401k Rollovers for US Expats: Maximising Retirement Savings

Are you an American living abroad with a 401k retirement plan from a previous employer? If so, you may be wondering what to do with your 401k funds now that you are living overseas. One option to consider is rolling over your 401k into an individual retirement account (IRA). In this post, we will discuss the benefits of rolling over your 401k into an IRA, and the steps you need to take to do so as a US expat.

Benefits of Rolling Over Your 401k into an IRA

• Greater Control Over Your Investments: Rolling over your 401k into an IRA can give you greater control over your investment options. With an IRA, you can choose from a wider range of investment options such as individual stocks, bonds, and exchange-traded funds (ETFs). This flexibility can help you create a more diversified investment portfolio that aligns with your financial goals.
• Potentially Lower Fees: Many 401k plans charge high administrative fees, which can eat into your retirement savings over time. In contrast, IRA accounts often have lower fees, making them a cost-effective option for managing your retirement savings.
• More Flexibility with Withdrawals: Unlike 401k plans, which have strict rules around when and how you can withdraw funds, IRAs offer more flexibility when it comes to withdrawals. This can be particularly helpful if you need to access your retirement savings before you reach retirement age.

Steps to Roll Over Your 401k into an IRA as a US Expat

1. Contact an adviser that is regulated by both the SEC in the US and in your country of residence. Here at SJB, we are dual-regulated in both the required locations.
2. We can then advise on the following points to assist in rolling over your 401k to an IRA.
   1. Review your existing arrangement and compare flexibility, fees, performance, diversification, need for advice etc to help you decide whether a 401k or IRA is best suited to your needs.
   2. Choose an IRA Provider: Once we have confirmed that you are eligible for a rollover and have deemed a rollover suitable, we will advise on a suitable IRA provider. We consider factors such as fees, investment options, and customer service when selecting an IRA provider.
   3. We will help you set up your IRA account. This will involve filling out an application and providing personal information such as your name, address, and Social Security number.
   4. Initiate the Rollover: After you have opened your IRA account, we will help you initiate the rollover process. This will involve completing paperwork provided by your 401k plan administrator and sending it to your IRA provider. Your IRA provider will then work with your 401k plan administrator to transfer the funds into your new IRA account.
3. Manage Your IRA Investments: Once your rollover is complete, we can be the appointed financial advisers to your plan and assist with financial advice on all aspects related to your finances including tax-efficient investment and retirement options for US expats.

Rolling over your 401k into an IRA can be a smart financial move for US expats living overseas. By doing so, you can gain greater control over your investments, potentially lower fees, and more flexibility with withdrawals. If you are considering a rollover, get in touch today.