Ask Terry Questions closing IRA moving to foreign country

closing IRA moving to foreign country

By Terry Savage on May 28, 2015 | Financial Planning / Retirement

I am 53 years old and am closing my IRA so I can move to the Philippines. Can I take my full amount approximently $100,000 what taxes will i have to pay

Terry Says:  Do you know that you don’t have to close the account.  Instead, you could continue to let it grow tax-deferred.  You don’t have to live in America to let the account continue to build retirement security.  The worst thing about your question is that since you are under age 59-1/2, you will have to pay a 10 percent PENALTY, on top of ordinary income taxes, if you take the money out!  I don’t know what your other taxable earnings will be this year, but likely you will have to pay at least 25% in ordinary income taxes, plus that penalty — which means that at least one-third of your money could go to the government — AND you lose all that future growth in the account.  That doesn’t look like a smart financial move.

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