Having Accces To My Ira Account In Thailand

[jerryb78]

guys, i need some financial advice for some expat who know their stuff about moving money to thailand or having access to your money if you ever need it while you are living in thailand.

I'm gonna relocate back to Thailand this coming summer of 2011 and need advice. ( i am not at retirement age, I just turn 33 today!)

at present, i work in san francisco, california doing engineer work in hospital, so my retirement is a 403B account (similer to 401K account). i have about $40K in ths account. i want to take my money with me.

with this type of account, i could not cash out unless i'm discharge from my employment. if i do cash out when i quite my job, i will have to pay approx 40% in penealty and tax.....and later it will be reported as income for the next year income tax season and i'll get tax on it again. so basically, i'll get double tax. outch!!!!!

i am told that i can roll this 403B over into IRA account once i am discharge from my job.

so her is my questions.

1.) once i roll it over, do i pay any tax? ( god i hope not)

2.) what type of account is better? Roth IRA or IRA.

3.) now, i want access to these money when i'm in thailand. (for what ever reason it may be. ) how do i have this money over sea or have access remotely?

i still need a buffer in case i need that extra cash. I was told to look into ING or Charles Schwabb and maybe Bank of America. any advice on this one?

i am not at retirement age and would like to save all i can, if i cash out i will loose like $16000 USD!!!! and i have to pay another tax when income tax season comes around. bloody murder!!!

I dont know if this extra info is going to make any different. but here is a bit about my self that may give me a few opinion than most farang.

I am a US citizen and was born and raised in Thailand (pattaya beach) and i have dual citizenship; US and Thai. I am an engineer and want to move back to thailand to get my foot in offshore job.( i am sick of USA!!!!!)

i do want to avoid paying any tax to any goverment of any country, both thai and US government. (if you guys know the trick, let me know. ) if i have to fly to Singapor to pick up my cash, i'll do it. Avoid Tax like the Plague! Oh, I'm single and no wife/ children, but planning to have some soon. not getting any younger.

that is all about i can tell u now, if any more questions, let me know

thx in advance and will monitor this posting.

jerry

[ballbreaker]

First you will not be double taxed, Usually they withhold 10% penalty + 20% tax withholding but since your in California maybe they want 10% withheld also. The penalty amount is gone forever but the remainder is just prepaid taxes. You could get some back when you file return.

There is no way you can avoid penalty and taxes on this money when you withdraw from 403b or IRA.

I would open traditional IRA and do direct transfer from 403b to IRA if you might draw money out in near future but I would wait until following year.. I use Schwab for my IRA accounts and wire transfers to Thailand. Never had a problem.

Edited January 10, 2011 by ballbreaker

[IMA_FARANG]

On the money transfer part here is what I did:

1.Opened a bank account in Thailand with Bangkok Bank.

2. Arranged with my U.S. bank to be able to initiate a funds transfer monthly from my U.S. bank by email. This meant I had to have some forms faxed to me here in Thailand, fill them out and sign them, and fax them back to my U.S. bank with my signature on them. I provided my Bangkok Bank account number, the account name, and the bank location to my U.S. bank.

3. Once that was approved they mailed me a code number I could use to initiate a funds transfer.

4. Now when need funds transfered to Bangkok I contact my U.S. bank. They transfer the funds to me through a SWIFT transfer via the Bangkok Bank in New York. It takes 3 to 5 days...the five days being if it is over a Thai holiday or a weekend.

5. I am charged a fee by my U.S. bank for each transfer, but Bangkok Bank does not charge me a fee. I recieve the funds in Baht, the exact amount depending on the local (Bangkok) Dollar/Baht exchange rate on the day it is credited to my account in Thailand.

I've been doing it that way for years. As a dual citizenship Thai I doubt you would have any problem opening a Bangkok Bank account here in Thailand (foriegners here often do have problems opening an account with a Thai bank).

A final point...money transfered INTO Thailand may be a problem if you ever want to take it OUT of Thailand later. For that reason I would advise only bringing in the amount you need to live...or what you are willing to leave here in Thailand. (As a dual national I believe you will have the right to buy property or even land here in Thailand...a foriegner could have legal problems doing that).

As to the IRA question I'm really not qualified to give a good answer on that part.

Edited January 10, 2011 by IMA_FARANG

[VegasTim]

Hi Jerry. I used to be a CPA in America before I decided to move to LOS. Here is what I know:

1. If you do a direct rollover from your 403B to an IRA, there will not be any taxes. A direct rollover means that you open the new IRA and your 403B company sends the check directly to the new IRA company. (Sometimes the check will be sent to you, but it will be made out to the new IRA company; if this is the case, then you just mail the check to the new IRA company.) Note that you will receive a 1099-R tax form next year showing that you made a withdrawal from your 403B; you simply add the amount to your income, indicate the amount that was rolled-over (should be the same amount) and it results in a net zero increase in income (basically add it in and then subtract it out).

2. The Roth IRA has a number of advantages including (a) no taxes when you withdraw money from the account (at normal retirement age); ( no minimum distribution requirements regardless of your age; © ability to will the account to your heirs. As such, I prefer the Roth IRA to the traditional IRA. HOWEVER, any money that you rollover from a 403B, traditional 401K or traditional IRA to a Roth will be taxed as ordinary income in the year of the transfer. (There was a bit of an exception in 2010, but I believe that exception is no longer in place.) So, if you transfer the 403B to a Roth, you will have to pay tax on the amount of the rollover. (As it is still a rollover, the tax would be just the addition to ordinary income rather than penalty.) Since you are moving to Thailand and will not (I assume) have further income in the USA, there is a way to avoid the tax. Basically, open both a traditional IRA and a Roth IRA. Rollover the 403B funds to the traditional IRA (there will be no tax on the rollover). Again assuming you have no USA income in 2012, you can transfer about $12,000 from the traditional IRA to the Roth IRA. While this transfer will be considered ordinary income, it will not be taxed because your personal exemption and standard deduction will be sufficient to bring that ordinary income down to zero. (If you have USA income, however, you need to lower the amount of the transfer accordingly in order to make the transfer tax free.) If you do this every year, your traditional IRA will eventually be fully converted to a Roth IRA. (Just be sure to check the exemptions and personal deduction each year so you know how much you can transfer.) You get the benefits of the Roth (including no tax on distributions down the road) without having to pay any tax.

3. There are a lot of ways to transfer the funds to Thailand, as some posters have already noted. For myself, I opened my IRA accounts with E*Trade and I also opened a regular bank savings account with E*Trade bank. So, I sell funds from my IRA and then transfer the money to my E*Trade bank savings account; then I can withdraw the funds at an ATM or have E*Trade wire to my Thai bank account. Very easy. Bank of America does have a similar arrangement with Banc of America Securities where you can easily transfer the funds from the IRA account to a bank account and then use ATM, wire transfer, etc .

IMPORTANT!!!! NOTE!!!! I'm not sure from reading your original post, but it sounds like you are planning to withdraw the money from your new IRA relatively soon. Please note that any withdrawals from an IRA before you reach the age of 59 1/2 are subject to penalty as well as being included in ordinary income. So, even if you rollover the funds this year (2011) tax free and penalty free, you will still be charged taxes and penalties if you take money out next year or any year before you are 59 1/2 years old. Again, if you keep your withdrawals to less than $12,000 a year (with no other USA income), you can get away with not paying any tax due to the personal exemption and standard deduction as noted in #2 above; the penalty, however, is not negotiable and you will be charged a 10% penalty. From a financial point of view, 10% is a huge penalty and will ravage your IRA account (not only do you lose the 10% immediately, but you lose the potential of future earnings on that money effectively increasing the penalty/damage to as much as 100% or more over the life of the IRA). So, think very carefully before withdrawing any money before you are 59 1/2 years old.

Hope this helps.

[Pib]

On the money transfer part here is what I did:

1.Opened a bank account in Thailand with Bangkok Bank.

2. Arranged with my U.S. bank to be able to initiate a funds transfer monthly from my U.S. bank by email. This meant I had to have some forms faxed to me here in Thailand, fill them out and sign them, and fax them back to my U.S. bank with my signature on them. I provided my Bangkok Bank account number, the account name, and the bank location to my U.S. bank.

3. Once that was approved they mailed me a code number I could use to initiate a funds transfer.

4. Now when need funds transfered to Bangkok I contact my U.S. bank. They transfer the funds to me through a SWIFT transfer via the Bangkok Bank in New York. It takes 3 to 5 days...the five days being if it is over a Thai holiday or a weekend.

5. I am charged a fee by my U.S. bank for each transfer, but Bangkok Bank does not charge me a fee. I recieve the funds in Baht, the exact amount depending on the local (Bangkok) Dollar/Baht exchange rate on the day it is credited to my account in Thailand.

I've been doing it that way for years. As a dual citizenship Thai I doubt you would have any problem opening a Bangkok Bank account here in Thailand (foriegners here often do have problems opening an account with a Thai bank).

A final point...money transfered INTO Thailand may be a problem if you ever want to take it OUT of Thailand later. For that reason I would advise only bringing in the amount you need to live...or what you are willing to leave here in Thailand. (As a dual national I believe you will have the right to buy property or even land here in Thailand...a foriegner could have legal problems doing that).

As to the IRA question I'm really not qualified to give a good answer on that part.

Don't use SWIFT as it much more expensive than an ACH transfer. Maybe you really meant ACH transfer since you said the transfer takes 3-5 days which can be the typical time for an ACH transfer depending on how fast the sending bank actually sends the funds, business days/holidays/etc....SWIFT transfers normally occur in a day or two...sometimes hours...but you usually pay a much higher fee for a SWIFT transfer. Plus, get a bank/financial institution that allows you to do "online banking" ACH or SWIFT transfers in case your current bank account don't provide online transfers....maybe the code you mentioned allows you to do the online transfers versus calling them to initiate the transfer. You sure you don't pay any Bangkok Bank foreign currency receipt/conversion fee for the electronic funds transfer? Their standard fee is 0.25% (200 baht minumum or 500 baht maximum) for wire/SWIFT/ACH transfers...please tell us how you manager to avoid a the Bangkok Bank wire currency receipt/currency conversion fee...Plus, if using the Bangkok Bank New York Branch routing number to do the transfer there is an additional fee accessed by the NY Branch as the funds flow through them, usually in the $5-10 range depending on the amount transferred....or are you getting reimbursed by your sending bank for such fees. What bank/financial institution do you use, as this may be good info for us other expats to sign-up for? Thanks.

[jerryb78]

Thx guys. that was really quick. advice and suggestions will save me heart ache and wallet ache. LOL

no, once i am release from my employment here in USA, i will have no income (reported and unreported income) from USA. Really I wish i can get unemployment pay after i quite my job.

( i cant get unemplyment pay if i quite my job right? correct me if i'm wrong)

And to answer what is my intention with the 403B account? I do not want to cash it out or want to use that money any time soon. but the reason i ask is to prepair my self if i ever need this money for any reason. and i mean need it quick!!!!! i believe that pulling it out from a Roth IRA or IRA account will take at 4-6 week of paper work and red tape before i actually get the money. ( from my precious experiance dealing with 401K from my previous employer ) Please correct me if i am wrong. i have enough saving to get by for the entire year (or more) with out touching this money....assume i'm not working at all. Yeah....right I got to have a job line up before i even get there. no way i'm moving if i have no job line up.

i basically need a buffer in case of emergency.

thx to vegastim for advice and warning. i'm gonna go and find Schwab here in San francisci and see if i can do something and see what they will advice me. I am with Fidility right now. they are good company, but they are not avalaible in Thailand. I will also check with Bank of America and find the right person that know what they are talking aobut. most of these guy are run of the mill, no knowledge of internation banking. got to find the right one that know their work well.

i ask my co-worker and they suggest that i check into ING Bank, Charles Schwabb and Bank of America. if you were me, who will you like to work with? I'm leaning toward Charles Schwabb right now. seems to have some positive image from what i have seen. any suggestion on who to bank with?