Out of the Country, Out of Luck?

Here's a question I'm sure you've never encountered. I am 50 years old. I worked in the USA from 1987 - 1995. During this time period I was employed and contributed to a 401k plan along with my employer. In 1995 I moved to Europe (Greece) with my family and have since been employed in the private sector (no affiliation with USA what-so-ever). My question is as far as the 401k plan I left behind (worth $40,000 now) what can I do about it other than wait out my retirement? Can I contribute to it from where I am?

Nick from Greece

Answer

Dear Nick: From your e-mail, it sounds like you are a non-US citizen. Generally, qualified retirement plans, such as a 401(k) are non-transportable (i.e. they cannot be rolled over to a qualified plan in another country). Your first course of action should be to obtain a copy of the Plan document and review the options available at termination of employment. If you have the option of taking a full withdrawal, you may be subject to U.S. as well as Greek taxes, and of course, you would have to pay the 10% early withdrawal fee if you take the funds before age 59 1/2.

As far as the ability to contribute to that 401(k) from where you currently are, you would not be able to make additions to it unless you are still employed by the same company and are being paid in U.S. dollars.

My advice would be to review your 401(k) plan document and then consult a tax adviser to determine the tax implications of taking a full withdrawal if that option is available to you. Otherwise, waiting until after age 59 1/2 may be your best course of action.

Good luck, and if your circumstances differ from what I surmised from your e-mail, please give me more details, and I will try to be of additional assistance to you.

Out of the Country, Out of Luck? (follow up)

Thank you Jan, By the way, I am a US citizen (dual citizenship). I dont think that changes anything from what you described though. Are you aware of any list of overseas tax advisors? There must be since there are US resident employees who work for US companies here.

Nick from Greece

Answer

Dear Nick:
You are correct, the dual citizenship alone does not change anything. The only way you would be able to roll your 401(k) to an IRA is if you have a US residence.
As far as a tax advisor, I would recommend you go into a local bank or brokerage firm and ask to speak with a Financial Advisor. Most banks have Financial Advisors who can assist with matters such as these.
Good luck!