Anyone who earns money in the US can contribute to an employee-sponsored retirement account. And we encourage non-residents in the country on a work or student visa to put money into a 401(k) or 403(b) if they can. But what happens to that money when a non-US citizen returns to their home country? What can you do with that retirement savings?
On this episode of Queer Money, we’re discussing six options for what non-residents can do with their 401(k) after moving back to their home country. We explain why a non-US citizen might want to take lump sum or periodic distributions from their 401(k)—or leave it untouched until retirement.
We also walk you through the pros and cons of rolling your 401(k) into an Individual Retirement account or transferring it into a qualified retirement plan in your home country. Listen in for insight on the benefits of converting your 401(k) into a Roth IRA and learn where to go for specific advice around the tax laws in your country.
Topics Covered
- Why we encourage non-residents to contribute to an employee-sponsored retirement account
- What happens if you withdraw money from a 401(k) before the age of 59½ 6 options for what a non-resident can do with their 401(k) after moving back to their home country
- Why a non-US resident might want to leave their 401(k) untouched until retirement The benefit of rolling a 401(k) into an Individual Retirement Account for non-residents returning home
- How to transfer your 401(k) to a qualified retirement plan in your home country
- The pros and cons of taking a lump sum distribution from your 401(k)
- Who is a good candidate for converting their 401(k) into a Roth IRA once they leave the US
- Why you might want to take periodic distributions from your 401(k) as a non-resident of the US
- Why we recommend getting advice from an accountant with international tax experience
We’re David and John Auten-Schneider, the Debt Free Guys (https://debtfreeguys.com) and hosts of the Queer Money® podcast. We help queer people (and allies) live fabulously not fabulously broke by helping them 1) pay off credit card debt, 2) become part- or full-time entrepreneurs and 3) save and invest for retirement.
