401k?

My apologies if this has fallen into the wrong category.

I have a 401k that has a small amount of money in it (under $6,000) and I am not sure what to do with it when I move to the UK.

I could most definitely use any extra money at this point to help with the move and make the transition easier -- so my first inclination is to withdraw the money.

Any suggestions?

no no no!  don't withdraw the $$!  You'll pay so much in fees and taxes! 

open an IRA rollover in the states through your bank and roll the $$ and secutirues into there.  that's what i have to do.  that way i'm keeping my shares of stock that have been purchased in there and selling the mutual funds and using that $$ to purchase mutual funds that the bank offers in their IRA.

I TOTALLY agree with Aimiloo!  Don't touch it! I know it's tempting - but it will hurt you when tax time hits! I know -  I was an idiot who took some out 

i believe, and i could be wrong, the numbers would be: 30% withdrawl fee.....AND you'd be taxed on that $$ at your current tax rate as additional income.

it would be ugly and so not worth it

For my 401K plan, you're immediately hit with 20% rate in federal tax and you can also have your state tax rate taken out at the time of withdrawal. When you file your taxes next year, you will also have to pay a 10% early withdrawal penalty fee if you are not 59 1/2 yo at the time of withdrawal and if you did not roll it into a IRA or another 401K plan. My amount is about $4500 at the moment and I'll definitely need that to live off of until my wedding and whenever I get a job. Can't live off fumes when you got large sums of student loans to pay.

Tanisha

I have a similar situation and was wondering the same...

I think that if you can still actively manage your 401K -- although you can't make contributions to it -- then you might consider just leaving the account where it is.  (Unless your former employer is closing out the account for you and you have no choice.)

I like the Roll-Over IRA suggestion but I don't know if it really buys you anything other than allowing you to change your investment options. if you start working for a UK employer that does not have an eligible company sponsored plan that you could roll your account to, you're in the same boat as having left the funds in the 401K. It you can work for a US company over there with an eligible plan, it's a no brainer -- roll away!

Anyway, I might be completely wrong but I'm doing the same research at the moment....

Oh, I agree with the other postings, whatever you do -- don't take a distribution.

I have a similar situation and was wondering the same...

I think that if you can still actively manage your 401K -- although you can't make contributions to it -- then you might consider just leaving the account where it is.  (Unless your former employer is closing out the account for you and you have no choice.)

I like the Roll-Over IRA suggestion but I don't know if it really buys you anything other than allowing you to change your investment options. if you start working for a UK employer that does not have an eligible company sponsored plan that you could roll your account to, you're in the same boat as having left the funds in the 401K. It you can work for a US company over there with an eligible plan, it's a no brainer -- roll away!

Anyway, I might be completely wrong but I'm doing the same research at the moment....

Oh, I agree with the other postings, whatever you do -- don't take a distribution.

One thing to consider is if you rollover to your own IRA, you can continue to make contributions if you wanted.  Leaving it in the company 401(k), you cannot.  Also, many companies will require you to remove the money from the 401k plan if you leave the company, so it may not be an option to leave it.

I have an IRA and while it's tempting to "cash it in" which I could for studetn purposes I figure there will be a time in my life when I am old and wrinkly and crinkly when I will be happy to have that money there.  I sold my stock options and rolled that with the 401K into a year IRA (rates suck at the moment) and I continue to make a small $100 contribution each month.... okay my dad does this for me.  (Love my dad).  So the whole roll over thing is quite easy peasy and you can indeed contribute to it and withdraw from it when you are old no matter where you live. 

I thought I would add, since it hasn't been mentioned.  There are some ways to withdraw money from your IRA without penalty: first time homebuyer, higher education costs, medical bills, etc.  If you really want the money and fit these circumstances, it would be a legal way to avoid the penalty.  You would get tax removed from the distribution, but you would likely get that back when you filed your return.