It's changed a bit, it used to be yours regardless but they added wrinkles: SSA

The 401k is not a defined-contribution pension plan, it isn't even a pension plan. It is a tax protected method of accumulating a lump sum for your retirement years. You can vary the contribution from time to time.

If you want to buy an annuity with the lump sum, or just pay out in dribs and drabs, that is up to you.

Not true. A non-USC can draw a US pension in any country that has reciprocal agreements with USA. A USC can get it sent to countries that don't have reciprocal agreements.

Phew!!! (Thanks, Michael!)

***If you are a citizen of one of the countries listed below, Social Security payments will keep coming no matter how long you stay outside the U.S., as long as you are eligible for the payments.

* Austria
* Belgium
* Canada
* Chile
* Finland
* France
* Germany



* Greece
* Ireland
* Israel
* Italy
* Japan
* Korea (South)
* Luxembourg



* Netherlands
* Norway
* Portugal
* Spain
* Sweden
* Switzerland
* United Kingdom
***

Be careful with that one - think 'Enron'! Eggs in one basket and all that....

Absolutely!

Diversication is the # 1 law of investments, and pensions are investments which should be treated more conservatively than other types of investments.

Wow tons of info to digest. Thanks very much! Thanks Nai_in_av for allowing me to Hi-Jack da thread, it's all yours again

One thing I forgot. If you are a non-citizen, living outside the USA, they withold for taxes from the US pension. I think its 25% or thereabout.

Yup, I can transfer the money when the trade window opens every 6 months, so I go and sit down with my Fidelity guy and he tells me where to move it around to.

LOL...... FFS

Why the defensiveness? There's a huge difference between a 401(k) and a 'traditional' defined-benefit pension plan.

Woooooooaaaaaaahh fella, I wasn't getting my knickers in a twist or getting defensive. I found your statement funny, and if you had typed the word "actually" at the end I would have laughed even harder.

I am sure there is hugh difference between a 401(k) and a traditiona............. plan type thingy.

Sorry if I upset you.

There has been a lot of good and some bad info in this thread on 401ks. First of all as an expat in the US you have to think about how long you intend to stay in the US before you contribute to a 401k. If you are going to stay in the US for a few years it's a good idea to contribute to a 401k. Most will match something like 60% of the first 6% you contribute and it is taken from your salary before tax and grows before tax. When you take the money out you will have to pay income tax on it. If you want the money before you're 59 1/2 you'll pay a 10% penalty.

I'd recommend investing in an index stock fund with no-load. Avoid annuities and high fee funds.

The US and the UK has a tax treaty that recognises retirement plans like the 401k so if you go back to the UK the 401k can still grow tax free, but you'll have to work out how to pay the income tax once you take the money out. You'll have to pay the US and probably some to the UK as well.

Invest in an Exchange Traded Fund, one which tracks a popular index such as the S&P500 for example. That means you will you always match the market - never beat it, but never miss it either. The vast majority of managed mutual funds fail to match the performance of the market over time - so why even bother?

Good luck!

The problem with index funds, and ETFs that follow them, is that they go down as well as up, with the market. A balanced fund cashes in by selling stock when it is high priced and buying bonds and vice versa.

As you approach retirement, your portfolio should carry less risk. There is no "magic single way".

If you are hands off, the "Life cycle fund" is the choice, they rebalance between stocks and bonds and reduce risk as the years go by.

If you are a little "hands on", you could buy two index ETFs, one following a stock index and one following a bond index. If you take a simple ratio of 50% in each, you watch for imbalance. When the stockindex ETFs go to say 60% of your portfolio, you sell and buy bond index ETFs to rebalance at 50/50. If tthe stock market goes down, you sell bond ETFs and buy stock ETFs to rebalance. This way, you get to hold on to some of the unrealistic jumps and falls of the market. The ratio doesn't have to be 50/50, in fact for young people it might go close to 100% in stocks but then you can't nail the money when the stock prices rise, you go up and down with the market. One man that I know worked with his age as the bond percentage, when he was twenty five, his balance was 75% stocks, 25% bonds; at fifty, his investments were 50/50, at seventy, he has 70% in bonds.

In all honesty my portfolio is aggressive, one advisor called it "adventurous" and that after I have been accumulating cash in low risk instruments to pay for a move to the "old folks home".

If you want a more sophisticated approach, you need education, run a dummy portfolio for a few years to see how things work, be deadly honest with costs etc.