Skip to main content
No. of Recommendations: 0
I moved to the US at the beginning of January to start a permanent job here. My new employers have what my colleagues say is a very good retirement benefits programme - a 403(b) where I have to put in 2.5% or more and they contribute a fixed 9%. I get to choose where the money is invested, although only between funds from Prudential, Fidelity and TIAA-CREF. Any load is also paid by my employer. I'm just at the point of having to decide how much to contribute beyond the 2.5%, or whether to use some other foolish savings method.

I'd be interested in other fools' comments - what are my other options, and how do I work out which is best? I've read the 13 Steps to Retiring which helped me understand some of the differences to UK "retirement language".

Some background: I'm single and mid-30s, and already have some pension provision from my previous UK employer (this will pay something like 1 months salary per year in todays money, and is linked to UK inflation). Right now I have no idea how long I'll stay in the US - maybe forever and retire here, maybe I won't get a Green Card so will have to leave in a few years time. I reckon I can save 10% of my salary and maybe more at this stage, and I intend to stash away as much as I reasonably can. I'd be interested in any comments on the international aspect too - for example if I move back to the UK, would I be able to transfer IRA funds to a UK pension scheme, or would that incur a penalty?

- Andrew
Print the post Back To Top
No. of Recommendations: 0
Songmaster wrote:
< I'm just at the point of having to
< decide how much to contribute beyond the 2.5%, or <whether to use some other foolish savings method.

I've been meditating on this same question. I have decided that I can do too much better outside my 401K to contribute after my company's max match. First thing I do is start a RothIRA. Then invest in a taxed account. But you do need to do some learning on picking stocks. Follow Foolish wisdom and I don't think you can go wrong.
RBrowndog
Print the post Back To Top
No. of Recommendations: 0
Greetings, Andrew, and welcome. You wrote in part:

<<I moved to the US at the beginning of January to start a permanent job here. My new employers have what my colleagues say is a very good retirement benefits programme - a 403(b) where I have to put in 2.5% or more and they contribute a fixed 9%. I get to choose where the money is invested, although only between funds from Prudential, Fidelity and TIAA-CREF. Any load is also paid by my employer. I'm just at the point of having to decide how much to contribute beyond the 2.5%, or whether to use some other foolish savings method. <snip>

...Some background: I'm single and mid-30s, and already have some pension provision from my previous UK employer (this will pay something like 1 months salary per year in todays money, and is linked to UK inflation). Right now I have no idea how long I'll stay in the US - maybe forever and retire here, maybe I won't get a Green Card so will have to leave in a few years time. I reckon I can save 10% of my salary and maybe more at this stage, and I intend to stash away as much as I reasonably can. I'd be interested in any comments on the international aspect too - for example if I move back to the UK, would I be able to transfer IRA funds to a UK pension scheme, or would that incur a penalty?


I doubt highly that your 403b and/or IRA interests will be transferable to your UK pension plan. Your UK folks are in a better position to answer that. If you return to the UK in a few years, on withdrawal of the US retirement plan monies you will be subject to income taxes. How, though, is regulated by international agreement about which I have absolutely no knowledge. The UK may tax you or the US might, and if it's the latter, then the withdrawal will trigger the 10% early withdrawal penalty as well unless the funds are transferred into another qualified vehicle. For that reason, I'm tempted to say you should participate just enough to get the maximum 9% from your employer, and forego further contributions until you know more about the taxation issues involved.

Were I you, I would chat with other countrymen resident here to see what they know about this topic. I'm sure they, too, have had the same questions. Unfortunately, when it comes to these international issues I'm at a total loss.

Regards...Pixy
Print the post Back To Top