401k transfer?

Hi there,

My husband will hopefully be moving to the UK soon and isn't sure what to do about his 401k. He called his financial group and they have given him 50days to find out if he can transfer it over to here or they will automatically withdraw the money ad send him a check but at a fee. He is only 24 and so has only been paying into it for about 4/5 years and doesn't have a job lined up here yet.
What has everyone else done?

Keep it in the US and let it grow.  He'll take a massive tax penalty for withdrawing it.  I wouldn't do that.

Thanks for your reply. How will it grow if he moves here and gets a UK job? Will they not close it if he stops earning? He gets charged for it being an inactive account

Thanks for your reply. How will it grow if he moves here and gets a UK job? Will they not close it if he stops earning?

It's an investment account.  So while he won't be actively contributing anymore, the money will continue to be invested and grow over the years.

It's an investment account.  So while he won't be actively contributing anymore, the money will continue to be invested and grow over the years.

Thanks, but I'm not sure they'll let him keep it open if its inactive. They said they'll charge him inactive fees is this normal and if so worth it?

How much are they going to charge him?

Usually there is a tiny fee for their "management" of the account.  How much is his 401k worth?

If he withdraws it, he will not only pay a penalty, but also be taxed on the amount.  There's every chance that he'll lose roughly half the money in fees and penalities.  It's up to him.

He can shop around for a rollover IRA as well. I put mine into an investment account with HSBC to keep my account status with the bank. There are small management and transfer fees but it is still growing. Its definitely worth keeping it, the tax hit is significant if he withdraws it as a check!

Hi there,

My husband will hopefully be moving to the UK soon and isn't sure what to do about his 401k. He called his financial group and they have given him 50days to find out if he can transfer it over to here or they will automatically withdraw the money ad send him a check but at a fee. He is only 24 and so has only been paying into it for about 4/5 years and doesn't have a job lined up here yet.
What has everyone else done?

This may not be the path you want but I cashed mine in with no problem except obviously the early withdrawal fee. You do need to be officially not a part of the company so in my case I made sure my last paycheck had been direct deposited. I also checked with my human resources to make sure I was officially termed. If you are cashing it in be sure to remember that counts as income on your taxes come tax time. If he wants to keep it on tact I am not sure what you would need. Also they can direct deposit that into your American bank account rather quickly. I know it sure helped me with wedding expenses! Good luck!

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This may not be the path you want but I cashed mine in with no problem except obviously the early withdrawal fee. You do need to be officially not a part of the company so in my case I made sure my last paycheck had been direct deposited. I also checked with my human resources to make sure I was officially termed. If you are cashing it in be sure to remember that counts as income on your taxes come tax time. If he wants to keep it on tact I am not sure what you would need. Also they can direct deposit that into your American bank account rather quickly. I know it sure helped me with wedding expenses! Good luck!

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I had a loan from mine that is treated the same as a cash out when you are terminated and don't pay it back immediately. The tax hit was significant. Please please please make sure to understand how it will impact you when filing next year if it's more than a small amount of money. Between married filing separately (losing student loan interest deduction) and that, my taxes last year hurt a lot.

I rolled mine into an IRA with Vanguard and manage it from here. My 34 year old son did the same thing.