Retirement accounts on J1 waiver

[AirlineFood]

We are a resident couple who will be undertaking 3 year J1 waiver positions (which converts us to a H1B visa). After that we will have the option of staying on in the US or returning to Canada. Right now, it's looking more likely that we will return to Canada but some uncertainty remains.

With that in mind, would we be better off focusing our 3 years on debt repayment over a 401k with a match contribution? Would having 401k money in a foreign country for 30 years be a hassle? Or would that be leaving money on the table?

[jfoxcpacfp]

There are really too many unknowns to give a clear answer and I'm not sure what you mean by "having 401k money in a foreign country for 30 years". Also not sure how you would be "leaving money on the table". More information about your student loans, 401k plan, future work plans, income projections, etc. would be helpful.

[AirlineFood]

Yes, it's quite vague because much of it is still hypothetical. Combined student loans will be $370k averaged at 5% interest with $450k combined pretax income.

The money on the table refers to a presumed 4% 401k match for 3 years resulting in a rough total of $150k combined after three years (18k personal contribution each + employer match).

I should have phrased my question better. It's less about the paydown loans vs invest question and more about the practicalities in paying into a 401k for 3 years when we may leave the country indefinitely after that.

[jfoxcpacfp]

AirlineFood wrote:

I should have phrased my question better. It’s less about the paydown loans vs invest question and more about the practicalities in paying into a 401k for 3 years when we may leave the country indefinitely after that.

Click to expand...

You will not lose any tax benefits or any part of your 401k simply by moving to another country. Depending upon your situation and the brokerage you use, you may be required to roll out of the 401k to an IRA and/or not be permitted to keep the account with your broker of choice. Many do not allow non-residents to maintain accounts but you may be able to get around that by keeping a mailing address in the USA and you can always change to a brokerage that allows world-wide residency. Interactive Brokers is one of the most popular for that reason.

Depending upon your plan, I would definitely lean toward taking advantage of the 401k benefits. Since I don't know your income projection for the 3 years, I cannot advise to the preference of a Roth 401k v. a traditional 401k.

[adventure]

jfoxcpacfp wrote:

You will not lose any tax benefits or any part of your 401k simply by moving to another country.

Click to expand...

Some hassle factor though in keeping a lingering account in the USA after you've moved away, especially if you have bills to pay, and would rather simply have them paid off and move on in live. As I understand the rules, this would also require you to file a US tax return as long as you have the account.

[AirlineFood]

Thanks for the input and perspective. Very much appreciated.