401(k), IRA and HSA When You Might Leave

The benefits portal offers a 401(k), an employer match and perhaps a health savings account, and the obvious question for anyone on a visa is whether any of it makes sense if you might not stay. The short answer is that you can use these accounts on any work visa, and leaving does not lock the money away, but the exit has costs worth knowing in advance. This chapter covers what you can open, what each account is worth, what happens to it when you leave, and the questions to weigh before you choose.

Your visa does not decide whether you can join

Eligibility for a 401(k) is set by the employer's plan, not your immigration status. If the plan covers employees in your role, you can join on an H-1B, L-1, O-1, or in F-1 practical training. The account belongs to you, and your own contributions are always yours; employer contributions may vest over time under the plan's schedule.

For 2026 you can contribute up to $24,500 of your pay. Most plans let you choose traditional contributions (deducted now, taxed when withdrawn) or Roth contributions (taxed now, tax-free when withdrawn under the rules), or a mix.

The employer match is usually the strongest reason to join, because it is extra pay you receive only if you contribute. Here is what steady saving with a match can build over a typical first stretch of US work:

Putting in $1,500 a month between you and your employer for 6 years, at an assumed 6.0% yearly return, adds up to $108,000 of contributions and about $128,972 in the account, of which $20,972 is growth. The 401(k) contribution and match calculator shows how much of your own contribution unlocks the full match.

IRAs: you need US pay

An individual retirement arrangement (IRA) is an account you open yourself. Contributions need taxable compensation, such as wages. For 2026 the limit is $7,500 across all of your traditional and Roth IRAs.

Publication 519 says a nonresident alien can deduct traditional IRA contributions only with taxable compensation effectively connected with a US trade or business, which in practice means US wages. A deduction can also be reduced if you are covered by a workplace plan. Roth IRA contributions also need taxable compensation and are limited by income (Publication 590-A), but Publication 519 does not address Roth contributions by nonresidents directly, so a nonresident should confirm eligibility with a preparer before contributing. Two practical points: some brokerages restrict accounts for nonresidents or for owners who later move abroad, and an account you cannot manage from overseas is a real problem. Ask before you open one.

The HSA: health money that also behaves like savings

A health savings account (HSA) is open to anyone covered by a high-deductible health plan who has no other disqualifying health coverage, is not enrolled in Medicare and cannot be claimed as someone's dependent. There is no visa or residency condition in Publication 969. For 2026 the limits are $4,400 for self-only coverage and $8,750 for family coverage.

Contributions through payroll avoid income tax, and withdrawals for qualified medical expenses are tax-free. Publication 969 calls the account portable: it stays with you if you change employers or leave the workforce. Money taken out for anything other than medical costs is taxed as income plus an additional 20%, unless you are 65 or older or disabled.

What happens to the money if you leave

Leaving the US does not force you to cash out. A 401(k) can usually stay in the plan, or be rolled into an IRA, and keep growing. The costs appear when you take money out as a nonresident:

• Withholding. A distribution from a traditional 401(k) or IRA to a nonresident alien is withheld at 30% by default, unless a tax treaty with your new country of residence lowers the rate and you give the plan a Form W-8BEN to claim it.
• The early-withdrawal tax. Before age 59½, an additional 10% generally applies. Leaving the US does not remove it. The plan does not withhold it; you owe it with a Form 1040-NR.
• The final tax may differ from the withholding. Publication 519 treats a payout attributable to work you did in the US as effectively connected income, to the extent it comes from contributions, taxed at graduated rates on Form 1040-NR, so some of the withholding may come back when you file. You can also ask the payer, on Form W-8BEN or Form 8233 before the payment, to withhold at graduated rates on that part.
• The other country. Your home country may tax the payout, or the yearly growth, under its own rules, and may not recognize a Roth account's tax-free status at all. A treaty is what coordinates this.

Roth contributions you made from already-taxed pay change the arithmetic, which is why the choice between traditional and Roth deserves a calculation of its own if you expect to leave.

Questions to weigh before choosing

• How long you expect to stay, and how sure you are. A match you will vest in is worth taking in almost any case; the traditional-or-Roth choice depends more on the horizon.
• Your tax rate now versus later. Traditional contributions save tax at today's rate; if you will withdraw in a country with low tax or a favorable treaty, that can be valuable. If you expect higher taxes later, Roth may suit.
• Your country's treaty, for both the US withholding rate on pensions and how the country taxes US retirement accounts.
• Access from abroad: whether the plan or provider will keep serving you at a foreign address.
• The cushion first. Retirement money is hard to reach without cost; chapter 6's cash reserve comes before maximizing these accounts.