Transfer my 401 K

[panther]

Hi ,

I think I am putting this question at a wrong website (path2usa) .. actualy my question is more for path2india ... jusk kidding

I have 401 K plan from my employer... and have ant 20 K USD in there, Now I want to take that money to India.

I wanted to know how is it done ?

do I need to pay tax ? (i think yes)

penalty ?

Is there any mechanism I can transfer my 401 K plan money somehow to my indian PF (Provident Account) account.

thanks

[smiley12]

do I need to pay tax ?

-- Yes

penalty ?

- Yes

Is there any mechanism I can transfer my 401 K plan money somehow to my indian PF (Provident Account) account.

No. India does not have an agreement with US on retirement accounts

[panther]

Ok another quick questions then, I am in US for another 1 year maximum and would return back to India.

Q 1) I want to know shall I take my 401 K funds with me on return. (Which I would like to ... :D ) What is good option ? Does it benefit if I keep it here. I am not in immediate need of money, but would it be a pain to withdraw later in my physical absence ?

Q 2) Is it wise to put more than the specified amount in 401K this year to save tax ? (E.g. I can put maximum 50% of my salary in 401 K, but my company will match equal share only till me 6% that it if I put 6% salary my company will match the same amount and put 6% from there pocket, if I put 7% my company will still match only 6%. And right now I am putting 15% of my salary to save tax.
What shall I do reduce my share to 6% ? or let it be 15%

I am planning to make a move from US to India in early months of next year like may be by April or May 2008.

[abaner]

if u rollover to a 401K /IRA then u will not be taxed, but if just transfer it into a regular account ie cash it then u pay tax, penalties and also will be taxed in India. so find out if u can roll it over to a international mutual fund accesible in india. tlk to afinancial planner.

ps: no legal advise.

[smiley12]

You can only deduct 15500 for 401 K for this year and may be 16000 next year to reduce your taxes. So witholding 50% of your salary in 401K may not help and inturn you may be penalized to do so ..