GLOSSARY · VISA-HOLDER FINANCE

Roth versus traditional contributions

Traditional contributions cut tax now and are taxed when withdrawn; Roth contributions are taxed now and come out tax-free if the rules are met. The better choice depends on your tax rate now versus at withdrawal, which for someone who may leave the US depends on where and how they will be taxed later.

Also called: roth or traditional, pre-tax vs roth

COMPUTE IT WITH YOUR NUMBERS

Roth vs traditional if you might leave the US →Roth or traditional 401(k) if I might leave the US?Roth conversion calculator →How much should I convert to Roth between 60 and 73 without a Medicare surcharge or a Social Security tax spike?

LEARN IT PROPERLY

CHAPTER · ARRIVING AND WORKING ON A VISA · FOUNDATIONS401(k), IRA and HSA When You Might Leave CHAPTER · TAX PLANNING FUNDAMENTALS · FOUNDATIONSHow Tax Brackets Really Work

SOURCES

Roth comparison chart. Internal Revenue Service.

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