401K & RothIRA for resident becoming non-resident.? | 401k Questions

Question

Asked 2/17/2008

401K & RothIRA for resident becoming non-resident.?

I’ve worked in the USA for 3 years.
I’m about to end employment here and go back to Europe to work for a different company.
Question: what to do with my 401k .

My plan:
401K to RollOverIRA to RothIRA.
In 2008 my AGI will be small (probably just 3 months of US income), then I become non resident. Therefore, I will be in the 15% tax braket when rolling to RothIRA from TIRA, then money can grow and be withdrawn tax free (given I follow rules).
Is this true?
Does anything change if I become a non-resident?
I understand I can manage that money online, but how do I access it 30 something years from now? Do I need a us bank account or can it be sent to a bank account in a different country straight through?

Answers

Answer 1/1 - Submitted 2/20/2008

Yes, your synopsis is true. Nothing changes when you become a non-resident. The Roth IRA will be held in a U.S. institution that is registered to deal with retirement vehicles such as IRAs.

You would be able to access it online, for example, if you put the money into a Roth account at a discount broker, for example. You can trade away in the account tax free for as long as you want. You can't add anything to it once you no longer have any U.S. earned income, so be careful with losses.

You can withdraw the money any time you're eligible in the future. Have them wire the funds out of the U.S. dollar-denominated account and into your Euro- or Pound-denominated account and they will do the currency translation for you (for the going fee).

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