beijingtoboston

Sorry for the boring post, but does anyone know if you can transfer your US 401K plan to the UK and if so how to do it and if there are penalties? I am setting up a 401K plan now but don't want to waste my money by investing and then finding that I can't take it back with me when I return to the UK in the future.

Thanks.

dunroving

I've seen people post on here that it's do-able if you get an expert to do it for you.

I've personally made enquiries both ways (tried to transfer 401k to UK in 2000; also tried to transfer UK pension here). Both times I was told the same thing: due to different tax laws in the UK and US, you can't do it.

Now, that's not to say there's not a back door way to do it, e.g., cash it in and transfer the money, but then you lose a lot through taxes, etc.

Manc

For ease,

forget the 401k

open up yourself a Roth IRA.

Advantage - It's already tax paid, and therefore you won't be raped on taxes once you take out the money to the UK.

Disadvantage - Usually a 401k will include some sort of employer contribution and is in essence 'free money' which will not be contributed to any Roth IRA you open.


Just my tu'penneth, there is no right or wrong answer to this I believe.

syllk

Agreed. Do the maths, and you'll realise that Uncle Sam only gives a tax break now because he knows he'll be screwing you over for much much more when it comes to taking the money out at retirement.

Manc

indeed, why pay tax on $1,000,000 when you can pay the tax on $100,000.