Tiler2

Hi,

I wonder if anyone has any experience that may help with a problem that I have. I worked in the USA for 6 years and left over a decade ago (returning to the UK), leaving my retirement funds in my company's 401k plan.

I have had online access and have received yearly updates since leaving.

However my former company went bankrupt and, while the 401k is no longer operating, the administrators have moved my funds to a holding account (still operating like a 401k but with only one investment choice which is cash). I have no other option with this company and they can offer no alternatives (eg. investment IRAs) to me.

As such my funds have stopped growing and I am years away from retirement.

The company has told me that I should initiate a 401k to IRA roll over with an investment company (Vanguard, Fidelity, TDAmeritrade, etc) however every company that I have said I need to live in the US.

Does anyone know if there are any options open for non-residents wanting to avoid a withdrawl and looking for an IRA investment fund?

kodokan

Sorry, I've not heard of a financial company that will allow a non-resident to open an IRA, even for a rollover.

That's really tough luck about the cash only option. It's probably better to take the hit now, get the money out, and invest it elsewhere for the next X decades. You'd lose, what, maybe 30-40%, with the tax and the penalty? That'd be painful, but try to think of it as mostly the tax you would've paid on the original sum anyway. Leaving it in cash for many years is almost certainly the worst of your annoyingly poor options, and at least this way you're free of US tax reporting hassles in the future.

Pulaski

I wonder what evidence of US residence a rollover IRA would require? It might be possible to use a mailbox address rented from The UPS Store, then use "Apt #", and the street address of The UPS Store, instead of "Box #". I believe that it is unlikely that the investment company would notice. It might be worth a shot and I don't see much to lose.

kodokan

It's a creative suggestion, and worth looking into, but I think you need a physical address to take out a UPS mailbox, even. Maybe one of those mailing services aimed at full-time RVers, where you also simultaneously set up residence in a new state? Presumably they don't all actually physically move to Florida or Texas or wherever, and it's all done online anyway.

Pulaski

I know that it works some times. I can't promise it will work every time. I would try three or four fund managers before giving up on the plan. If it does work, I would keep the box for 6-12 months before informing the fund manager that I was "leaving the US". But that doesn't need to be in the US. ..... And UPS owns (I believe) "Mailboxes Etc" in the UK, which was the business that UPS bought and rebranded in the US as The UPS Store. Mailboxes Etc offers the same mailbox services as The UPS Store, including forwarding mail received overseas.

FWIW Some Canada businesses rent mail/PO boxes just over the border in the US to give them a US address.

nun

If you have a friend or relative the easiest solution is to put their address on your application. The next option would be to use a UPS mail box address. You can opt for electronic delivery of all statements and I know that Vanguard aren't bothered if you have a foreign address if you already have an account with them.

Tiler2

What evidence of address would an institution likely ask for?

Pulaski

If you have an SSN, as obviously you do, most likely nothing. They are required under the USA PATRIOT Act to obtain and verify four pieces of information, but usually if you have an SSN the institution can access information similar to a credit reference agency file, that shows your name and linked data, including your date of birth and SSN, plus any addresses you have used. In practice, they only need to verify three pieces of information, so as long as your SSN is linked to your name, and you give the correct DoB, the new address is unlikely to be an issue.

If you have any other accounts still open in the US, such as a bank or credit union account, or a credit card, if you switch the address to a friend's address, or to a UPS Store address, a couple of months ahead of time, that should cover the relatively unlikely possibility that the IRA institution would quibble over your address, after all, people commonly change addresses. The new address is almost certain to make its way onto your agency file within a couple of months.

Occasionally some institutions will ask to see paper records, but for a large regional or national institution, that is relatively unlikely unless you don't exist in the database that they check customer data against. Checking against the database is quick and easy, checking paper records is time consuming and messy.

If you go down this route (UPS Store, or friend's address), please can you let us know what your experience is and the outcome, as it would be useful information for others who need to open an IRA but are not physically present in the US.