So my visa expires next year and my employer has a 3 year vesting period for their contributions. When the contributions vest and I am no longer in the country, how can I withdraw from my 401k? Can I opt to receive a cheque to my foreign address? Is this possible? I think I will be closing my US bank account when I leave the country.

Also, follow-up question I have is that, can I withdraw my 401k balance in installments so that I don't have to pay too much tax in a single year.

Just to clarify: I am moving to a different country but working for the same employer. They will be moving me abroad.. because my visa is about to expire

1 Answer 1


This is a question to ask your employer's HR Department about. Typically, vesting periods stop when you leave the employment. If you have worked for less than three years for the company when you leave, the contributions don't vest 100% when three years have elapsed. However, there are various rules that 401(k) plans must follow regarding how long the vesting period can be. If I remember correctly, vesting periods as long as five years are permitted but only if at least 20% vests each year till one gets to full vesting after five years of employment, and there might be something similar for three years too.

When you do withdraw your 401(k) money from abroad, I believe that there is a mandatory 30% withholding for federal income tax. In addition to Federal income tax, you will have to pay the 10% penalty for early withdrawal unless you are at least 59.5 years of age. And yes, you can withdraw the money over several years to reduce the tax bite.

Edit: In view of the newly-added information in a comment that the OP will still be working for the "same" company, just in a different country (India?), the question that needs to be asked of the HR Department is what rules govern the 401(k) in these specific conditions. The OP might be beginning participation in a different retirement plan which might or might not be linked to the current 401(k) plan. If linked, the vesting after three years of employment might occur (or might not, depending on the details of the linkage). Also, there may be country-specific rules that the OP might need to follow, e.g. I believe that in India, NRIs returning from abroad "permanently" are allowed seven years (or is it three years?) from the date of return to bring all their assets from outside India back to India without any tax consequences in India.

  • Ohh.. I am moving to a different country but working for the same employer. They will be moving me abroad.. because my visa is about to expire.
    – Aditya
    Apr 1, 2019 at 12:53
  • Irrespective of where you are moving, If you decide to withdraw earlier than 59.5 or around that age, you will have to pay the tax and early penalty fees. My suggestion is to check with your 401K fiduciary, they will give you better advise.
    – goofyui
    Apr 1, 2019 at 19:55
  • @Aditya I added your comment regarding staying with the same company to the question. This is an important point. Apr 2, 2019 at 18:11

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