Your 401(k) or IRA as a US Expat

As a US Expat, you are very likely to have either a 401(k) or IRA, no matter how large the funds. So, the question remains, what exactly happens if you wish to make a withdrawal whilst overseas?

You may not be surprised to read that the US will tax your retirement accounts. Typically, the rules are the same for US residents, where you will pay tax on withdrawals.

With regards to Roth IRAs, if you have held the account for 5-years, your withdrawals, whether US resident or as an Expat will usually be tax and penalty free. However, there are other criteria to keep in mind such as your age when you make a withdrawal.

For regular withdrawals once you have reached retirement age, overseas 401(k) withdrawals are taxed as income in most instances. It is also important to check whether there is a tax treaty in place with your Country of residence as these may reduce your tax liability.

Early withdrawals will be taxed, whether you are a US resident or overseas. This is generally not recommended in most circumstances, and we recommend you take advice before doing so.

If you are considering transferring your US retirement accounts to an International retirement account, we recommend you take advice before actioning.