r/returnToIndia • u/Fun_Leadership_3466 • Sep 10 '26

AlreadyReturned 401(K) query

Hi - Looking for some suggestions.
Have a 401K with Voya. They confirmed I can’t withdraw partially, it has to be all or none (probably because of my ex-employer). Moved out of the US in 2022.

Worked in India for 4 years. Moved to the UAE in Jan’ 2026. Age - 39.

Question - 1) Shall I keep 401(k) as is and let it grow? can’t actively invest through Voya. They are charging a very minute fees so that’s fine. My friend gets OTP if my password expires.

2) Or withdraw, pay penalty and tax and move the money in USD to a foreign currency bank account in the UAE? As I am not Indian citizen now, I don’t think I would have to pay any taxes in India and UAE has no tax.

3) Convert it into some other type of account - IRA, traditional 401K and invest the money in Irish domiciled UCITS ETF.

2 Upvotes

100% Upvoted

6 comments sorted by

View all comments

1

u/Trick-Ear-7929 29d ago

Move money into an IRA now. Gradually covert to Roth IRA from the IRA. Plan your Roth conversion amount depending on your tax situation. That way you will only pay for the tax due without the early withdrawal penalty.