There are two kinds of retirement account:

• 401K - an employer-sponsored qualified pension plan
• Individual Retirement Account - a savings plan for an individual, with tax breaks similar to those of a pension plan

Employee Retirement Income Security Act of 1974 (ERISA)
administered by the U.S. Department of Labor
defines retirement accounts and sets standards to protect workers.
https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/retirement-plans-and-erisa-compliance.pdf

Terms

• The term “plan” often refers specifically to a 401K pension plan,
• but sometimes the term “retirement plan” can refer generically to either a 401K or an IRA.
• The term “qualified” means the plan meets qualifications specified by ERISA.
• A 401K plan is qualified.
• An IRA is not qualified, and is not a plan.

Typically a worker and/or his employer make contributions to the plan while the worker is working. When the worker retires, he begins to make withdrawals.

aka retirement distribution strategy, retirement income strategy, retirement drawdown strategy.

Some goals of a withdrawal strategy can include:

• provide income to the retiree
• maximize growth of the fund
• minimize total lifetime tax payments
• hold for heirs

Taking explicit RMD amounts results in excessive tax payments.

Vanguard: a guide to Retirement Withdrawal Strategies
https://investor.vanguard.com/investor-resources-education/article/retirement-withdrawal-strategies

• dollar plus inflation - in the first year take a fixed amount, sometimes 4% of the total portfolio, “the 4% rule”, then increase that amount each year to match inflation
• percentage of portfolio
• fixed dollar
• fixed percentage
• withdrawal buckets
• dynamic spending - hybrid of dollar plus inflation and percentage of portfolio

Kiplinger: 10 Ways Retirees Can Manage Income Distribution
https://www.kiplinger.com/retirement/ways-retirees-can-manage-income-distribution
three types of accounts:

• tax-deferred - 401K, IRA
• taxable - normal brokerage account
• tax-free - Roth IRA

Any amount can be withdrawn from an IRA and converted to a Roth IRA.
The amount withdrawn is taxed as ordinary income in the current year.
Future growth and earnings are tax free.

1. Take RMD from deferred, move to taxable account.
2. Take Roth from deferred, move to tax-free account.
3. Pay tax from taxable.

[Note. per IB:“You are eligible to convert to a Roth IRA if your modified AGI for the year does not exceed $100,000.” This rule was phased out in 2010. Any amount can be converted.]

When doing a Roth conversion:

• Request zero withholding.
  

• Pay the estimated tax yourself out of the taxable account.
  

• Withholding would reduce the amount ending up in the Roth.

IRA is available to US Tax Resident, and every US citizen is a US Tax Resident, regardless of country of residence.

Does not apply to me, because I have no contributions.
applies to earnings, not the contributions
the account must have been open for at least 5 years, and you must meet a qualifying event (e.g., directreaching age 59½, death, disability, or a first-time home purchase up to $10,000).
10% penalty for withdrawal before the 5-year mark
You only need to satisfy this 5-year rule once for all Roth IRAs you own; it doesn’t reset with new accounts.

Does not apply to me, because I’m old.
applies only to persons under age 59-1/2
each conversion has its own clock
10% penalty for withdrawal before the 5-year mark
applies only to conversion principal amount

A Roth account, as well as any IRA or 401K account, cannot be put in a trust. And it cannot be make a joint account.

During your lifetime, you cannot gift or transfer the Roth account to another person.

Non-spouse beneficiaries typically must follow distribution rules, such as withdrawing the funds within a certain timeframe (e.g., 10 years under the SECURE Act for most non-spouse beneficiaries).

Beneficiaries may keep the Roth IRA account and continue to enjoy tax-free growth for some time to come. How long?

• Eligible Designated Beneficiary (EDB) - Enjoys tax-free growth for many years, though required to take an RMD each year, based on life expectancy. Applies to siblings because they are less than 10 years younger than the owner.
  

• Designated Beneficiary (DB) - Enjoys tax-free growth for a maximum 10 years. Applies to nieces and nephews.

In any case, the beneficiaries may withdraw all of the money, tax-free, at any earlier time.

Most likely the beneficiaries will choose to split the account into separate accounts, one for each beneficiary, giving each the flexibility on when to withdraw funds.

Moving assets from one broker to another. Something we do only rarely. But when we do, it turns out to be a complex subject.

rollover - controlled by the IRS.
transfer - outside of the IRS, not taxable, no reporting required.

indirect - check goes from old broker to owner, then to new broker
direct - check goes from old broker to new broker

There are two ways to transfer assets directly from the old broker to the new broker without taking possession and without risking a potential tax liability.

• Trustee-to-trustee Transfer - Assets and cash transferred directly from broker to broker. The sending broker to the receiving broker. The resigning broker to the ? broker. The paperwork is initiated by the receiving broker.
  • In-kind transfer - so-called to indicate the securities are being transferred. They are NOT being sold by the old broker and repurchased by the new broker.
    

• Manual transfer - so-called to indicate this transfer is not being done through ACATS, probably because one of the parties is not a memer of an ACAT network.
  

• ACATS - a specific type of Trustee-to-trustee Transfer, executed through one of two ACAT networks of brokers and institutions. The simplest and most popular way to transfer nowadays.
  

• Direct Rollover - from 401K to IRA, assets sold and check sent directly from broker to broker.

In the fourth way, the old broker sends a check directly to the owner.
4. Indirect Rollover - The owner has to take possession of the funds temporarily, and deposit them with the new broker within 60 days. Furthermore, the old broker will have withheld 20% income tax. And so the owner must make that up, depositing that same additional amount into the new IRA.

This is the fallback position. The “worst-case”.
This is used when the giving broker does not participate in ACAT and is otherwise being uncooperative about giving up your shit.

• Old broker liquidates the old IRA, sends the proceeds to the owner, after withholding 20% for income tax.
• The old broker will issue a 1099-R making this a normal distribution.
• Owner receives the check and deposits it into his new IRA.
• Owner then deposits some of his own money into the new IRA to make up for the withholding amount.
• The new broker must recognize both of these deposits as an indirect rollover, and report them on Form 5498 as “rollover contribution”.
• Only one of this type of rollover is allowed in any 12-month period, so there is no confusion about which contribution goes with which distribution.

Transferring a Roth IRA from one custodian to another, such as from E*TRADE to Schwab International, is a straightforward process that doesn’t affect the Roth IRA’s tax status or the 5-year holding period, as long as it’s done correctly. Here’s what happens and how to handle it:

• Direct Trustee-to-Trustee Transfer:
  • The funds move directly from one custodian (E*TRADE) to another (Schwab International) without you taking possession of the money. This is the preferred method because:
    • It’s not considered a withdrawal or rollover.
    • There are no tax implications or penalties.
    • There’s no limit on how many times you can do this.
  • The 5-year holding period remains intact, as it’s tied to your first Roth contribution or conversion, not the custodian.
• Rollover (Indirect Transfer):
  • The custodian sends you a check or deposit, and you have 60 days to deposit the full amount into the new Roth IRA at Schwab International.
  • If you don’t complete it within 60 days, it’s treated as a withdrawal, potentially triggering taxes on earnings and a 10% penalty if you’re under 59½ and don’t meet an exception.
  • You’re limited to one rollover per 12-month period (across all IRAs), though this rule doesn’t apply to direct transfers.
  • This is less common for custodian switches due to the risk and paperwork.

https://www.irs.gov/taxtopics/tc413

• A rollover occurs when you withdraw cash or other assets from one eligible retirement plan and contribute all or part of it, within 60 days, to another eligible retirement plan.
  

• Any taxable eligible rollover distribution paid to you from an employer-sponsored retirement plan is subject to a mandatory income tax withholding of 20%, even if you intend to roll it over later.
  

• You can choose instead a direct rollover, in which you have the payer transfer a distribution directly to another eligible retirement plan (including an IRA). The 20% mandatory withholding doesn’t apply in a direct rollover.
  

• Note: This document uses the word “eligible” to describe a retirement plan, and to describe a distribution. Ineligible distributions: Certain distributions from an eligible retirement plan can’t be rolled over, including:

https://www.irs.gov/retirement-plans/plan-participant-employee/rollovers-of-retirement-plan-and-ira-distributions

• How do I complete a rollover:
  1. Direct rollover – If you’re getting a distribution from a retirement plan, you can ask your plan administrator to make the payment directly to another retirement plan or to an IRA. Contact your plan administrator for instructions. The administrator may issue your distribution in the form of a check made payable to your new account. No taxes will be withheld from your transfer amount.
  2. Trustee-to-trustee transfer – If you’re getting a distribution from an IRA, you can ask the financial institution holding your IRA to make the payment directly from your IRA to another IRA or to a retirement plan. No taxes will be withheld from your transfer amount.
  3. 60-day rollover – If a distribution from an IRA or a retirement plan is paid directly to you, you can deposit all or a portion of it in an IRA or a retirement plan within 60 days. Taxes will be withheld from a distribution from a retirement plan (see below), so you’ll have to use other funds to roll over the full amount of the distribution.
• Beginning after January 1, 2015, you can make only one rollover from an IRA to another (or the same) IRA in any 12-month period, regardless of the number of IRAs you own.
• The one-per year limit does not apply to:
  • rollovers from traditional IRAs to Roth IRAs (conversions)
  • trustee-to-trustee transfers to another IRA
  • IRA-to-plan rollovers
  • plan-to-IRA rollovers
  • plan-to-plan rollovers
• Direct transfers of IRA money are not limited.
  • This change won’t affect your ability to transfer funds from one IRA trustee directly to another, because this type of transfer isn’t a rollover (Revenue Ruling 78-406, 1978-2 C.B. 157). The one-rollover-per-year rule of Internal Revenue Code Section 408(d)(3)(B) applies only to rollovers.
• IRAs: An IRA distribution paid to you is subject to 10% withholding unless you elect out of withholding or choose to have a different amount withheld. You can avoid withholding taxes if you choose to do a trustee-to-trustee transfer to another IRA.
• Retirement plans: A retirement plan distribution paid to you is subject to mandatory withholding of 20%, even if you intend to roll it over later. Withholding does not apply if you roll over the amount directly to another retirement plan or to an IRA. A distribution sent to you in the form of a check payable to the receiving plan or IRA is not subject to withholding.

https://www.irs.gov/retirement-plans/retirement-plan-and-ira-required-minimum-distributions-faqs

• The RMD rules do not apply to Roth IRAs or Designated Roth accounts while the owner is alive. However, RMD rules do apply to the beneficiaries of Roth IRA and Designated Roth accounts.
  

• An IRA owner must calculate the RMD separately for each IRA they own but can withdraw the total amount from one or more of the IRAs. However, RMDs required from other types of retirement plans, such as 401(k) and 457(b) plans, must be taken separately from each of those plan accounts.

https://www.irs.gov/help/ita/do-i-need-to-report-the-transfer-or-rollover-of-an-ira-or-retirement-plan-on-my-tax-return

• This is an online tool.

https://www.investopedia.com/articles/personal-finance/092214/guide-401k-and-ira-rollovers.asp

• Indirect rollover
  • In an indirect rollover, the funds are paid to you and you deposit them in your account. You only have 60 days to deposit the funds into a new plan.
    

• If you take an indirect rollover, the IRS requires that your previous employer withhold 20% of your funds. Meanwhile, you’ll need to come up with that 20% to roll over the full amount of your distribution within 60 days.
  

• Direct rollover
  • A direct rollover is an electronic transfer from your old account to your new account, or a check made out to your new account. The money is not paid directly to you, so it cannot be counted as taxable income for the year.
    

• The direct rollover (no check) is the safest approach. You’re shifting assets directly from one custodian to another, without selling anything.
  

• The direct rollover is also known as a trustee-to-trustee rollover or an in-kind transfer.

https://irahelp.com/slottreport/taking-rmds-what-you-must-know-about-moving-your-ira/

• Transfer. A good choice for moving IRA funds is a direct transfer. With a transfer, your IRA funds will not be distributed from your IRA. You will not receive a check payable to you. Instead, the custodian will move the money directly from your existing IRA to the new IRA. The funds will be payable to the new custodian for the benefit of your IRA. Transfers between IRAs are not limited in frequency and are not subject to the 60-day rule. More good news is that you can transfer your required minimum distribution (RMD) and take it later in the year from your new IRA. You are not required to take the RMD prior to the transfer.
  

• Rollover. If you decide to go with a rollover, things will be a little more complicated. You will take a distribution of the funds in your IRA. The way the rules work, the first money distributed from your IRA in a year when you are required to take an RMD will be considered your RMD. There is no choice to take the RMD later. This rule is sometimes called the “first money out rule.” The RMD cannot be rolled over. …A final note about rollovers; you can only do one 60-day IRA-to-IRA or Roth IRA-to-Roth IRA rollover in a 12-month period.

https://irahelp.com/slottreport/clarifying-rollovertransfers-rules-when-rmd-due/

• If you do a 60-day rollover from an IRA (that is, the distribution is paid directly to you) in a year when an RMD is due, the RMD is required to come out first. That’s because RMDs are not eligible for rollover. The same rule applies to 60-day rollovers from 401(k)s.
  

• However, if you do a direct (trustee-to-trustee) transfer (that is, the funds are paid directly to another custodian) instead of a 60-day rollover, the rules are different for IRAs and plans.
  • If the transfer is from an IRA, the RMD does not have to be distributed before the remaining amount can be transferred.
    

• You do not have the same flexibility with an RMD if the direct transfer is made from a company plan [401k ed.]. In the eyes of the IRS, a company plan transfer is a distribution and then a rollover. Repeat after me: RMDs can’t be rolled over. So, whether it’s a 60-day rollover or a direct transfer from a plan, the RMD must be paid first.

https://irahelp.com/slottreport/7-things-you-need-know-about-once-year-rollover-rule/

1. The once-per-year rule applies in aggregate to IRAs and Roth IRAs.
2. The rule does not apply on a calendar basis.
3. The rule does not apply to Roth conversions.
4. The rule also does not apply to rollovers from employer plans…
5. Direct transfers avoid the rule.
6. Checks made out to a receiving IRA qualify as trustee-to-trustee transfers.
7. Violating the once-per-year rule has serious consequences. Don’t mess around with the once-per-year rollover rule. The consequences are too severe.

A rollover occurs when you withdraw cash or other assets from one eligible retirement plan and contribute all or part of it, within 60 days, to another eligible retirement plan. Any taxable eligible rollover distribution paid to you from an employer-sponsored retirement plan is subject to a mandatory income tax withholding of 20%, even if you intend to roll it over later.

You can choose instead a direct rollover, in which you have the payer transfer a distribution directly to another eligible retirement plan (including an IRA). The 20% mandatory withholding doesn’t apply in a direct rollover. The direct rollover is also known as a trustee-to-trustee rollover or an in-kind transfer.

A rollover is a distribution, meaning the assets have been sold and converted to a check.
If the check is made out to me (indirect rollover), it is subject to 20% withholding.
If the check is made out to the receiving firm (direct rollover), no withholding.

Rule: one rollover per year.

A transfer of assets from one trustee to another without a sale is not a distribution, is not a rollover.

Not subject to the “one rollover per year” rule.

Can this be done with ACATS?

Transfer of a 401K is considered a distribution and a rollover.
Therefore, the RMD must be done before the transfer.
Can the RMD be done as a transfer from a 401K to a taxable account?

Transfer of an IRA is not considered a distribution.
Therefore, the RMD can be done after the transfer at the new receiving firm.

IRS forms

1. 1099-R The old IRA custodian reports the distribution to the IRS using Form 1099-R.
   1. Box 7: 7 = normal distribution, G = direct rollover. For an indirect rollover, the old custodian is unaware of the owner’s intention to rollover, and so the code will be a 7.
      

1. 1040 The account holder reports the rollover on their tax return using Form 1040.
   1. Line 4a (for traditional IRAs), they report the total distribution from Form 1099-R,
      

1. Line 4b, they enter the taxable amount, which is typically $0 if the rollover was completed properly. This informs the IRS that the distribution was rolled over and not taken as income.
   

1. Form 5498 The new IRA custodian reports the deposit as a rollover contribution on Form 5498, which is sent to the IRS and the account holder. This form confirms the amount rolled over into the new IRA.

Notes

• If the full amount isn’t rolled over (e.g., if the account holder keeps some funds or misses the 60-day deadline), the difference is treated as a taxable distribution.
  

• The old IRA custodian may withhold 20% for federal taxes on the distribution, even for a rollover. The account holder must replace this withheld amount with other funds to complete a full rollover, or the withheld portion will be taxable.
  

• Only one indirect rollover is allowed per 12-month period across all IRAs, per IRS rules.
  

• The IRS may audit or request documentation (e.g., bank statements, IRA statements) to verify the rollover if discrepancies arise.
  

• Form 5498 is not issued by the custodian until May of the following year. This is because normal contributions can be made for a given tax year up until 15 April of the following year. This means an owner has to prepare and file his taxes before he has received the Form 5498, meaning he must keep his own records.

The old IRA custodian reports the distribution to the IRS using Form 1099-R. This form indicates the amount distributed and uses a specific code (e.g., Code G for a rollover) to show it’s intended as a rollover. However, for indirect rollovers, the custodian may not know the funds were rolled over, so the distribution might initially be coded as taxable (e.g., Code 1 for early distribution).

The new IRA custodian reports the deposit as a rollover contribution on Form 5498, which is sent to the IRS and the account holder. This form confirms the amount rolled over into the new IRA.

The account holder reports the rollover on their tax return using Form 1040. On Line 4a (for traditional IRAs), they report the total distribution from Form 1099-R, and on Line 4b, they enter the taxable amount, which is typically $0 if the rollover was completed properly. This informs the IRS that the distribution was rolled over and not taken as income.

The IRS relies on Forms 1099-R, 5498, and the taxpayer’s Form 1040 to track and verify indirect rollovers, ensuring compliance with tax rules. The IRS may audit or request documentation (e.g., bank statements, IRA statements) to verify the rollover if discrepancies arise.

If the full amount isn’t rolled over, the remaining portion is treated as a taxable distribution.

The old IRA custodian may withold 20% for federal taxes on the distribution. The account holder must replace this amount with other funds to effect a full rollover.

1099-R Box 7
two version os the 1099 preliminary rinql
1 - early distribution
G - rollover

complete list of 1000-R Box 7 Codes https://ttlc.intuit.com/turbotax-support/en-us/help-article/retirement-benefits/codes-box-7-1099-r-mean/L5OE1Zdgx_US_en_US

https://www.ibkrguides.com/kb/en-us/article-886.htm?Highlight=rollover

Form 5498 is an IRS tax form that reports information about Individual Retirement Account (IRA) contributions, including traditional IRAs, Roth IRAs, SEP IRAs, and SIMPLE IRAs.
It is issued by the IRA trustee or custodian and must be sent to both the taxpayer and the IRS by May 31 of the following year.
The form is for informational purposes only and does not need to be filed with the tax return.

Form 5498 includes details such as the amount of contributions, rollovers, Roth IRA conversions, and required minimum distributions (RMDs).
It also reports the fair market value (FMV) of the IRA account at the end of the year.
For Roth IRAs, contributions are not deductible on the tax return, but the form is still important for tracking basis and future distributions.

If a taxpayer made a traditional IRA to Roth IRA conversion, the value of the traditional IRA at the end of the year is needed for tax purposes, which can be found on the December account statement.
The form is also used to track RMDs, which are required for individuals aged 70½ and older.

In summary, Form 5498 is an important document for tracking IRA activity, but it is not required to be filed with the tax return.
It is recommended to keep the form for personal records, especially for Roth IRAs, as it may be needed for future distributions.

We can accept a check or an SDFCU-ACH into any of our three accounts.
I do not see a way to move funds from Individual to IRA.
But I assume we could move funds from Individual to bank and from there to IRA.

Check out from DWS for 100,000. 20,000 withheld, 100,000 reported on 1099-R
In the Rollover IRA account:
A check deposit from DWS for 80,000 - rollover contribution
plus an ACH deposit from me for 20,000 - rollover contribution to make up withholding
for a total indirect rollover of 100,000 - rollover contribution shown on Form 5498

The transfer or rollover becomes especially important when an expat finds his IRA account frozen or closed because of Know Your Customer (KYC) rules. In the worst case, when the old custodian believes his customer has left the US, the account is closed and a check sent to the customer’s American address on file. In this event, the customer must open a new IRA account at Interactive Brokers or Charles Schwab International, and deposit the check within 60 days.

I have no data from anyone who has experienced this, but the following articles describe the phenomenon.

26 Oct 2022
https://www.hrblock.com/expat-tax-preparation/resource-center/income/retirement/what-are-the-rules-on-iras-for-u-s-citizens-living-abroad/?srsltid=AfmBOor6uuYvzcwIsCEY9WlBwXJqgQgGM49DHmhLPYloqiDPDrmJqHUj
Yes, a U.S. citizen living abroad can have both a traditional and/or Roth IRA. The restrictions only come with making contributions—so, if you had an existing IRA before you moved abroad, you don’t have to get rid of it or transfer assets, but you may not be able to add to it while you’re overseas.

15 May 2023, by Ryan Frost
https://harrisonbrook.com/your-ira-in-the-us-is-closing-how-to-quickly-roll-over-as-an-expat/
When these firms discover a customer no longer physically resides in the United States, they may freeze their brokerage accounts or force American expats to liquidate their investment holdings.

14th March 2024 by Ryan Frost
https://harrisonbrook.com/can-american-expats-keep-an-old-address-on-their-us-brokerage-accounts/
Americans living abroad have been told by their banks or brokerage firms that their accounts have been restricted or need to be closed. It is a really stressful situation that many American Expats are going through right now. Many firms like Morgan Stanley, Fidelity, Wells Fargo, Merrill Lynch, and UBS have been part of this new trend. It is a common question for Expats.
Is it illegal to keep an old address?
As it is not illegal, should you disclose your current residential address to your investment institutions?

byline Henry Temple-Baxter
https://investmentsforexpats.com/what-happens-if-your-ira-account-closes-down-as-u-s-expat/
[This page is largely a duplicate of Ryan Frost’s article above.]

8 Jan 2025
https://www.greenbacktaxservices.com/knowledge-center/expat-retirement-planning/
First, some US retirement plan administrators are unwilling to work with a person who no longer lives in the United States. In some cases, they may freeze the 401(k) (in terms of not accepting new contributions to the 401(k)), and in other cases, they may even close the 401(k). Thus, you must retain a US retirement plan administrator who can work with US expats.

no date, no author byline
https://chasebuchanan.com/services/us-connected-persons/
Professional advice is even more important for US expats, given that a substantial proportion of banks and financial institutions based in America will not serve clients living abroad.

no date, no author byline
https://www.thewealthgenesis.com/insights/managing-your-us-ira-as-an-expat
“Many US custodians will enforce a transfer to another provider, giving you 60 days to transfer your IRA account to avoid restrictions.”
Note: Wealth Genesis charges a flat £3000 (GBP) fee for wealth planning