Offshore Retirement Plans for Expats

expat businessmanThere are cases in which offshore retirement plans can provide a perfect solution for people who move to a foreign country for work and then move back to their home country. While living abroad, we call these people Expats.

A green card holder works a number of years in the USA, perhaps has the intention of living there forever, but then later (i.e. people from India fall into this category), they miss their culture and , again i.e. people from India, they decide to go home having earned and saved enough to do so. Many people from India save intensely in order to retire by mid-40’s even and of course I.T. engineers often can do that. The point is that the company they worked for had them in a 401k and over a 10 year period they could have accumulated 250,000 USD or more. If they want to take that money with them they will need to pay a 10% penalty plus income tax on the full amount, meaning they end up with about 150,000…so they don’t do anything but wait to make a decision as to what to do.

You can roll your 401k into an IRA and then into an offshore Retirement Plan without any tax consequence, from there it will be easier to move their money to what they want to do with it even buying a home as example – which is something not possible in the 401k or IRA. The point being that it’s a good idea to transfer OUT of a 401k and it can be done without negative tax consequence.

In Europe there is exactly the same problem; when an Expat leaves the country where they were working the country wants the taxes. They can Transfer it Out for the benefits as in the above example. Each country has names for their similar to 401k plans and we can make a list of those but the point is that the Expat wants to do a legal, compliant, tax free exchange of the Pension they accumulated when working abroad. For sure there are thousands of Expats working in China (40% tax), USA, the EEA.

If you’re interested to learn more about how you can transfer your 401k, or foreign pension plan, into an offshore retirement plan, so that you can put that money to use, then contact us today.

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