What to Do With Your 401(k) When Moving From the US to Europe

• Can you keep your 401(k)? Yes, but your US brokerage may restrict or close your account once you have a foreign address.

• Can you transfer it to a European pension? No. The US does not allow direct tax-free rollovers to foreign pension plans.

• Option 1: Leave it. Good for maintaining tax-advantaged growth, but you may face account restrictions.

• Option 2: Roll it into a US IRA. Offers more investment choices, but you must find an expat-friendly brokerage.

• Option 3: Cash it out. Highly discouraged. You will face US income tax, a 10% early withdrawal penalty (if under 59 ½), and potential European taxes.

• The Best Move: Work with a specialized experts at Cross Border Planning.com to navigate tax treaties, PRIIPs/MiFID II regulations, and expat-friendly brokerages.

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First a quick refresher. A Roth IRA differs from a regular IRA or 401(k) as contributions are made with after-tax dollars. This means once you start distributing income, you don’t owe any taxes.

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Americans and green card holders residing abroad continue to be frustrated and confused with the many rules and regulations they must follow in order to be compliant with their US tax filing and reporting requirements.