Moving Your Retirement Account Overseas: What U.S. Expats Need to Know
- What Is Retirement Planning for Expats?
- What Happens to My Retirement Accounts When I Move Abroad?
- Can I Move My Retirement Accounts Overseas?
- What Happens to My 401(k) When I Move Abroad?
- NEW FOR 2026: Updated Retirement Contribution Limits
- Common Issues I Might Face with My 401(k) Overseas
- Can I Contribute to a 401(k) While Living Abroad?
- What About IRAs for U.S. Expats?
- How Can I Avoid Double Taxation on My Retirement Accounts?
- Special Retirement Planning Considerations for Expats
- Expat Retirement Accounts Don't Have to Be Complicated
- Related Resources
When an American moves to a foreign country, prudent financial planning should not be left behind in the United States. One critical aspect of this planning is retirement planning, and according to the U.S. Census Bureau, millions of Americans live abroad with retirement accounts they need to manage from overseas.
Your 401(k) and IRA don’t disappear when you move abroad. In most cases, you can maintain and manage these accounts from anywhere in the world. However, you’ll face important decisions about contributions, distributions, and tax treatment that require careful planning.
This article discusses how American expats should handle their retirement accounts, including what happens to your existing accounts, whether you can continue contributing, and how to avoid double taxation while building your retirement savings overseas.
Key Takeaways
- 401(k) and IRA accounts can be maintained and managed from anywhere, though limitations may apply based on account type, destination country, and local regulations
- A key concern for American expats with retirement accounts is double taxation, but the U.S. tax system offers Tax Treaties, Foreign Earned Income Exclusion, and Foreign Tax Credits to address this
- Most expats cannot continue contributing to 401(k)s after moving abroad permanently, but IRA contributions may remain possible depending on your income situation
What Is Retirement Planning for Expats?
Retirement planning involves implementing financial strategies to be comfortable and secure during retirement. By making proper investment and saving decisions when you’re younger (including minimizing your taxes), you can maximize your available financial resources when you’re no longer working.
Two common vehicles that are part of retirement planning in the United States are:
- 401(k): Sponsored by your employer, a 401(k) enables you to put aside a certain amount of your wages for your retirement in a tax-preferred manner.
- Individual Retirement Account (IRA): With an IRA, you save for your retirement in a tax-preferred manner while you’re working.
U.S. expats must consider specific issues with their retirement planning that don’t affect Americans living in the United States.
Planning your retirement from another country while your savings stay in the US?
What Happens to My Retirement Accounts When I Move Abroad?
When you move abroad, the fate of your retirement accounts depends on various factors, including the type of retirement account, the country of your residence, and local tax laws.
Your Options for Existing Accounts
401(k) and employer-sponsored retirement plans can be:
- Left with your former employer (most common option)
- Rolled over into an IRA or another qualified retirement account
- Taken as a distribution (usually the worst option due to taxes and penalties)
IRAs can be:
- Maintained remotely and managed abroad
- Continued with contributions as long as you have eligible earned income
- However, there may be tax implications and reporting requirements to consider
Foreign retirement plans, such as pension or provident funds, may be available in your country of residence and allow you to contribute as a resident. It’s crucial to understand the rules and regulations in your new country of residence, as they may impact your retirement savings.
Being aware of the options and implications can help you make informed decisions and safeguard your retirement savings as an expat.
Can I Move My Retirement Accounts Overseas?
When you move to a foreign country, you may be inclined to want to move everything with you, including your retirement accounts. However, it’s not easy to move your retirement accounts overseas.
Difficulty Finding Equivalent Foreign Retirement Account
One problem is finding an equivalent retirement account in your new foreign country. With the exception of specific specially structured corporate pension plans (which are not available to most American expats), there generally is no such thing as a “non-U.S.” 401(k) or IRA equivalent.
No Tax-Free “Rollover” to Foreign Retirement Account
A second problem is the withdrawal of funds from your U.S. retirement account and the transfer of such funds to a “non-U.S.” retirement account, which will be a taxable event in the United States. While U.S. tax law allows certain tax-free “rollover” transfers between U.S. retirement accounts, such tax treatment does not apply to transfers to “non-U.S.” retirement accounts.
In addition, if you transfer your retirement account before the age of 59½, you may be subject to a 10% penalty, as well as tax liability.
Better approach: Keep your U.S. retirement accounts intact while building separate retirement savings in your country of residence. This maintains tax-deferred growth in the U.S. while you also contribute to foreign retirement plans.
What Happens to My 401(k) When I Move Abroad?
When moving abroad permanently, it’s generally true that 401(k) and IRA accounts can be maintained and managed from anywhere in the world. However, there may be limitations and restrictions based on the type of account, the destination country, and local retirement account regulations.
Rollover Options for Traditional 401(k) When Leaving a Job
When leaving a job, you have options for your traditional 401(k) account:
- Roll it over into an IRA or another qualified retirement account
- Transfer to a Roth IRA (though this is a taxable event)
- Roll into another employer’s 401(k) plan
- Leave it with your former employer
- Take a distribution (not recommended due to taxes and penalties)
Leaving it with your former employer or rolling it into an IRA are typically the most advantageous options for managing your retirement savings.
Tax Implications of Transferring Funds to Roth IRA
Transferring funds from a traditional 401(k) or traditional IRA to a Roth IRA is possible, but it’s a taxable event and may result in immediate tax liabilities. Transfers like this resulting in tax due now are often done as future distributions from Roth IRAs are typically not taxed. Careful consideration should be given to the potential tax consequences before making such a transfer. Seeking professional tax advice is recommended.
Portability of Roth IRA and Other Investment Accounts
It’s generally true that Roth IRAs and other investment accounts, such as brokerage accounts, are portable and can be maintained and managed even if you move abroad. However, there may be implications in terms of tax treatment, reporting requirements, and other regulations in the country you’re moving to.
NEW FOR 2026: Updated Retirement Contribution Limits
Important update: The IRS increased retirement contribution limits for 2026:
- 401(k) contributions: $24,500 (up from $23,500 in 2025)
- 401(k) catch-up (age 50+): $8,000 (up from $7,500)
- 401(k) catch-up (age 60-63): $11,250 special provision
- IRA contributions: $7,500 (up from $7,000)
- IRA catch-up (age 50+): $1,100 (up from $1,000)
While these limits apply to all Americans regardless of where you live, most expats face restrictions on contributions while living abroad. Learn more about 401(k) rules for expats, including detailed contribution requirements and withdrawal taxation →
Common Issues I Might Face with My 401(k) Overseas
Given that there are still some common problems expats face in moving their retirement accounts overseas, many U.S. expats decide to leave their 401(k) in the United States. Some possible situations are mentioned below.
U.S. Retirement Plan Administrators May Be Unwilling to Work with You
Some U.S. retirement plan administrators are unwilling to work with a person who no longer lives in the United States. In some cases, they may freeze the 401(k) (in terms of not accepting new contributions to the 401(k)), and in other cases, they may even close the 401(k). You must retain a U.S. retirement plan administrator who can work with U.S. expats.
Common expat-friendly custodians include Fidelity, Vanguard, and Schwab, though policies can change.
Currency Risk
The 401(k) is likely held in U.S. dollars, but you’ll ultimately spend the funds in your foreign country of residence’s different currency. This creates currency risk if the U.S. dollar declines in purchasing power relative to your local currency, resulting in a decline in the valuation of the 401(k).
Foreign Taxation of Funds in 401(k) Account
While the 401(k) account is subject to favorable tax treatment in the United States, such may not be the case in your foreign country of residence. It’s possible that you’re subject to taxation on the funds in the 401(k) account in your foreign country. U.S. tax treaties and the Foreign Tax Credit can help address double taxation concerns.
Can I Contribute to a 401(k) While Living Abroad?
In general, no. To contribute to a 401(k) plan, you must be working for a company that offers a 401(k) plan while you’re overseas, and you usually must be on a temporary foreign assignment with the expectation of returning to the U.S. within a few years.
It’s possible for any foreign company to offer a U.S.-based 401(k) plan, but they must follow all of the strict eligibility rules that apply to 401(k) plans. Typically, only foreign companies with many U.S. employees would even consider offering a 401(k) plan due to all the complicated statutes and regulations that need to be met.
However, depending on your specific circumstances and the tax laws of the country you reside in, you may have other retirement savings options available, such as contributing to an individual retirement account (IRA), a Roth IRA, or a foreign retirement plan.
For detailed information on 401(k) contribution limits, withdrawal rules, and how FEIE and FTC affect your 401(k) strategy, read our comprehensive 401(k) guide for expats.
What About IRAs for U.S. Expats?
IRAs for U.S. expats are subject to many of the same issues as 401(k)s, including:
- Some U.S. retirement plan administrators are unwilling to handle an IRA for a person who no longer lives in the United States
- Currency risk exists (the U.S. dollar may decline in purchasing power relative to your local currency, effectively reducing the valuation of the IRA)
- Funds in the IRA may be subject to taxation in your foreign country
- You need taxable earned income that is not subject to the Foreign Earned Income Exclusion to support a contribution to an IRA
The FEIE and IRA Contribution Dilemma
One technique to avoid double taxation of income for a U.S. expat is to rely on the Foreign Earned Income Exclusion (FEIE). The Foreign Earned Income Exclusion allows you to exclude certain income earned outside of the U.S. from U.S. taxation using Form 2555.
However, any earned income that is excluded from U.S. taxation because of the Foreign Earned Income Exclusion cannot be relied on to support a contribution to an IRA account. This income would typically need to be invested in a non-retirement investment account that is taxed annually on all interest, dividends, and capital gains.
When You CAN Contribute to an IRA as an Expat
Any taxable earned income of an American expat above the Foreign Earned Income Exclusion amount (for the 2025 tax year, above $130,000) might be able to be contributed to a tax-favorable retirement account, but numerous limitations and penalties could easily apply.
Example: If you earn $150,000 and use the full FEIE of $130,000, you have $20,000 of taxable income remaining. This $20,000 can support IRA contributions up to the annual limit ($7,500 for 2026, or $8,600 if you’re 50 or older).
Strategic Consideration: FTC vs. FEIE for IRA Eligibility
Some expats choose to use the Foreign Tax Credit instead of (or in combination with) the FEIE specifically to maintain IRA contribution eligibility. The Foreign Tax Credit doesn’t eliminate income from your return, it just provides a dollar-for-dollar credit for foreign taxes paid. This means your income remains as eligible compensation for IRA purposes.
Learn more about FEIE vs. FTC strategies to determine which approach works best for your retirement planning goals.
How Can I Avoid Double Taxation on My Retirement Accounts?
A key concern for American expats with retirement accounts is double taxation: the risk of retirement account income being taxed in both the United States (based on being a U.S. citizen) and a foreign country (based on residing in or deriving income from such foreign country). Taxes are a significant burden in one country, let alone paying taxes on the same income in two countries.
Fortunately, the U.S. tax system offers three possible provisions to reduce this risk of double taxation:
1. Tax Treaties
The U.S. has agreed to tax treaties with many foreign countries. These tax treaties can determine whether the U.S. or the applicable foreign country (and most importantly, not both jurisdictions) can tax the retirement account income.
Many treaties have specific provisions for retirement income that can significantly reduce or eliminate taxation in one of the two countries.
2. Foreign Earned Income Exclusion
The Foreign Earned Income Exclusion allows you to exclude from U.S. taxation certain income earned outside of the U.S. If applicable, the Foreign Earned Income Exclusion can subject retirement account income to a single level of taxation in the foreign country and not in the United States.
For the 2025 tax year (filed in 2026), you can exclude up to $130,000 of foreign earned income.
3. Foreign Tax Credit
The Foreign Tax Credit affords a dollar-for-dollar credit against U.S. tax liabilities for certain taxes you paid to a foreign government. With the Foreign Tax Credit, you can address the double taxation problem by, in effect, “netting” the foreign tax liability against U.S. tax liabilities.
This is particularly valuable for expats in high-tax countries where foreign taxes paid often exceed U.S. tax liability, resulting in zero U.S. taxes owed.
Special Retirement Planning Considerations for Expats
If You’re Planning to Return to the U.S.
Returning to the United States after years abroad, you’ll need to consider:
- What to do with any foreign pension or retirement accounts you accumulated
- How to restart U.S. retirement contributions
- Tax treatment of distributions from foreign retirement plans
If You’re Retiring Abroad
Want to retire abroad? consider:
- How your Social Security benefits will be taxed
- Whether your destination country taxes U.S. retirement distributions
- Required Minimum Distributions (RMDs) starting at age 73
- Time zone considerations for meeting distribution deadlines
If You’re Self-Employed Abroad
Self-employed expats have different retirement options:
- Solo 401(k) requires U.S.-source self-employment income
- SEP IRA requires taxable earned income (not excluded under FEIE)
- Traditional or Roth IRA contributions require eligible compensation
The challenge is maintaining eligible income that hasn’t been entirely excluded under the FEIE.
Expat Retirement Accounts Don’t Have to Be Complicated
Managing your retirement accounts while living abroad requires careful planning, but it’s entirely manageable with the right guidance. The key is knowing:
- Which accounts you can maintain and which require special handling
- How to avoid double taxation through treaties, FEIE, and FTC
- Whether you can continue contributing (and if so, how much)
- How distributions will be taxed in both countries
Greenback is an American company founded in 2009 by U.S. expats for expats. We focused exclusively on expat taxes and always have. Many of our CPAs and Enrolled Agents are expats themselves, and because they live in 14 time zones, they experience firsthand the challenges of living abroad. They have the knowledge and patience to help you manage the complicated U.S. tax system and your local rules.
No matter how late, messy, or complex your return may be, we can help. You’ll have peace of mind, knowing that your taxes were done right.
If you’re ready to be matched with a Greenback accountant, click the get started button below. For general questions on expat taxes or working with Greenback, contact our Customer Champions.
Ready to build a retirement plan that matches your life abroad?
This article is for informational purposes only and does not constitute tax, legal, or financial advice. Tax laws are complex and subject to change. For advice on your specific situation, please consult with a qualified tax professional who specializes in expat taxation.
Related Resources
- 401(k) Rules for U.S. Expats: Contributions, Withdrawals, Taxes
- Roth IRA for Expats: Rules, Benefits, and Contribution Limits
- Foreign Earned Income Exclusion: How to Save on Taxes Abroad
- Foreign Tax Credit: How Expats Can Reduce US Taxes
- FEIE vs FTC: Which Expat Tax Strategy Saves You More Money?
- Filing Form 2555 for the Foreign Earned Income Exclusion
- Retired Abroad Tax Guide for Americans
- U.S. Tax Treaties: Complete Guide for American Expats
- Returning to the US with a Foreign Pension? Here’s What You Need to Know
- How to File Self-Employment Tax as US Expat
