Hi all–
Just had a tax meeting today in Denmark, and the Danish government like a fair few other governments, recognize 401k/trad IRA investments as retirement, but not Roths. This means you have to pay annual tax on the gains for your Roth, that you can’t touch until you’re 59.5.
This leaves us looking at pulling the money out and eating the tax/penalty. And my questions in case anyone knows are:
- is that money income in the US?
- is there anything particularly good to do with the money? Beyond the obvious of buying a house (here)
- how has no one told us about this in all the posts/threads, financial advisors, etc that Roths are fairly commonly not acknowledged and are absolutely terrible if you plan to leave the US?
Thanks in advance. Sorry for my grumpy tone… I’m certainly grumpy
Different countries have varied tax agreements with the US. If you’re planning to go abroad for retirement it’s best to talk to an relevant tax expert rather than use internet info, though I think more developed countries tend to have decent resources. I do think that’s just a given no one on US reddit resources can be trusted as an expert on anything international. There are relatively few people who retire outside the US to a specific country, much less with FIRE.
That’s true, but “not acknowledging Roth” is not uncommon for countries, so I’m surprised to learn about it like this.
Hopefully this helps anyone not have to learn the hard way