Caymen Island IRA?

What happens when you have pension plans in other countries?

QUESTION: Greg and his family have lived in the Cayman Islands for two years and put about $12,000 into a pension plan there.  Greg went to the bank and asked them to roll over the pension now that he’s moving back to the US, but was told he would have to cash out.  What should he do?  Also, is the money he made in the Cayman Islands taxable in the US?

ANSWER: The Cayman Islands are not a state of the US, so the IRS cannot penalize you for this pension plan.  It may be taxable income, but there will not be a penalty.

When you cash out a pension plan in the US you are hit with a 10% penalty plus about 30% in taxes.  But you’re cashing out a pension plan in a different country, so it doesn’t follow the same guidelines as taxes and retirement savings in the US.

You need to see a CPA to find out exactly what to do about your taxes and retirement savings while you were working out of the country