Can digital nomads contribute to U.S. retirement accounts while earning only foreign income?
Digital nomads can contribute to U.S. retirement accounts only when they have U.S. taxable compensation. Income excluded through the Foreign Earned Income Exclusion does not count as compensation for IRA or Roth IRA purposes, so nomads using the FEIE often cannot contribute. Those who use the Foreign Tax Credit retain full contribution eligibility.
How each strategy affects retirement contributions:
| Strategy used | IRA contribution allowed |
| FEIE excludes all earned income | No (no taxable compensation) |
| FEIE excludes partial income, remainder taxable | Yes, up to the non-excluded amount |
| FTC with no FEIE | Yes, full contribution up to limit |
| Solo 401(k) for self-employed | Same rules: need taxable compensation |
Contribution limits to keep in mind:
- Traditional / Roth IRA: $7,000 ($8,000 if age 50+)
- Solo 401(k) employee: $23,500 ($30,500 if age 50+), plus employer-side up to 25% of net SE earnings
- SEP-IRA: up to 25% of net SE earnings, capped at $70,000
Roth IRA income phaseouts also apply:
- Single: contributions phase out between $146,000 and $161,000 modified AGI (2024; 2025 numbers similar)
- MFJ: $230,000 to $240,000
Digital nomads often choose the FTC strategy specifically to preserve retirement contribution room when their country of residence has a decent income tax rate. Switching between FEIE and FTC requires care, as revoking FEIE results in a 5-year lockout.
For more on retirement strategy as an expat, see our Expat Retirement Planning.
Last updated on April 29, 2026
