Friday, August 17, 2007

Leaving Retirement Account with my Employer

I decided to leave my 403b account with my employer and invested in TIAA-CREF. Often I read about how this is a bad idea. But TIAA-CREF is a good (and cheap) fund manager. And foreign employer sponsored retirement accounts are exempt from Australian taxation as long as distributions are not taken. Distributions are subject to regular income tax just like a 401k or 403b is treated by the US IRS. A US IRA is (mostly) taxed just like a regular taxable account by the ATO (Australian Taxation Office).

The retirement specialist told me that retaining the account with them does not preclude rolling over the account at some later date to an IRA. Also they allow all of the distribution methods that TIAA-CREF facillitate. Not all employers do. And apparently there is no paperwork to complete.


Trisha#1 said...

Hi, Moom,

My employer would have allowed me to keep my retirement funds with them for only six months before slapping me with a regularly applied "management surcharge". Will yours do that to you? Just curious.

mOOm said...

Yes, I've heard about that sort of thing. I'll ask. But I doubt it will outweigh maintaining the tax deferred status. As I explained Australia will tax a US IRA account just like it was a regular taxable account.

mOOm said...

The answer is there are no additional fees for keeping the account with them.