What can I do with my old 401(k) plan from my former employer now that I live in Europe?

For Americans who worked in the United States and now live in Europe, they may be asking what to do with retirement plans from their former employer(s). Wether you live in Europe, it’s worth taking control over them.

Here are the most common options for what to do with your previous employer’s 401(k) plan:

1. Leave it with your former employer:
   
   Some employers allow former employees to keep their 401(k) plan with the company even after they have left. This can be a good option if you are happy with the investment choices and fees associated with the plan. However, most 401(k) plans have basic investment choices and you remain at the mercy of how that company may change plan administration in the future. This is not usually the recommended option.

2. Roll it over into a new employer's plan:
   
   If you have started a new job that offers a 401(k) plan, you may be able to roll your former employer's 401(k) plan into the new plan. This is only available to employees who remain based in the United States. For most Americans who’ve moved to Europe, this is not an option. In most cases, they become enrolled in their European company’s penson plan and a state pension. Please note: what needs to be avoided are optional private pension plans which in most cases would be classified as PFIC’s.

3. Roll it over into an IRA:
   
   Another option is to roll your former employer's 401(k) plan into an individual retirement account (IRA). This is the most recommended route for Americans who have moved to Europe. By rolling over an old 401(k) into an individual retirement account (IRA), you can have much more control over your investments and portability.

4. Cash out:
   
   While this is an option, it's generally not recommended. Cashing out your 401(k) plan means you'll owe taxes on the money you withdraw, as well as a potential early withdrawal penalty if you are under the age of 59 1/2.

In a majority of cases, choosing to do a tax-free rollover into an Individual Retirement account (IRA), provides the most benefits in handling qualified retirement money from a previous employer while living abroad.