fees for managing the funds varies, in general index funds are better if you don't know what you are doing. Suggested read Money Master the Game 1 & 2.
Thanks bro for your awesome comments I have corrected interest rate in my comments, your points are valuable Please add more points I will mention in the next video
How difficult is it to withdraw 401K after retirement from India. Has anybody got a check mailed to India? Or did you need to have a US bank account even after returning to India. Someone who had some real experience please comment. thanks
Well Explained ! If we need urgent money, Taking loan is also better option. Personal loan or Credit cards interest will be very high and credit score will affect. If we take 401K loan, interest rate will be low and credit check will not happen and credit score will not change. One good things is interest will be pay back to out 401K account. I have taken 401K loan and interest is 4.25%
Well explained...just a add on point regarding the 401K loan. When we repay the loan the interest we are paying will also go back to our 401k account which is the best. Interest is not always 18 to 20%. For my loan Interest rate is 6%.
Bro sorry my bad... u brought the good point yes the interest will go back to the 401k account since u r taking loan amount from ur money... the only disadvantage is if u left the job or lose the job u have to pay the entire amount within the grace period... Thanks for sharing this.. i will quote in the next video
Thank you for the useful insights... My scenario (in H1B)is different employer offers 401k but does any provide contribution towards it.. so decided not going for it. Wishing your family lots of good health, love and prosperity...
Hi Gopal, But if you are planning to switch to a US based employer who will match 401k by that time you would have grown your 401K.that amount you can roll over to the new 401K. It must be beneficial if you plan to stay in US for long
401k Loan interest is not 18 - 20 %. It is more like 5 to 6 %. This was 2 yrs back. Now it is even lesser. Another important point is that, all the interest you pay goes back into your 401K account, so you don't lose much from loan perspective. But you won't have appreciation/ depreciation from market movement during the loan tenure.
Really helpful !!!!!! I was asking about this 401k to everyone and couldn’t understand this concept. Now it is clear. And one of my colleague lost 25k because he put the money in investment and covid hit him hard😭
Yes true ... even happened many of my friends too COVID hits everyone’s life 😞😞 sometimes i think its better leave the money as it is instead of invest some shares or bonds
It will come back. When the market is low, that’s when you put in money. If you now cash out from the indexes, then it’s loss. As long as you continue to hold the index units, it’ll come back up in the next few years.
I am happy to inform u guys that my daughter got offer letter for job and this is a timely information for her, because it was mentioned in the offer letter,thank u 🙏🙏
Thanks for the very informative video..it clarifies most of the questions. Adding to this rupee appreciation also helps when you are withdrawing money in n number of years...it may also compensate the withdrawal penalty.
Great video, I think you can stretch the point where earnings will grow a lot which is great reason to contribute to these retirement account and additionally company match as well.
Hi bro, investment with caution... but that is one of the key point in 401k You can invest safely in mutual funds if plans are available by employers....you can invest the employers contribution and get the benefits from it.. definitely for long term investment is the best option Its my opinion bro
I'm located in Singapore and planning to invest in US Stocks and I don't see any UA-cam channel in Tamil, so it could be good opportunity (You can see many Tamil UA-cam channel for Indian market, stocks)
In India PF have 8.5% interest, US not have any interest or stock value, what the use of putting money in 401k, withdrew 401k frequently and put fixed deposits at least give 2% interest in USA or India get 8%
SM A you have not understood the 401k. 401k guaranteed will give you 3 to 4% but if you invest in equity the returns are 12% to 16% and you get match from your employer. But this returns you might get if you continue for long term
Super topic bro... Most of the people have various questions about 401K! Bro, As you said, I resigned from my job in 2019 and returned to India. I left my 401K account as it is and I had invested in the share market. So far the growth is appreciable. Can I leave this amount invested in shares as it is or any procedure to change/convert/withdraw the 401K account? Please reply... 🙏
Thanks bro.. if u r asking me this is the bad time to withdraw 401k if we did investment through 401k.... because the stock market crash badly... you can wait one more year the things will get better
A good very informative video. The only scenario missed is what is recommended to those whose employer don't contribute to 401K? And some explanation regarding 403B would have been helpful.
what about the charges for your 401K maintenance which is calculated based on your invested amount every year, compounding Inflation of 2.2% every year? The info is great but which decision is better is questionable. On top of that if you are working in usa for 10 yrs it is obvious that you will be in higher tax bracket, so I am not sure if it is really a good choice to invest in 401k, if you planning to return to your country. Correct me if I am wrong.
Bro valid point you brought here If we have big amount in 401k and try to take it out it will end it up huge tax bracket... so we can withdraw upto the current income tax bracket and withdraw the remaining amount in the next year as a foreign nationals... but there is around 4k tax deductions for foreign nationals and after that 30% flat.. we should be plan wisely
I have a 401k account for 3 years. i would like to Hardship withdrawal to take the money out of 401K. But looks like complicate procedure ( requires document evidence). Does anyone withdrawn 401k (Hardship withdrawal)? If so, please share your experience
If you move to India end of the year and planned to withdraw 401k following year, hope your tax.status will be non resident (30% flat tax rate). Please clarify.
Thanks bro .. you brought the good point For any nonresident alien they will withheld 30% tax bracket... but you can do the tax return and work it out the refund if eligible using any tax consultants
Also there is a personnel exemption for 4,500 $ no need to pay tax so we can have many ways to withdraw the money Still 10% penalty applicable if u r less than 59.5 years old
@@ArthiPrem Actually no more personal exemption since 2018. www.irs.gov/individuals/international-taxpayers/nonresident-alien-figuring-your-tax But there are other ways to strategically withdraw the money with no penalty over a period of time. Check out "Roth Conversion Ladder" strategy. I have explained this in "IRA / ROTH IRA" video in my channel.
Good for you. Many do not realise the importance of maxing out 401K from day 1. This increases our savings rate and also will help us to get to achieve our financial freedom sooner in life.
Great video. Very clear and easy to understand. My question is that, do I get any advantage, if I leave the money in my 401k account even after I leave this country and withdraw it at the age of 59 or is it better to withdraw it right before leave this country?
It depends. If you think that you'll be certainly in a much higher tax rate when you retire than what you are currently in, then you should have at least some Roth 401k if not all. You should note that Roth 401k capital gains are also tax-free. But, if you think that you'll be a lower tax rate than what you are right now, then you can get away without Roth 401k. IRS tax changes over future years will also dictate your strategy. A lot of folks believe that we are in one of the lowest tax rates right now, which suggest that we should take advantage of Roth 401k. In the future, overall tax rates might go up.
thanks for the info, especially in the context of the typical "leave US in 10 years" - I have that mind set too. LOL. question: when I withdraw 54k, I am not only going to pay higher tax on the 54k but also on the 90k salary. for example, if the tax bracket for 90k is 20%, I pay 18k tax. if tax bracket for 144k is 25%, I pay 36k tax, of which 22.5k is for the 90k salary. so, that's a loss of 4.5k right?
Hello, Thanks for the video. I guess one point worth mentioning. If I’m not wrong, the interest you pay to the loan from 401K goes to your account only. If it right ?
Bro i meant that who is working on H1B will not be able to open 410k account on own Whereas self employed can open 401k account which is not possible for H1Bs Please correct me if i am wrong
Awesome job! Need small clarification please, as we can invest in 401(k) money, is it mandatory to withdraw after we go to India? Or can it get accumulative for few years and then with withdraw? Is it possible please confirm.
Thanks sister🙏 yes its not mandatory to withdraw immediately after left from usa There are several options You can keep till your 55 years old and said we are going to retire and withdraw without penalty We can withdraw after some years say whenever we need only small portions or entire amount... its wise to withdraw small portions to get the less tax bracket but we have to pay penalty... Hope we have answered your question 😊
Arthi Prem suppose if I go back to India and withdraw after few years a small amount and if I am employed in India..will my salary india be included in tax bracket to arrive at the tax rate for my small amount of 401k with drawal. For eXample, if I get 25 lash in India and I withdraw $5k , will my tax bracket become $5k+25 lakhs or it will be just $5k
@@nellaikannan3221 good question. Also how can we withdraw partially if we are with the same employer? Is the money credited to bank account or how does it happen?
@@nellaikannan3221 you will be in RNOR status for 2yrs when you return, where you'll not be taxed in India on the money you bring from usa. After 2yrs any money you withdraw will be double taxed.
Thanks for the info! Heard that after the 60yrs if we aren’t withdrawing then would there be monthly installments paid to us? Heard that won’t be taxable. Is it?
I had a thought when I was watching your video. Say if I have $54,000 in my 401K account and I leave the US. What if I withdraw a limited amount say, $19,000 every year from my 401K. Considering I will be filing the tax as MFJ. This means my remaining money will continue to grow in my 401K as well as I will be paying very less tax while withdrawing from my account. Do you think this is a better option?
Better option is to follow "ROTH Conversion Ladder" strategy. Check this out for details on this strategy: www.madfientist.com/how-to-access-retirement-funds-early/. I have explained how we can use this strategy when we move back to India in "IRA / ROTH IRA" video in my channel. Check it out if you are not able to follow madfientist's article.
Hi Tell me about 2 or 3 times people apply for unemployment benefits so they can after retirement how much money they can receive from social security office
Great job explaining! Love your videos. Have a question though - all the amount in 401k is already invested in stocks and bonds, right? but why did you say "neenga vena invest pannalaamnu". Puriyalai! Can you please explain what you meant by that? Thanks!
Question and answer session about H4 EAD 👇👇👇👇
ua-cam.com/video/gY8jLVXZExQ/v-deo.html
Good primer on 401k but couple of points to add if you want to make it better: (i) a lot of employers now also offer a Roth 401k option, which functions similar to a Roth IRA (ii) the primary goal of a 401k is investment (as opposed to tax deferment) - in your example, Person B's return after 10 yrs will also include a significant investment gain apart from his (and his employer's) contribution amounts.
Well explained ji👌👌👌
Any one who is moving to US should just watch all your videos!
Excel expect ji neega semma
Budget video was also awesome
Well detailed explained amigos. I got more details about 401k plan and I hope this is the first UA-cam channel to explain 401k plan in Tamil. Great and keeps rocking perm and Arthi
Thank you bro 😊😊😊
U give a lot of info for abt America... which a lot of people know also gives a thought process for people planning to come
Thank u sister 😊
This is good! I think the benefit you showed is because of employer match. Can you make a video about investing in 401k plan when there is no employer match? What are the benefits and downside? Also can you talk about maxing out 401k?
I found your video very useful. You explain it very well and could be understood by anyone easily. I've a question on withdrawing 401k from India. I read tax for NRA is flat 30%, is it not the case for Indians as US & India has tax treaties and does 401k come under it? Do you have any friends who have done it. Thanks for the info and help
Very good explanation... I always have a question on 401k, you clarified it clearly. Thank you Prem and Ahrthi. I will increase my 401k plan percentage 👍 also I shared it to my friends circle... hopefully it will help others. Keep up good work
Thanks much sister for your kind comments 😊😊😊
I subscribed today after watching couple of videos.. such a genuine and humble conversation like a family member.. keep posting infos.. stay blessed..
Thank you bro 🙏🙏
@@ArthiPrem Hi prem.. just now seen the vlog of ur recent accident... With God blessing nothing major to worry.... Stay safe.. all is well..
Lot of people don’t plan for the retirement specially those living in the Middle East. Any private pension plan offered by employer is good as they will contribute certain percentage as well towards your pension.
Awesome work Arthi Prem, continue making videos like these and educate us!
Definitely thanks for the comments 🙏
Hi, First time I am seeing your video and this content related to 401(K) is very useful. Thanks
Thanks bro🙏
Good job on videos.. but my two cents here. The interest rate on 401k loans isn't in double digits.. I know it varies but its in 6ish percent for general loans and may even be lower if you take the money for expenses like buying first home.. also the interest amount goes back to your 401k account so its like paying back yourself with additional interest so its much better than availing loans from a credit union or bank. The other thing is if you switch employees you have time till end of the following quarter to pay off the loan balance. Also I think you can take only upto 50000 or half of the 401k balance at max.. I have used this loan like already 4 to 5 times and has helped me achieve financial goals much easier.. obviously it varies by persons and need to be mindful of what they do with the money. Keep up the good work..
Hi bro... all the points which you brought here are valid.. i did mistake on interest rate and forgot to mention that interest will go back to 401k... thanks for your detailed comment here 👍👍
It’s not just Americans who live paycheck to paycheck also Some of the H1Bs that’s why we have so much car loans and credit card debts with 13%-22% APR
Clear explanation, it answers all my question I have it for long time. I had some $ in 401k which I am worried of. But I’m relived now. 👍.
I have a question, if suppose I’m leaving this year and want to take out money next year so I can fall in low tax bracket. How can I do that. Do I need to have a US bank account active ?
Withdrawing money from retirement account should be done as last resort. The best thing to do is to move the assets into an IRA first from 401K. Then when you are in lower tax bracket, move the money little by little into a ROTH IRA. From ROTH IRA, you can withdraw the money without any penalty and tax after 5 yrs of contribution. It is called "ROTH Conversion Ladder Strategy". If you are not clear on how to do this, check out the "IRA/ROTH IRA" video in my channel. It is in English though by my son.
Bro, very useful info.. keep up the good work.. I have also enrolled in 401k and running for last 4 years.. due to stock market down since March..my 401k went 8 to 10 perfect down.. I hope it will go up.. also when it's up nearly 30 percent, that profit earned can match for tax rate so we can get our and employeer contribution full 😀😀😀
True bro.. now its the bad time everywhere and in 401k investments too... no one willing to withdraw now for sure... lets hope things will get better but definitely for 401k loss it may take more than a year ...
We cannot say 401k is a loss as of now. When you invest in a right mix even now it will be a +20%
In long term, market has always gone up. Short term there will be wild movements like we experienced in March/April. Nothing to worry. During 2008 financial crisis, market went down by 50%. People will 1M balance had only 500K left. But they made the mistake of moving money out of stocks and invested in safer assets. But in one year, the market regained everything that lost. The lesson is - always stay invested. Do not make any drastic decisions during market downturn.
Thanks. Waiting for this article.
Like this pl release video on esop in us company in detail. God bless.
Thanks sago 👍
You brought the very good topic👍 will do
Good explanation about 401k plan. Very informative. Glad to know that your relatives live in Thanjavur.
Thank u aunty 😊😊
Bro great explanation. I am from porayar . Just now came to California. Hope to see you here in USA
What ever doubt, we have in mind ,there is good video to clarify. Nice guys 👍🙏
Thanks bro 🙏🙏
Good informational video. I hope this encourages more people to invest in such retirement plan.
நன்றி !!!
Very useful info and nicely presented.. We have been following your channel. Can you also post about ROTH IRA too.. thanks so much..
Thank you much sister 🙏🙏 definitely will do 👍
Roth IRA and also about converting traditional to Roth 🙏 nice informative channel btw😊
Check out "IRA / ROTH IRA" video in my channel if you want to know some strategies around 401K and IRA's. It is in English though presented by my son.
Nice information bro, especially in tamil. In the calculation you can add 3% confirm return or else they can invest in bonds that has very less risk . But you add this in principle amount the final amount more because of computing interest magic. Then more profit. I am not pointing the mistake and just recommend. Nice information bro. Keep up the good work 👌
Thanks for your valuable inputs and recommendations.. appreciate your comments thank u 🙏🙏
Nice video. Thanks for sharing. In a separate video, could you please cover pregnancy, hospitalization, insurance and cost of delivering baby in USA? It will be really helpful for couples to plan in the future.
Hi,
You can use 401k account to withdraw your emergency situations as mentioned above thru hardship Withdrawal. There are 6 different options available to withdraw. medical emergency also one of the option in Hardship Withdrawal.
@Arthi Prem - Good brief on 401K, very helpful. Do you guys have any video on 529 plan?
Not yet bro
Its on the list 👍👍
People are so afraid to invest in stocks. During this Covid period many stocks are at ATH. Plus Nasdaq is at ATH. So the key to investing is picking very good companies that will survive even if market corrects or pullbacks. Plus many etfs are also there that gives excellent return. One has to invest time to make money in the stock market. If you learn it properly, you can make tons of money. I bought my home cash just by trading index.
Wow thanks bro awesome information you are providing here...
Awesome content! Can you explain 529 plan or more about itemized tax items?
You should have mentioned about 401k vesting period. This is usually 3-5 years depending on the employee within which if you quit or change your job you won't get any of the employer match.
Yes bro good point
Even i mentioned in some of the comments.. yes it’s important most of the employers set vesting period as 5 years to get 100% employers contribution
There are two different vesting options available.
401K interest loans are generally around 5% and the interest you pay is going back as an investment in your 401K account, like you are paying yourself 5% as interest.
It may not be a good idea to do rollover your 401K account when you move b/w companies depends on your situation, because of the loan flexibility. The max 401K loan is up to 50K, when you roll over your 2 x 100K accounts, you still be able to get only 50K loan, if you keep it separate you can get up to a 100K loan.
Many 401K providers have a restriction that your 401K loan will be due on the date you move out of the company just be aware.
Most of the 401K plans have a default account as targeted date account based on your birth year and fees for managing the funds varies, in general index funds are better if you don't know what you are doing.
Suggested read Money Master the Game 1 & 2.
Thanks bro for your awesome comments
I have corrected interest rate in my comments, your points are valuable
Please add more points
I will mention in the next video
Thank you, Arthi and Prem. Useful infos.👍
Thank you 🙏🙏
How difficult is it to withdraw 401K after retirement from India. Has anybody got a check mailed to India? Or did you need to have a US bank account even after returning to India. Someone who had some real experience please comment. thanks
Well explained about 401k benefits clearly. Sounds great guys.
Good info.. keep going.. Video for social security benefits and Medicare pls?
Definitely sago👍👍 thank u 🙏
Well Explained ! If we need urgent money, Taking loan is also better option. Personal loan or Credit cards interest will be very high and credit score will affect. If we take 401K loan, interest rate will be low and credit check will not happen and credit score will not change. One good things is interest will be pay back to out 401K account. I have taken 401K loan and interest is 4.25%
Yes bro your absolutely correct... I missed this awesome point and corrected it in many of the comments
Thanks for sharing these points 👏👏👏
Thanks for taking time and explaining. it's really helpful.
On withdrawal after US exit, tax filing status changes as non resident. Standard deduction may not apply and tax rates will be higher.
Yes bro you are correct.. after 2017 IRs removed the tax exemption for foreign nationals ...i have discussed in the latest video pls watch
Well explained...just a add on point regarding the 401K loan. When we repay the loan the interest we are paying will also go back to our 401k account which is the best. Interest is not always 18 to 20%. For my loan Interest rate is 6%.
Bro sorry my bad... u brought the good point yes the interest will go back to the 401k account since u r taking loan amount from ur money... the only disadvantage is if u left the job or lose the job u have to pay the entire amount within the grace period...
Thanks for sharing this.. i will quote in the next video
@@ArthiPrem Agreed. We have to pay balance principal amount. Thanks for your reply....
Interest rate for any loan is APR.
Thank you for the useful insights... My scenario (in H1B)is different employer offers 401k but does any provide contribution towards it.. so decided not going for it. Wishing your family lots of good health, love and prosperity...
Hi Gopal,
But if you are planning to switch to a US based employer who will match 401k by that time you would have grown your 401K.that amount you can roll over to the new 401K.
It must be beneficial if you plan to stay in US for long
401k Loan interest is not 18 - 20 %. It is more like 5 to 6 %. This was 2 yrs back. Now it is even lesser. Another important point is that, all the interest you pay goes back into your 401K account, so you don't lose much from loan perspective. But you won't have appreciation/ depreciation from market movement during the loan tenure.
Bro i agreed your point.. i have corrected in one of my videos to the audience... thanks for explaining it here 👍👍
Nice, thanks for the video. Could you talk Social security / medicare contributions, if its useful for Indians (who wants to go back) ?
Really helpful !!!!!! I was asking about this 401k to everyone and couldn’t understand this concept. Now it is clear. And one of my colleague lost 25k because he put the money in investment and covid hit him hard😭
Yes true ... even happened many of my friends too
COVID hits everyone’s life 😞😞 sometimes i think its better leave the money as it is instead of invest some shares or bonds
It will come back. When the market is low, that’s when you put in money. If you now cash out from the indexes, then it’s loss. As long as you continue to hold the index units, it’ll come back up in the next few years.
Very useful information. Thanks for the video.
Thanks bro🙏
Thank you for the useful information 🙏 .
I never enroll 401K . I’ll do it soon
Sure sister... you should do it 👍👍👍
I am happy to inform u guys that my daughter got offer letter for job and this is a timely information for her, because it was mentioned in the offer letter,thank u 🙏🙏
Thanks for the very informative video..it clarifies most of the questions. Adding to this rupee appreciation also helps when you are withdrawing money in n number of years...it may also compensate the withdrawal penalty.
Yes definitely... good point u brought bro 👍👍
Good information and I am working for this 401k" Empower company" this is second largest company in US
Thanks bro🙏
@sharath kumar in which team you are working now bro?
@@themanindian sorry bro I can't disclose. it is public channel
@@sharathkumar2099 that's good... I'm currently part of money out team
@@themanindian which location
Appreciate your good work!
Thanks🙏
Few employers provide loan options,
It might giv the employee options to take 2 loan or 1 loan or no loan. It all depends on the employer.
Great video, I think you can stretch the point where earnings will grow a lot which is great reason to contribute to these retirement account and additionally company match as well.
Thanks brother and sister🙂👍
It is a retirement fund not investment fund. Investment of 401K should be made with utmost caution.
Hi bro, investment with caution... but that is one of the key point in 401k
You can invest safely in mutual funds if plans are available by employers....you can invest the employers contribution and get the benefits from it.. definitely for long term investment is the best option
Its my opinion bro
@@ArthiPrem correct. Long term mutual funds is the best option. Very good. That is a very valid point. Safe and also a way to save money. 👍
I'm located in Singapore and planning to invest in US Stocks and I don't see any UA-cam channel in Tamil, so it could be good opportunity
(You can see many Tamil UA-cam channel for Indian market, stocks)
Very useful information
Could you please make a presentation on personal savings Avenue for H1B holders
Sure 👍👍
If no profit leaving the entire amount in case of coming back, whatever take back is good know
Though penalty and interest
Sorry uncle did get your question
Can u pls ask again?
In India PF have 8.5% interest, US not have any interest or stock value, what the use of putting money in 401k,
withdrew 401k frequently and put fixed deposits at least give 2% interest in USA or India get 8%
401k gives National average return 4% annual all 401k goes investment by default, we have option to change investment plan covered in video too
SM A you have not understood the 401k. 401k guaranteed will give you 3 to 4% but if you invest in equity the returns are 12% to 16% and you get match from your employer. But this returns you might get if you continue for long term
@@sma9955 the amount is deposited in stocks and we get returns from it as well
Really informative ... keep going
Thank you sister 🙏🙏
Thanks for explaining everything clearly.
Very very useful information. 🙏🙏🙏🙏
Thanks bro🙏
Super topic bro... Most of the people have various questions about 401K! Bro, As you said, I resigned from my job in 2019 and returned to India. I left my 401K account as it is and I had invested in the share market. So far the growth is appreciable. Can I leave this amount invested in shares as it is or any procedure to change/convert/withdraw the 401K account? Please reply... 🙏
Thanks bro.. if u r asking me this is the bad time to withdraw 401k if we did investment through 401k.... because the stock market crash badly... you can wait one more year the things will get better
Arthi Prem, Can I leave it invested even I am not working in USA? Will there be any complications in withdrawal in future?
You can leave it as investment no problem
But when you withdraw you need to pay the tax as non residential foreign nationals
Can you post some videos on US Stock, ETF, US Company analysis/Earnings, Stock screening, ..... ?
A good very informative video. The only scenario missed is what is recommended to those whose employer don't contribute to 401K? And some explanation regarding 403B would have been helpful.
Great point .... thanks bro for your input 👍👍
Prem 10% penalties 2 continues year if we do early withdrawal. i went through on small amount and got that experience
Yes bro we have 10% penalty for early withdrawal... could you please explain what is 2 continuous year which u meant?
what about the charges for your 401K maintenance which is calculated based on your invested amount every year, compounding Inflation of 2.2% every year? The info is great but which decision is better is questionable. On top of that if you are working in usa for 10 yrs it is obvious that you will be in higher tax bracket, so I am not sure if it is really a good choice to invest in 401k, if you planning to return to your country. Correct me if I am wrong.
Bro valid point you brought here
If we have big amount in 401k and try to take it out it will end it up huge tax bracket... so we can withdraw upto the current income tax bracket and withdraw the remaining amount in the next year as a foreign nationals... but there is around 4k tax deductions for foreign nationals and after that 30% flat.. we should be plan wisely
I have a 401k account for 3 years. i would like to Hardship withdrawal to take the money out of 401K. But looks like complicate procedure ( requires document evidence). Does anyone withdrawn 401k (Hardship withdrawal)? If so, please share your experience
Very nice ..... very helpful....
Thanks for the info .. in 401k plan which is best traditional or Roth ??
You both are amazing !
Thanks🙏
Nice video , can you explain any other investment in USA? , do the banks have fixed deposit? , how can invest our monthly savings?
Bro discussed those points in the below link, pls watch and let me know your comments
ua-cam.com/video/B04dZvl_EIs/v-deo.html
If you move to India end of the year and planned to withdraw 401k following year, hope your tax.status will be non resident (30% flat tax rate). Please clarify.
Thanks bro .. you brought the good point
For any nonresident alien they will withheld 30% tax bracket... but you can do the tax return and work it out the refund if eligible using any tax consultants
Also there is a personnel exemption for 4,500 $ no need to pay tax
so we can have many ways to withdraw the money
Still 10% penalty applicable if u r less than 59.5 years old
@@ArthiPrem Actually no more personal exemption since 2018. www.irs.gov/individuals/international-taxpayers/nonresident-alien-figuring-your-tax
But there are other ways to strategically withdraw the money with no penalty over a period of time. Check out "Roth Conversion Ladder" strategy. I have explained this in "IRA / ROTH IRA" video in my channel.
Roth IRA pathi sollavae illai. Can you share it in another video ?
Definitely sister
We will cover IRAs in the upcoming videos 👍👍
Thank you so for this video, very useful and well explained, I will definitely share it to my friends.. 🙏
Thanks bro🙏
Thank you bro 😊😊
401 k is great for the last 10 years my wife and I have contributed .upwards of 600 k and I have another 25 years of service long way to go
Good for you. Many do not realise the importance of maxing out 401K from day 1. This increases our savings rate and also will help us to get to achieve our financial freedom sooner in life.
Investment Insights especially in the last 10 years , the index has out performed
Great video. Very clear and easy to understand. My question is that, do I get any advantage, if I leave the money in my 401k account even after I leave this country and withdraw it at the age of 59 or is it better to withdraw it right before leave this country?
Did you find answer for this question ? Have same question
Fantastic explanation
Thanks🙏
What is the future of kids born and growing here....I know education is expensive how much it could be? Can you make video about that....
Definitely nice topic thanks sister 🙏🙏🙏
On average, we should be planning for 200K per kid for a college degree here in USA.
Hi bro.. if possible , please share a video on how to claim social security benefits for people who worked in H1B visa and returned to India
Prem, thanks for the video. Is Roth 401K better than normal 401K? What’s your opinion?
It depends. If you think that you'll be certainly in a much higher tax rate when you retire than what you are currently in, then you should have at least some Roth 401k if not all. You should note that Roth 401k capital gains are also tax-free. But, if you think that you'll be a lower tax rate than what you are right now, then you can get away without Roth 401k. IRS tax changes over future years will also dictate your strategy. A lot of folks believe that we are in one of the lowest tax rates right now, which suggest that we should take advantage of Roth 401k. In the future, overall tax rates might go up.
Praveen Kumar thanks 🙏
Please post about HSA and it can be used for college loans
thanks for the info, especially in the context of the typical "leave US in 10 years" - I have that mind set too. LOL.
question: when I withdraw 54k, I am not only going to pay higher tax on the 54k but also on the 90k salary. for example, if the tax bracket for 90k is 20%, I pay 18k tax. if tax bracket for 144k is 25%, I pay 36k tax, of which 22.5k is for the 90k salary. so, that's a loss of 4.5k right?
After I move out of country, I was thinking to withdraw a smll amount (10,000) every year to be in the lower side of the tax bracket.
Is there any limit how much max we can invest in 401k and does this maximum limit amount save tax also in that year apart from savings for future
great info, thank you, How about if employer doesn't contribute anything towards 401k? Is it still beneficial?
Bro you can open IRA account in that case because IRA account will have more investment options
@@ArthiPrem But does it still Beneficial without employer contribution ? What will Benefit on IRA compared to 401K ?
@@ArthiPrem Bro good explanation. Can you please share the 401K excel workout calculation sheet ?
Thanks for the Clear explanation 👍😊 just curious...are you CPA(CA in India)?
No sister.. we are sharing that what we are learning
Hello, Thanks for the video. I guess one point worth mentioning. If I’m not wrong, the interest you pay to the loan from 401K goes to your account only. If it right ?
Your info is wrong. An individual can open a 401K. A person who works on 1099 can open a solo 401K.
Bro i meant that who is working on H1B will not be able to open 410k account on own
Whereas self employed can open 401k account which is not possible for H1Bs
Please correct me if i am wrong
Bro .. did the retirement age increase recently? I thought earliest we can withdraw without penalty is 62 .
I do not have a US checking account. I have an active 401k. How to withdraw the money?
Interest rate for 401k need not be 18% - it can be 4 or 5%
Yes bro agreed.. i have already corrected to the audience... your point is correct 👍👍
Hi Prem
How to withdraw money from 401k he returned from US. There is no option available online
Hi sister
Just contact your 401k plan providers
As we mentioned there will be penalty if you have withdrawn before retirement age plus tax
@@ArthiPrem Thanks anna
@@ArthiPrem For early withdrawal, along with Penalty will they deduct Tax too. Or we have to declare that while filing taxes
Prem, do you think its profitable even if employer doesnt match anything
Hi bro
Honestly i prefer IRA rather than 410k if employer didnt match
The below video will be useful for you
ua-cam.com/video/dsavdJovV_4/v-deo.html
Well explained!
Thank u sister 👍
Awesome job! Need small clarification please, as we can invest in 401(k) money, is it mandatory to withdraw after we go to India? Or can it get accumulative for few years and then with withdraw? Is it possible please confirm.
Thanks sister🙏 yes its not mandatory to withdraw immediately after left from usa
There are several options
You can keep till your 55 years old and said we are going to retire and withdraw without penalty
We can withdraw after some years say whenever we need only small portions or entire amount... its wise to withdraw small portions to get the less tax bracket but we have to pay penalty...
Hope we have answered your question 😊
Arthi Prem suppose if I go back to India and withdraw after few years a small amount and if I am employed in India..will my salary india be included in tax bracket to arrive at the tax rate for my small amount of 401k with drawal. For eXample, if I get 25 lash in India and I withdraw $5k , will my tax bracket become $5k+25 lakhs or it will be just $5k
@@nellaikannan3221 Enakum ithey kelvi iruku.
@@nellaikannan3221 good question. Also how can we withdraw partially if we are with the same employer? Is the money credited to bank account or how does it happen?
@@nellaikannan3221 you will be in RNOR status for 2yrs when you return, where you'll not be taxed in India on the money you bring from usa. After 2yrs any money you withdraw will be double taxed.
Banking sector la finance field la jobs epadi sollunga naa romba nala kekuran and India la neraiya paeru arts thaan konjam sollunga help aah irukum
Kandipa bro... sorry somehow miss pannitom.. definitely will do in near future videos
Super explained
Thanks🙏
Thanks for ur info.. but we can open IRA by ourselves without employer's approval rite ?
Yes you are correct bro 👍👍
Thanks for the info! Heard that after the 60yrs if we aren’t withdrawing then would there be monthly installments paid to us? Heard that won’t be taxable. Is it?
401k is taxable at withdrawal, Roth u pay tax when I contribute and not taxable at withdrawal. U need to setup a withdrawal plan to take money out
your force to withdraw the money at the age of 72 until then you can defer your withdrawals
I had a thought when I was watching your video. Say if I have $54,000 in my 401K account and I leave the US. What if I withdraw a limited amount say, $19,000 every year from my 401K. Considering I will be filing the tax as MFJ. This means my remaining money will continue to grow in my 401K as well as I will be paying very less tax while withdrawing from my account. Do you think this is a better option?
Better option is to follow "ROTH Conversion Ladder" strategy. Check this out for details on this strategy: www.madfientist.com/how-to-access-retirement-funds-early/. I have explained how we can use this strategy when we move back to India in "IRA / ROTH IRA" video in my channel. Check it out if you are not able to follow madfientist's article.
Do we have to pay a flat tax rate of 30% if we go back to India and decide to withdraw 401k from there as we become a non resident alien?
Yes bro
Its flat 30% as a tax rate and you have to pay 10% penalties if u withdraw before retirement age
@@ArthiPrem Thanks bro
Hi
Tell me about 2 or 3 times people apply for unemployment benefits so they can after retirement how much money they can receive from social security office
Perfect!
Thanks bro🙏
Great job explaining! Love your videos. Have a question though - all the amount in 401k is already invested in stocks and bonds, right? but why did you say "neenga vena invest pannalaamnu". Puriyalai! Can you please explain what you meant by that? Thanks!
cbe dude There is no need to invest in anything. One can just keep it as cash in their 401K without buying any equities or bonds.