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Moving away from the U.S.? Better roll over your 401k!

The U.S. Department of Labor estimates that each year thousands of workers fail to claim or rollover approximately $850 million in 401k assets. If you are moving abroad and have an old 401k through a U.S. employer, don’t leave your account stranded! The process of claiming your 401k is easier while you are still living in the U.S. than once you are abroad. So before you leave the country, make sure you roll over your 401k into an IRA account.

 

Recently, we helped one of our international clients initiate the rollover process from abroad, and we experienced a few things that we thought would be important to share.

 

To start with, he realized that his old 401k plan administrator – the company that holds the 401k funds – could only mail paperwork to him. It took over 3 weeks for the paperwork to arrive. Then, he and his wife had to fill out an additional spousal consent form. Not all 401k plans need this but when they do, the spouse needs to sign it and have their signature notarized by a U.S. public notary. When abroad, it is extremely difficult to find a U.S. notary and frequently clients need to go to a U.S. Consulate to get their form notarized. For people who cannot get to a U.S. Consulate easily, they can use an online U.S. notary service. However, some 401k companies do not accept eSignatures, so online notary services only work in a limited number of cases.

 

This is a great example of some common challenges that clients who live abroad face when trying to rollover their old 401k plans. If you are moving abroad, make sure that you remember your 401k plan when you settle your financial affairs. Here at Worldview Advisors, we deal with these issues every day and are here to assist you at every stage of the process.