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What Happens to Your 401(k) When You Leave the USA? The 30% Withholding Rule Most People Miss

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You are moving abroad, and your 401(k) is staying behind. What happens to it now? Nothing happens to it automatically — but the tax rules change completely once you become a nonresident alien for U.S. tax purposes. A cash-out that cost 20% in withholding as a resident can cost 30% as a nonresident, plus a 10% penalty if you are under 59½. Whether you are a U.S. citizen moving overseas or a visa holder going home for good, this guide works through the four options, the 30% rule, and the traps most guides skip — with real dollar numbers on a $30,000 balance. First, the Question That Changes Every Answer: Are You Still a U.S. Taxpayer? Leaving the country and leaving the U.S. tax system are two different things. Your 401(k) follows your tax status, not your address. U.S. citizens are taxed on worldwide income wherever they live. If you are a citizen moving to London or Singapore, the IRS still treats you as a U.S. taxpayer: your 401(k) works exactly as it did before, and the 30% non...
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401(k) Employer Match: How to Calculate 50% Up to 6% With Worked Examples

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A "50% up to 6%" 401(k) match means your employer adds 50 cents for every dollar you contribute — but only on the first 6% of your salary. Earn $80,000 and contribute 6% ($4,800), and your employer puts in $2,400 a year. That is the entire formula. The part people get wrong is what happens around the edges: contribute less than 6% and the match shrinks with it, contribute more and the match does not grow, and the match may not be fully yours until a vesting schedule runs its course. The two numbers inside the formula Every match formula has a rate and a cap. The rate (50%) is how many cents the employer adds per dollar you contribute. The cap (6% of salary) is the slice of your pay the employer will match against. A frequent mix-up: "50% up to 6%" does not mean the employer adds 50% of your salary, and it does not mean it adds 6% of your salary. It means 50% of your contributions, on contributions up to 6% of your salary. Capture the full match and the employe...
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No Employer Match? 401(k) or Roth IRA First — and Why the Order Flips

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Your job offers a 401(k) but no employer match, and you have $500 a month to save for retirement. Where does the first dollar go? Without a match, the Roth IRA usually goes first — until you save more than $7,500 a year. With a match, the order is settled: take the free money first. Our guide to retirement accounts covers that order, and it still holds — a match is the closest thing to a guaranteed return in investing. Without one, the two accounts compete on four things: how much room each one gives you, when you pay tax, what the funds cost, and how easily you can reach the money. This guide works through each one with 2026 numbers, and ends with a five-question decision rule. The Capacity Gap: $7,500 vs $24,500 The Roth IRA holds $7,500 a year in 2026. The 401(k) holds $24,500 — more than three times as much. That gap decides the order for most people before tax brackets or fund fees enter the picture. Save $500 a month — $6,000 a year — and the Roth IRA can hold every dolla...
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What Happens to Your 401(k) When You Quit Your Job? The $7,000 Rule Most People Miss

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You just quit your job, and your 401(k) is still sitting with your old employer. What happens to it now? Nothing happens to it automatically — your money stays invested, but you now have four choices, and the wrong one can cost you 30% or more of your balance. Your own contributions are always 100% yours. The employer match depends on vesting. And the rules that decide what you keep — a $7,000 balance threshold, a 20% withholding trap, and a deadline on any outstanding loan — are the parts most guides skip. This guide works through each one with real dollar numbers, using a $30,000 balance as the running example. What You Actually Own When You Leave Every dollar you contributed from your own paycheck is yours, no matter when you leave. The employer match is the part that may not be. Employer contributions vest — become permanently yours — on a schedule your plan sets. Federal law caps how slow that schedule can be, and plans can only be faster, never slower. The two legal maximums...
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