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US — VISA HOLDERS

401(k) for visa holders: eligibility & what happens if you leave

Yes, you can generally join a 401(k) on a visa — the real complexity is what happens to it if you leave the US. Get the eligibility basics, your options, and a ballpark estimate of what cashing out would cost.

Am I eligible to contribute?

401(k) eligibility is based on being a W-2 employee earning US-source income — not your visa type. If your employer offers a plan, you're generally eligible on the same terms as any coworker, whether you're on F-1/OPT, H1B, TN, or another work-authorized status.

What's your situation?

This is what matters — not your status when you contributed. Leaving the US changes your status, not the penalty.
Not tax or financial advice. This is a rough estimate of penalty and withholding exposure only — it ignores state tax, tax treaty reductions, and your actual final tax liability, which depends on your full return. Talk to a tax preparer before deciding.
If you cash out

Balance
Estimated amount you'd receive
This is withholding at the time of distribution, not necessarily your true final tax bill — especially for resident aliens, where 22% is just a default estimate and your actual liability depends on your total income and bracket. Nonresident aliens: the 30% rate may be reduced by a tax treaty with your home country, claimed via Form W-8BEN. Neither figure includes state tax.

Your three options when you leave the US

1. Leave it where it is

You can generally leave your 401(k) with your former employer's plan and let it keep growing, as long as the plan doesn't require a minimum balance to stay invested. No immediate tax event.

2. Roll it into a Traditional IRA

A direct rollover to a Traditional IRA is available regardless of visa status, avoids immediate withholding, and keeps your money growing tax-deferred. This is usually the better move if you expect to return to the US someday or just want to defer the tax decision — make sure it's a direct rollover (funds move institution-to-institution) rather than a 60-day indirect rollover, which risks withholding and penalties if you miss the deadline.

3. Cash it out

The most expensive option in almost every case. On top of losing the tax-deferred growth, you'll generally face the 10% early withdrawal penalty (if under 59½) plus withholding — either standard federal withholding if you're still a resident alien, or the flat 30% nonresident alien rate if you've already left. Use the estimator above to see roughly what that costs before deciding.

The misconception worth correcting: many people assume that once they leave the US and become a nonresident alien, the 10% early withdrawal penalty no longer applies. It generally still does — becoming a nonresident alien changes your withholding rate, not whether the penalty applies at all.

One more thing worth knowing if you're deciding whether to even contribute in the first place: if you leave before your employer match fully vests, you lose the unvested portion — check your plan's vesting schedule before assuming the match is fully yours.

Common questions

General guidance referenced against IRC §1441 (nonresident alien withholding), IRS Publication 515 and 519, and multiple retirement-plan administrator resources (Guideline, Human Interest). Not affiliated with the IRS or any plan administrator — tax treaty rates and final liability vary by country and individual situation; verify with a tax preparer before making a withdrawal decision.