Financial challenges for American expats in Kazakhstan: challenge 2 – frozen IRAs and pensions
Written by Dermot Monaghan on January 10, 2017.
As discussed in my previous post the investment options for American expats living abroad have been severely limited by FATCA legislation introduced in 2010. While FATCA was brought in to reduce money laundering and tax evasion, it has also affected millions of Americans who are merely trying to maintain US bank or brokerage accounts but who don’t have sufficient funds invested to make it worthwhile for a financial institution to carry out all the steps to comply with the stringent new tax reporting rules.
In this post I’d like to talk specifically about the problem of frozen IRAs and pensions which is now affecting many US expats as a direct result of FATCA. In the past US non-residents could easily keep their IRAs and maintain their pension arrangements while they were posted abroad. This is no longer possible in the vast majority of cases with US pension providers such as Fidelity, Wells-Fargo and Vanguard refusing to take US expats on as clients and, worse still, freezing the accounts of clients when they move abroad as they don’t want to risk incurring hefty fines if mistakes are made.
Perhaps you have already received a letter from your pension provider to say that your IRA is frozen, or from your bank telling you that your account is being closed. The natural reaction to this is panic and I’ve certainly had a few alarmed and anxious clients in Kazakhstan contact me for exactly these reasons.
Fortunately, I am able to allay their fears and propose a solution to allow them to unfreeze those funds and invest them elsewhere in order to protect and grow their wealth as they did before they moved from the States to Kazakhstan.
In conjunction with Tilney Bestinvest, a London-based, award-winning asset manager, Infinity has developed a product specifically with US expats in mind which can roll over Traditional and Roth IRAS as well as 401(k)s in a way that keeps them subject to the same tax regime and regulations as prior to emigrating. This means that maximum contributions and withdrawal dates for example are kept the same. With over 28 billion USD of assets under their management it’s safe to say that you can trust TBI with your money. In fact, you may well find that the rate of return on your investments is better than it was previously!
I have already helped a number of clients in Almaty and Atyrau solve the dilemma of frozen IRAs and pensions and would love to do the same for you. Whether you’ve already suffered from the FATCA crackdown, or fear that you will in the future, I can answer any questions that you have on the subject and talk you through this handy solution which has been developed specifically with you in mind. Please do feel free to get in touch with me by email firstname.lastname@example.org , call me on +7 (747) 837 0469 or skype me at dermot.m.monaghan.