What happens to my 401k if I leave the country?

Question:

What happens to my 401k plan if I decide to leave the United States and move to another county? What are the consequences? How can I prevent from getting penalized? I am a 35-year-old permanent resident and have decided to move back to Canada.

Answer:

You can transfer your 401k to an IRA and the funds will be available to you when you reach retirement age to prevent you from getting hit with a penalty.

What do you think? Answer below!

5 Responses to What happens to my 401k if I leave the country?

  1. mrsdeli says:

    If you cash in your 401k without rolling it into another retirement plan you will be penalized. The only way to avoid that is to leave it where it is until you retire.

  2. Jeff H says:

    Nothing “happens” to your 401(k)… it will still be there waiting for your retirement. If you cash it out, you’ll have to pay taxes and penalties though.

  3. Uncle Leo says:

    Check with your 401(k) plan administrator. Basically, the plan probably will hold the money for you or allow you to transfer the funds to a traditional IRA. You can also withdraw the money, but you will have to pay state and federal income taxes and a 10% penalty. The latter is the costliest of your choices.

  4. digdowndeepnseattle says:

    You can roll it into an IRA and wait until retirement age and take it or you can take a distribution in cash. If you do so, make sure it happens BEFORE you move back to Indonesia as once you get that foreign address they are required to withhold 30%; instead of normal 20%.

  5. mister ed says:

    uncle get his money up front — if you take a payout the tax man get his the same time you get your payment!!!!

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