Retirement basics — your 401(k) and the Roth IRA

Who this is for

Nepalese workers in the US whose employer offers a 401(k) they haven't enrolled in, and anyone sending money home every month who hasn't started saving for their own future here yet. Money sent home supports family today — retirement savings support you later. Strong households plan both deliberately.

The 401(k) — start with the match

• Your employer takes the amount you choose out of each paycheck and puts it in your 401(k) account, before tax in a traditional 401(k) (you pay tax when you withdraw in retirement).
• Many employers match part of what you put in — for example "100% of the first few percent of your salary." The match is extra pay you only get if you contribute. If you enroll in nothing else, enroll enough to get the full match.
• Contribution limits change every year — check the current figure on IRS.gov rather than a number in any article (including this one).
• The money is invested in funds you pick from the plan's menu. If the menu overwhelms you, a target-date fund (the one named near the year you'd retire) is the standard one-choice answer.
• Taking money out before retirement age generally costs tax plus an early-withdrawal penalty — treat the account as untouchable, not as savings you might dip into.

The Roth IRA — your own account, tax-free growth

• You open it yourself at any major brokerage (no employer needed) and contribute money you've already paid tax on. Growth and qualified withdrawals in retirement are tax-free.
• There are income limits for contributing directly, and they change — check IRS.gov for the current thresholds.
• You can generally withdraw your contributions (not the growth) without penalty, which makes a Roth more forgiving for a newcomer than it sounds — but the point is to leave it invested.
• Holding-period rules ("5-year rules") apply to the growth — read the IRS page or ask a tax preparer before any withdrawal.

Which first?

One possible planning framework is to compare your employer match, emergency savings, IRA eligibility, debt, remittances, and tax situation before adding more retirement contributions. A 401(k) match can be valuable, but the right order is individualized; use a fee-only advisor or trusted tax preparer for personal guidance.

If you might not stay in the US forever

• Do not assume the account must be cashed out if you leave the US. Plan options, IRA access, rollover choices, taxes, treaty issues, and provider rules are case-specific; get cross-border tax advice before moving or withdrawing retirement money.
• Keep your address and beneficiary details current with the plan so the account never loses you.

Safety — the schemes that target our community

• No real investment "doubles your money" on a schedule. WhatsApp/Facebook groups promising guaranteed returns, crypto "doubling," or pooled schemes run by a friend-of-a-friend are how diaspora families lose savings. A 401(k) match is the only legitimate "free money" in this guide.
• A licensed US broker or plan provider never asks for your login codes over the phone.