My understanding based off reading a bunch of questions on this site, and elsewhere, is that the standard advice for an American citizen, working in, and planning to retire in the US, is as follows:
- Save a fair amount in 401(k) form, taking advantage of employer matching when available
- Then prioritize Roth IRA up to yearly maximum
- Then fund your 401(k) further, up to that maximum
- Invest any additional funds in miscellaneous accounts.
The question is what, if any, changes to this strategy would be recommended for non-residents who are likely to leave the country before retirement?
Suppose I'm happy to leave the funds in these accounts until retirement. My guess would then be that pre-tax 401(k) accounts (or pre-tax IRA contributions) become more attractive options. The logic being that if I work say 5-10 years in the States, then leave for a European country and work there until retirement, the US retirement income is likely to be relatively low and taxed accordingly. (I assume that there is no double taxation.) Thus maxing out pre-tax 401(k) contributions seem to be the way to go - even if there is no employer matching. Is my thinking correct here, or are there other factors I should know and care about?
If it helps, my background is this: I came to the USA as a PhD student, finished the degree, and am about to start a well-paying job. Both my position and work authorization are temporary affairs, and I'd say the probability of me staying long-term is at most 35%. My employer offers both pre-tax and Roth 401(k) options, but no matching in the short term (there's a vesting period).