Advantages of Rolling Over a 401k into an IRA/ROTH IRA
Lower Costs
Depending on your 401k plan there may be lower cost fund options with an IRA/ROTH IRA.
Wider Investment Choice
A 401k is normally limited to a small range of investment options. However, with an IRA/ROTH IRA most types of investments are available such as individual stocks, exchange-traded funds (ETFs) and mutual funds subject to double taxation agreements. This enables you to have a broader spread of investments and develop a better long-term strategy for your money.
More Control
If a fund in your 401k is under performing you may not have another suitable investment to switch into. With an IRA/ROTH IRA you have greater investment options and flexibility giving you more control over your savings.
Flexibility For Withdrawals
An IRA/ROTH IRA helps to manage withdrawals and the taxes you pay on them. With an IRA/ROTH IRA you have greater flexibility when deciding which assets to liquidate versus a 401k which normally takes an equal amount from each asset you hold.
Transferring Your Wealth
An IRA/ROTH IRA allows you to name multiple beneficiaries or a trust to receive your capital upon death. Whereas a 401k normally restricts
the number of beneficiaries.
DO YOU HAVE A 401K?
SOLUTIONS
Many US Expats often leave their 401k pensions unattended as they are unaware of other options available to them and how their savings can benefit particularly if their 401k is rolled over into an Individual Retirement Account (IRA)/ROTH IRA.
Companies have a lot of flexibility when setting up a 401k and not all are uniform making them difficult to understand. However, IRAs are standardized by the IRS.
There are pros and cons to both 401k and IRA pensions. Our specialist financial advisors can help you determine if the IRA platform is the right option for you.
