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RE: swiss-list: 401 k

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RE: swiss-list: 401 k

From: Louis Perrochon <click for textversion of email address >
Date: Sun, 24 Sep 2000 17:13:54 -0700
X-Mailer: Microsoft Outlook IMO, Build 9.0.2416 (9.0.2910.0)

- How have you/swiss/non-us people been treating this issue ?

I put all the money in I can and I will leave it in the US until I retire
(wherever that will be). If I need the money before that, I'll get it and
pay all necessary US and foreign taxes. It is only 10% extra US tax or so,
that should be compensated by what I save through deferred taxation until
that event happens.

Also, my previous employer (Stanford) matches 250% (i.e. I pay $1000, they
pay $2,500). Even with extra taxes on the whole thing, that is a lot of
extra money. But even without employer matching funds you save a lot on
taxes right now.

- What do you recommend ?

If your employer matches, put in as much as possible. Otherwise, depends if
you plan to use the money before you retire.

- Is it possible to transfer 401K to a Swiss pension system ?

Without tax consequences? I doubt it. But I'd be interested in that. And the
legal situation might change.

- How do you maintain it after leaving US ?

You transfer it to a "roll-over IRA" as soon as you leave the company, e.g.
at E*TRADE or Charles Schwab. Then manage you it over the Internet like any
brokerage account. You can then invest in anything you like. It is still tax
free (you need to make the check payable to your broker, on your behalf), so
you won't pay taxes until you retire.

DISCLAIMER: I am neither a lawyer nor a CPA

Louis

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Received on Sun Sep 24 2000 - 17:14:35 PDT

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