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    rmdcastro's Avatar
    rmdcastro Posts: 1, Reputation: 1
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    #1

    Jun 29, 2009, 12:29 PM
    401k options for non-resident alien (cash out or rollover?)
    I'm a 45 year old citizen and resident of Costa Rica. I have never been a US-resident, nor did I ever work in the US. Because I have never worked within the US, I do not have an official SSN.

    However, I worked for a US multinational for many years in various locations and participated in their 401k plan. The company used a dummy SSN (888-88-xxxx) to track our accounts.

    I have stopped working for the US-based multinational and would like to know what options I have in terms of cashing out or rolling over my 401-k funds. I would like to minimize any withholding taxes as since I'm not a US taxpayer I cannot get these refunded.

    Thanks
    ebaines's Avatar
    ebaines Posts: 12,130, Reputation: 1307
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    #2

    Jul 9, 2009, 07:50 AM

    This question has been languishing a while, so let me take a stab at it, even though I may not have a complete answer for you.

    I don't get it - you never lived nor worked in the US, so why were you investing in a US-based 401(k)? The point of a 401(k) is to defer some of your US income, and consequently defer US taxes on it until retirement. If you didn't owe any US taxes on your income in the first place - what was the point? I also don't understand how your employer could use a "dummy" SSN for you - this actually sounds like a scam to me. I suggest you call your former employer's HR department and ask them what your options are. Also, you should investigate whether there are programs similar to the US 401(k) or IRA plan in Costa Rica - perhaps you can roll your US-based plan to one based there.
    Parisian's Avatar
    Parisian Posts: 2, Reputation: 1
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    #3

    Oct 10, 2010, 08:35 AM
    I am in the same position. I was on the US payroll of a US multinational for 35 years, but I have never lived or paid taxes there. I, too, have an artificial SS number that the HR department gave me when they set up the 401k back then. They said it was the only way they could make pension contributions for me. I am still working for the company in Europe, but since 2002 have been on a local payroll, paying into a state pension scheme.
    I would be very interested in a response to rmdcastro's question about withholding tax and whether I can recover it when I retire in a couple of years. I think I read somewhere that a solution is to withdraw small amounts annually rather than a big lump sum but I'd like to have that confirmed.
    blackt's Avatar
    blackt Posts: 2, Reputation: 1
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    #4

    Feb 8, 2011, 09:55 PM
    Not an answer, since I don't have one yet, but I am in exactly the same situation - non US citizen working for a US company outside of the US. I was automatically enrolled in my US company's 401k with a dummy SSN. Now, 19 years later, Fidelity are telling me I need to get a Tax identification number, and I can no longer access my account on line, though the funds are still there and I and my employer continue to contribute each month. I get no tax benefit from this as my full income is reported to the tax authorities where I am resident (HK). Should I try to get the whole thing transferred to my HK pension fund (MPF) and take the tax hit now, rather than ten years from now, when there will be ten more years of capital accumulation? How can I find out my tax liabilities?
    blackt's Avatar
    blackt Posts: 2, Reputation: 1
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    #5

    Feb 8, 2011, 09:56 PM
    Not an answer, since I don't have one yet, but I am in exactly the same situation - non US citizen working for a US company outside of the US. I was automatically enrolled in my US company's 401k with a dummy SSN. Now, 19 years later, Fidelity are telling me I need to get a Tax identification number, and I can no longer access my account on line, though the funds are still there and I and my employer continue to contribute each month. I get no tax benefit from this as my full income is reported to the tax authorities where I am resident (HK). Should I try to get the whole thing transferred to my HK pension fund (MPF) and take the tax hit now, rather than ten years from now, when there will be ten more years of capital accumulation? How can I find out my tax liabilities?
    ebaines's Avatar
    ebaines Posts: 12,130, Reputation: 1307
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    #6

    Feb 9, 2011, 06:40 AM

    Seems to me that you are going to have to get an ITIN and update your account info and your employer's records with that number. I would not advise transferring the money out until you are age 59-1/2; otherwise you woud have to pay both regular income ax and the 10% early withdrawal penalty. If the account continues to accumulate earnings that's a good thing - sure you would pay more taxes but you would also net more inome.

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