401k daca

so for the first time i got a job that offer 401k and i was wondering how does this apply to us. Are we eligible? any special process? what if our daca doesnt get renewd?

well anything in general would be great since i am not familiar with how the whole 401k works!

It's your money. Doesn't matter about your status. It's like a bank, you save a portion of your paycheck to invest.

Always match your employer's maximum contribution. If you don't you're leaving free money on the table. See the example below. There's nothing special you have to do. It's a retirement account set up by your employer. If you change jobs you can roll it over to your new employer.

Let's assume your employer does dollar for dollar matching up to the first 5% of pay.

Example:
Salary: $100,000
Company Match = 5%
Taxable Salary = $95,000
401(k) Balance at Year End = $10,000 ($5,000 that you contributed plus another $5,000 from your employer)

In addition to being a great investment/retirement vehicle, a 401k also serves to lower your tax base since contributions are taken out before tax.

ahh definitely good info, been reading myself so learning alot.

So what would happen if for expample couple years down we are no longer able to renew our daca?

Good question, but I doubt information exists on this topic. You incur a tax penalty when you withdraw the funds before retirement so I assume you'll be able to do the same.

Yea so far that was all i was able to figure out too. so i guess paying that penalty is better than getting nothing back.

It's the same as when you quit your job. You can transfer the money to a new 401k or convert into an IRA.

Make sure you understand that a 401k just like an IRA (which is good to convert after you max out your 401k to avoid early withdrawal penalties and tax deferment) is taxable during payout. Both give you "tax" deferment.

The better option is to sign up for a Roth IRA, because the money you contribute there (your choice) is on your taxable earnings and the money you withdraw X years later (for retirement) is NOT taxable. So you get the huge chunk tax free.

True, but it's generally accepted that your tax rate when you retire will be much lower than it is now.

+1 for Roth IRA only because you know what the tax rate is whereas you don't know what will happen in the future.