12-27-2001, 12:12 PM
Hi, have been working in the US for an international company for 3 years. They now want me to return to the UK. Has anyone had experience of doing this ... I'm wondering what I will do with my 401K etc Thanks
12-27-2001, 12:12 PM
12-27-2001, 11:30 PM
visa/immigration forum?
I think that this has been discussed to a certain extent in the above mentioned forum, but it's certainly the place where you're most likely to come across people who know.
I think that this has been discussed to a certain extent in the above mentioned forum, but it's certainly the place where you're most likely to come across people who know.
01-06-2002, 04:52 PM
Funny you should ask this - I am researching this question for some friends.
CAUTION I AM NOT A PROFESSIONAL IN THE FIELD OF RETIREMENT PLANNING. THE FOLLOWING IS MY CURRENT UNDERSTANDING OF THE US TAX LAW AND I MAYBE WRONG. PLEASE SEEK ADDITIONAL PROFFESSIONAL ADVICE.
My understanding is that you will be taxed, including an additional early withdrawal penalty tax of 10% on all money withdrawn from a 401K (or other retirement accounts) before you are of retirement age (or die)unless it is placed into another retirement account (eg IRA or ROTH IRA) within 60 days. I do not think that a UK pension plan counts.
Basically you options are
1. leave it where it is. When you are over 59 you will have various withdrawal options available to you.
2. Transfer to a US Simple IRA within 60 days. There will be various withdrawal options available to you at the retirement age.
3. Transfer to a ROTH IRA. You will pay tax on the funds you withdraw fom the 401K. I am researching the possibility that you can do this in a future year (or years) to minimise the tax payable. I will post the result later
All the above options will have additional future UK tax liability issues (If that is where you are a tax resident) on the funds that you withdraw at retirement age.
4. Withdraw your 401K, take the tax hit in the US, but you can offset the UK tax that may be due on those funds by the some or all of the tax paid to the US. I do not know if the tax penalty is a transferable credit.
Not knowing your personal circumstances, how much money is involved or your US and UK tax brackets I cannot suggest the best course for you.
Options 2 & 3 may not be good if your 401K has contributions from your employer in it.
TAKE PROFESSIONAL ADVICE.
Option 4 has the advantage of closing down your finacial ties to the US, especially if you do not intend to return in the future and you do not run the risk of it being forgotten.
Remember, if you do leave you funds here you will have to keep the fund administrators updated with address and death beneficiary changes. If you have a will it might be adviseable to record your SSN in it. That should aid your will executors to access the fund.
CAUTION I AM NOT A PROFESSIONAL IN THE FIELD OF RETIREMENT PLANNING. THE FOLLOWING IS MY CURRENT UNDERSTANDING OF THE US TAX LAW AND I MAYBE WRONG. PLEASE SEEK ADDITIONAL PROFFESSIONAL ADVICE.
My understanding is that you will be taxed, including an additional early withdrawal penalty tax of 10% on all money withdrawn from a 401K (or other retirement accounts) before you are of retirement age (or die)unless it is placed into another retirement account (eg IRA or ROTH IRA) within 60 days. I do not think that a UK pension plan counts.
Basically you options are
1. leave it where it is. When you are over 59 you will have various withdrawal options available to you.
2. Transfer to a US Simple IRA within 60 days. There will be various withdrawal options available to you at the retirement age.
3. Transfer to a ROTH IRA. You will pay tax on the funds you withdraw fom the 401K. I am researching the possibility that you can do this in a future year (or years) to minimise the tax payable. I will post the result later
All the above options will have additional future UK tax liability issues (If that is where you are a tax resident) on the funds that you withdraw at retirement age.
4. Withdraw your 401K, take the tax hit in the US, but you can offset the UK tax that may be due on those funds by the some or all of the tax paid to the US. I do not know if the tax penalty is a transferable credit.
Not knowing your personal circumstances, how much money is involved or your US and UK tax brackets I cannot suggest the best course for you.
Options 2 & 3 may not be good if your 401K has contributions from your employer in it.
TAKE PROFESSIONAL ADVICE.
Option 4 has the advantage of closing down your finacial ties to the US, especially if you do not intend to return in the future and you do not run the risk of it being forgotten.
Remember, if you do leave you funds here you will have to keep the fund administrators updated with address and death beneficiary changes. If you have a will it might be adviseable to record your SSN in it. That should aid your will executors to access the fund.