, last updated - Pensions

401k Roth IRA Rollover Rules

US Expat moved offshore and still have a 401k based in the US?

Already a US expat living offshore and have 401K or Roth IRA. The process of rolling over or transferring your current 401K scheme is now relatively easy with most providers. With offshore scheme provider’s available you can still invest within the US market from your 401K and take withdrawals.


To transfer you 401K or Roth IRA under US rules, you will need a custodian to act as the trustee. You will then need to have an account set up in which the funds are invested from. Al this can be a daunting task for most US expats. This can all be made easier via Harrison Brook, online advisers to expats.   


Like most of the 401K and Roth IRA accounts, they are all in invested in the US markets. There are few exceptions that will place investments within offshore funds. Most providers that accept rollover from 401K or Roth IRA invest within the US markets as this keeps authorities happy and allows for the rollover.

Cashing in 401K and Tax Charges

Under the age of 59 years and 6 months, you may be subject to 10% tax charge and your usual income tax charges if you in-cash you 401K. Your plan provider will typically keep 20% for the IRS. If you are 55 to 59 and 6 months you may be able to avoid the 10% tax charge if you terminated employment no earlier than the year you turned 55.

If you are no longer employed by the company then you can cash in or, rollover your 401K plan into an IRA. Upon on the transfer , the tax can be deferred into a Roth IRA allowing you to avoid the US tax as a rollover is not considered cashing in a 401K.

Get In touch with Harrison Brook, online advice for expats.

The information contained herein is for informational purposes only which is subject to change and should not be relied upon. You should seek advice from a professional adviser before embarking on any financial planning activity.

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