I am a 65 year old NON-US citizen, with an existing 401k based in the US. I am wanting to draw a monthly income from my "pot".

Purchasing an annuity from insurance companies does not seem likely to work, as I am a UK citizen living in a third country. Annuities are calculated and paid based on residency factors. There does not seem to be any annuities available where I live (Thailand). Only plain life insurance products, based on regular periodic deposits.

Is it possible for me to rollover my 401k into either an ORDINARY IRA or ROTH IRA. I already have an ITIN number and pay US federal taxes on my income from my existing US based investment account.

But I have never worked or lived in the US, nor do I have a SSN.

  • 2
    I'm curious how you have a 401(k) if you never lived OR worked in the US? Or did you work for a US company while not living in the US? – Joe Feb 14 '18 at 17:46
  • @DStanley I assume that he doesn't want to incur that much income all at once? – Joe Feb 14 '18 at 17:49
  • YES .......I could draw a lump-sum from my 401k, but I would likely incur a large tax-bill (20% -30%), all at once. Which I am not comfortable with; having lived this long without paying too much to the tax-man. The remaining "pension pot" would then not last very long, with investment returns deminishing with time. – Tony Carlisle Feb 14 '18 at 18:07
  • Joe........YES I worked for a US company, but outside of the US, for the entire time. – Tony Carlisle Feb 14 '18 at 18:09
  • @TonyCarlisle, if you find a US institution willing to open you an IRA, please let me know. I have been looking for months. I am in much the same situation as you, although I did live in the USA when I was paying into my 401(k). – Rupert Morrish Feb 14 '18 at 19:35

You can roll over your 401(k) to an IRA just like a resident/citizen. If you can find a US-based IRA that's willing to tolerate your non-US address, which will be more challenging but not impossible, there won't be tax consequences here. You'd owe taxes on the withdrawals (and automatic withholding); make sure you understand these and find an IRA custodian who is willing and able to work with non-residents on these matters to avoid excessive withholding.

However, if you want to move it to a non-US based account, you'll have to pay taxes on the entire amount, subject to the tax treaties of wherever you're moving to. That could be up to 30%. That's even if you don't actually owe 30% tax on it - it's withheld then you have to file a return to get it back.

See this Investopedia article for some more details.

And of course, if you rolled it into a Roth IRA, there would be significant tax consequences; I doubt that would make financial sense at this point (unless you expect to live a very long time and/or think that the current tax cuts are very temporary, but remember that even so, capital gains taxes are generally much lower than regular tax rates, which this conversion would be taxed at).

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