Is an IRA useful for Indian citizens? What would an IRA be used for, and why would I want it?


An IRA is a tax-advantaged retirement savings account; if you're a US resident you can contribute to one from your pre-tax income and - as with a 401k - the distributions you get from it when you reach retirement age are being taxed as income at that point. A typical use for an IRA would be that you want to put more into retirement savings than the IRS limits per year as you can add another $5000 to IRAs per year, provided you earn more than $5000.

There is also a Roth IRA that you fund out of your post-tax income, but distributions you take out of a Roth IRA are not taxable.

Either of them probably only makes sense if you are a US permanent resident or citizen. I'm pretty sure you can contribute to one if you're here on a non-immigrant visa but I am not sure if the favourable tax treatment extends after you've stopped being a resident here.


Depends. If you are a non-US citizen, but a US resident, you can have an IRA account. Useful in cases where your residency is pending (green card) or you have a work visa, but you expect to become a citizen in the future.


IRA is an individual retirement account, and its a US tax code construct, so I couldn't imagine it having any impact on an Indian citizen. Unless India has IRAs as well, in that, I dunno.

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