Watch: FAQ on Financial Planning for NRIs Returning to India — 401(k), IRA & Social Security Explained

4:13 Phone number where you can still get calls you know the messages and so on on the Google Voice app on any phone while you're living outside as long as you have an access to the Wi-Fi or a data you can reach out or you can make calls to us or receive the calls as well as you know the messages with that said since this is a v i based phone not all the financial recognize that as an actual phone and has security measures where they can't send the OTP the onetime password for you to access your financial accounts so with that in mind it's always a good idea to test it out you know while living in us so you can create a Google Voice number and try to see if that financial institution would allow to send an OTP to those Google Voice number you know which you can still access via email and so on to see if it's working if it's working then it's great you can transfer or you can put your phone number to Google Voice and you still have access

5:14 To that without paying a recurring monthly fee the other option is you can check if you have an option to receive otps on an email instead of a phone number so that could be another option so that you can still access your financial institutions the second one is regarding the credit cards I think it's still a good idea it's my personal opinion to have a credit card that does not have a foreign transaction fee which can benefit or which can be helpful when you traveling outside of you know India or the place that you're living in and you still have to do do some foreign transaction so I think it's still good to maintain you know from a trade history perspective from the benefits of the credit cards you know from that perspective it's still good to have a credit card that you can

6:14 Have access to and you can maintain and you can pay off so from my perspective it's still good idea to maintain a credit card as long as you can the other one is regarding the stocks brokerage account it's up to the individual personal choice keep in mind especially when you are trading or when you are doing stocks and options and so on you do have to file taxes and without U being in us when you are depending on your you know whether you're green card holder Citizen and so on you don't have to file taxes if there is not anything right I mean as a resident non-resident alien or something outside however if you trade I mean there's a money that is withheld by the brokerage accounts as a non-resident alien and you have to file taxes to claim those money you still have

7:14 Access to these kind of stocks from other brokerage accounts in other countries so it's up to the personal choice whether they still want to continue to trade the stocks and options through the financial institutions based in us so that's a personal choice now moving on to the retirement accounts especially the 401K accounts Ira accounts Ro accounts what to do do we want to contribute after we leave what should we do these are like another common questions that you hear from people who just moved here or thinking of moving back to to out of us and this is my personal you know choice or the way I looked at it so first of all you know when somebody is starting in their career there are some employers who do match 401K

8:16 Contributions for example some employees does 5% 6 person 10% you know so on I mean it's just a a percentage based on your contribution that they would also contribute so from my perspective if there is an employer matching contribution benefit that you have please go ahead and contribute that amount at least because otherwise you're leaving money on the table so if an employer matches 5% of your salary contribute at least 5% of your salary to your 401K fund so that way you can get the matching and then the 5% of that money would be coming into your 401k account which you don't get unless you contrib it the second after that matching depending on your personal situation depending on the tax planning and so on it still could be advisable to contribute to either a 401k which a traditional 401k or a Roth 401k 50% here 50% there and so on I mean

9:17 Depending on you are planning depending on your financial situation and so on you can make the decisions how you want to contribute so when you are thinking of moving back to India for example what to do with the 401K funds you can still definitely leave the funds in 401K employer sponsored program itself or you can roll it over to another regular Ira from any of the financial institutions my recommendation is at least if you're leaving the money in the 401k account at least transfer them from the 401k account to an IRA account just because of the options that you have available to invest in different funds is much more much more options much B funds stocks that you can have available u in in a nonemployer 401k plan as well as

10:17 The cost is much less you know compared to like the the employer sponsored 401k plan the expense ratio of the funds are much higher in the employer sponsored 401K funds compared to the other IRS like Vanguard Fidelity T swap T trade and so on which you can provide more flexibility in terms of the funds that you can access to and also the expense ratios that you have to pay for these funds in terms of you know withdrawing the money that is definitely an option if you don't have any plans to come back or if you don't see your children coming back or whatever reason right I mean you just wanted to get it done you don't wanted to keep that in your mind about some funds leing living in the US accounts in that case there's also like some tax planning that you can do keep in mind depending on how long you lived abroad and when you return back to India there is the status called

11:19 R no o residents not ordinary residents in which you don't have to pay any taxes on the income that you earned glob during this period so this can be valid for 2 years or up to 3 years depending on when you move back to India so and that would be a good time to you know withdraw the funds because then you don't have to pay taxes on that funds in India because this is like u in that special status you will pay the penalty which is 10% penalty and also the income tax based on the total income that you're earning so you know which could also be beneficial even if you're withdrawing let's say if you have 50,000 in your 401k fund let's say you withdraw 25,000 on first year and 25,000 second year so let's say you have the horor status for two years so you don't pay any taxes in India you might pay only the penality which is the 10% of the 25,000 and then the whatever the

12:20 Tax bracket that you fall in for the total income that you have to pay which could still be beneficial than what you would have to pay when you're in a higher tax bracket so you know definitely there could be some tax planning when you're trying to withdraw and plan it but keep in mind if you are withdrawing money outside of the RN status like you know let's say you're withdrawing on third year fourth year fifth year so that you're keeping it below certain threshold so you don't have to pay any taxes keep in mind you have to pay taxes for that income in India because you are no longer in an ronr status and U that income would be taxed yeah the other option that people people do is you know rolling over instead of from a 401k to Ira they might roll it over to a Roth IRA again you know it could be beneficial if you have the funds in us and you're coming back because Roth you know you don't pay taxes on the earnings of your contribution right so you contribute certain money what about the growth

13:20 So let's say you contributed 10,000 and it became 100,000 you don't pay any taxes for them from the withdrawal so this 90,000 that that was gained you don't have to pay taxes that's a beauty of the RO keep in mind the RO is only recognized in us it is not recognized in India so in the future when you're withdrawing the money and if you're living outside of the US it's considered as an income and it could be taxed as per the income and not recognized as a ro irm money so keep that in mind when you are planning for rolling over your IRA funds to Roth IR you know because it could be beneficial to roll it over when you are in this Ron status but in the future when you're withdrawing it it might not get the same benefit as you would like if you're living in us because this is like Ro funds so keep in mind plan plan it accordingly and depending on your personal situation whether you want to withdraw leave it there and let it grow it's up to the personal

14:24 Choice the other common questions that I see is about social security benefits who qualifies for it can a non-us citizen or a green card holder still be eligible to get Social Security benefits while they're not living in us and so on so the for the first one who is qualified for getting the Social Security there is a a long list of you know requirements but primarily it's a person who has has worked for you know at least certain time to earn 40 credits you get about four credits per year so you're talking about approximately like you know 10 years of work life to get 40 credits again you know each year is a calendar year so and you need to get certain money to get some number of credits so typically it's if you worked in us for 10 years and you

15:25 Contributed for Social Security you would be qualif fing for social security benefits and when you get the benefits is when you retire and you know it could be like an early retirement or late retirement and that determines the social security benefit and how much you can get you can see all that information on the Social Security ssa.gov you can do all the calculations how much you contributed and assume that you don't contribute anything in the future like you put $0 and see how much you are expected to get once you retire early retirement later determent all the calculator calculations are available on the website please check it out to see how much money you can expect based on your contributions to the Social Security plan keep in mind you know future nobody can knows the situation of the Social Security but this is based on the knowledge of what we have right now you know what you can be qualified so the next question is Can a nonu citizen or a non-green card holder still be eligible to receive the

16:26 Social Security benefits while living outside of the US absolutely yes if you qualify and completely meet the 40 credit requirement irrespective of your residence and irrespective of your citizenship because there are certain rules between different countries you would be eligible for the Social Security benefits that would be available even if you're living in India you could still get the Social Security benefits as per the current guidelines that was suggested by the ssa.gov lot of information is available in the comment section below please check it out so you would still be eligible but the money that you get would be tax as a as the income so the bottom line is you don't have to be a US citizen or a green card holder to get the soci security benefits while living outside the outside the US I think that's all folks this is just my personal perspective of these commonly asked questions feel

17:27 Free to reach out would love to hear your feedback and any questions that you might have you know feel free to comment I would be looking at it and answering those and you know thanks for watching hope this information is helpful and feel free to subscribe to the channel thanks have a great day thank you all for joining us on this insightful Journey Of Da return if you enjoyed this episode and want to explore more stories and expert advice make sure to subscribe and hit the notification Bell don't forget to leave a comment below with your thoughts and experiences by the way check out the links in the description below for our Facebook group and social media for updates and engaging discussions as well as connecting with fellow Desa wrers thank you once again and until next time may your Desa written journey be filled with joy growth and endless possibilities