If you are a US Citizen, or have worked in the US, and accrued funds in a 401k you may find it difficult to get advice on your pension if you now reside outside of the USA. We have a solution for you, as you may want to consider other options, such as rolling it into an IRA.
What are the main Advantages of Rolling Over a 401k to an IRA ?
Better Investment Choice
Your 401k is likely limited to a small sample of the investment options that are available. However, with an IRA, most types of investment are available, including not just mutual funds, but also individual stocks and exchange-traded funds (ETFs). Having more options can help you develop a better long-term strategy for your retirement savings.
Depending on the 401k plan, there may be lower-cost fund options in an IRA.
Flexibility for Withdrawals
Rolling money into an IRA will enable you to manage your withdrawals and taxes you pay on them. In addition IRA’s could offer more flexibility in determining which assets to liquidate vs a 401k which typically take an equal amount out of each of their investments.
If you find that a fund in your 401k is not performing well, you may not be able to find another investment option to switch to as easily as you can with an IRA.
Wealth Transfer Advantages
Upon death, there’s a good chance that the 401k will be paid in one lump sum to a beneficiary. An IRA generally allows you to name multiple beneficiaries—or even a trust as a beneficiary.
Understanding a 401k is not easy – each company has a lot of leeway as to how they set up the plan you are in. However, IRAs are standardized by the IRS. At the end of the day there are pros and cons to both the 401k and IRA models.
We can help determine if the IRA platform is the right option for you.
In fact, most advisers and their clients think the only options available are to let the 401k sit unattended until it’s time to evaluate the retirement options.
How We Can Help?
If you have left the U.S. and no longer have a U.S. address, many IRA providers won’t open an account for you – that’s where we can help as an SEC registered adviser, based in Europe, working with US based SEC advisers.
Of course, we can also advise you on your EU options as well!Contact us