401k to Roth IRA while living abroad and claiming FEIE
Hi all, have been trying to research this subject on the internet but can't find anything specific to my scenario so thought I'd enlist the expert advice of this forum.
I'm 30 now and planning on retiring in the next 5 years to pursue the good life. I suppose it's financial independence but honestly I think reitiring and FI are the same things.
Anyway, I will have about 300k in my 401k upon retirement baring any market crashes. My plan is to move abroad and at least start out my new life working in the dive industry. I have been reading about 401k to roth IRA conversions to minimize tax burdens. The question is, can I move abroad full time and claim the foreign earned income tax exclusion and have my conversions to Roth IRA as part of that "income"? So i was thinking something along the lines of:
1. Convert 401k to Traditional IRA as soon as I leave my employer
2. Move abroad starting at the beginning of the tax year, where I will only need about 20-25k to live how I want to live. This will either be financed by dividends, and/or income earned as a dive professional.
3. Since i"ll be abroad the entire year, i am able to claim the foreign earned income tax exclusion of around $101k.
4. Does this mean I can legitimately roll over $75-80k of my IRA to Roth IRA without it being taxed?
I feel like I must be missing something here because that's just too easy of a way of a way to avoid taxes on such large sums of money.
Hi all, have been trying to research this subject on the internet but can't find anything specific to my scenario so thought I'd enlist the expert advice of this forum.
I'm 30 now and planning on retiring in the next 5 years to pursue the good life. I suppose it's financial independence but honestly I think reitiring and FI are the same things.
Anyway, I will have about 300k in my 401k upon retirement baring any market crashes. My plan is to move abroad and at least start out my new life working in the dive industry. I have been reading about 401k to roth IRA conversions to minimize tax burdens. The question is, can I move abroad full time and claim the foreign earned income tax exclusion and have my conversions to Roth IRA as part of that "income"? So i was thinking something along the lines of:
1. Convert 401k to Traditional IRA as soon as I leave my employer
2. Move abroad starting at the beginning of the tax year, where I will only need about 20-25k to live how I want to live. This will either be financed by dividends, and/or income earned as a dive professional.
3. Since i"ll be abroad the entire year, i am able to claim the foreign earned income tax exclusion of around $101k.
4. Does this mean I can legitimately roll over $75-80k of my IRA to Roth IRA without it being taxed?
I feel like I must be missing something here because that's just too easy of a way of a way to avoid taxes on such large sums of money.
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