IRA vs 401k - Indian Cricket Fans

Both are not that much of use if you don't live there longer. You can always with draw money before you turn 60 (which is when you will get the full benefit). But you will lose a lot of money on taxes.

401K Withdrawal Rules

With rare exceptions, all 401K withdrawals are taxable as ordinary income. An additional 10% early distribution penalty tax will be assessed if you have not reached at least age 59 ?? when you take your distribution. Several exceptions to this penalty include:

You die and the account is paid to your beneficiary
You become disabled
You terminate employment and are at least 55 years old
You withdraw an amount less than is allowable as a medical expense deduction
You begin substantially equal periodic payments
Your withdrawal is related to a qualified domestic relations order

IRA early withdrawals

When you take money out of an individual retirement account before you reach age 59 1/2, the Internal Revenue Service considers these premature distributions. In addition to owing any tax that might be due on the money, you'll face a 10 percent penalty charge on the amount.

But there are times when the IRS says it's OK to use your retirement savings early.

Two popular, penalty-free withdrawal circumstances are when you use IRA money to pay higher-education expenses or to help purchase your first home.

OK for school
When it comes to school costs, the IRS says no penalty will be assessed as long as your IRA money goes toward qualified schooling costs for yourself, your spouse or your children or grandkids.

You must make sure the eligible student attends an IRS-approved institution. This is any college, university, vocational school or other post-secondary facility that meets federal student aid program requirements. The school can be public, private or nonprofit as long as it is accredited.

Once enrolled, you can use retirement money to pay tuition and fees and buy books, supplies an

-- ALso it depends on other factors how much company is sharing etc etc.. there are tons of materials on the internet.

Source: http://www.indiancricketfans.com/showthread.php?t=286751

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