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Retirement plans for U.S. expats

If you moved abroad, working, and wondering about your options for saving for retirement, then this article is for you. Unlike in the U.S., it can be less obvious as there are the additional tax and investment considerations that make saving for retirement more complicated. Fortunately, with the right advice, it’s possible to save and is strongly encouraged. Saving by way of funding retirement plans (401k, IRA, Roth, SIMPLE, and SEP) are generally available to expats subject to U.S. tax. Many opt in to taking the Foreign Earned Income Exclusion (FEIE) and are then less likely to be eligible for a retirement plan. "While using the FEIE could preclude you from using some of the retirement funding options, such as traditional IRA, many taxpayers are however still eligible to make Roth IRA contributions as long as their income is below a certain threshold" ($135,000 single or $190,000 married). - Allyson Lindsey, Lead CPA, Bright!Tax US Expat Tax Services. The most that you can contribute to either the IRA or Roth IRA is $5,500, plus $1,000 if you're 50 and older. There are two major strategies to consider as you save for retirement. Most retirement plans, including the IRA, allow for tax-deductible contributions and then you pay taxes on distributions in the future. Roth IRAs, and a few others, don’t allow for the deduction up-front but distribute tax-free during retirement. You may want to consider the latter option if you think you'll retire back to the U.S. at a higher tax rate, but it depends. For the self-employed, and depending on various factors, you may be eligible for one of the following retirement plans:

  • SIMPLE IRA: You can contribute 100% of your eligible income up to $12,500, plus $3,000 for people 50 and older). The deadline to open a new SIMPLE IRA is October 1 in the year you would like to contribute.

  • SEP IRA: You can contribute 25% of your eligible income up to $55,000. This type of plan is the most flexible as you have until tax filing to open and fund a SEP.

  • Individual 401(k): This option is available for small business owners without employees (except a spouse). You can contribute as an employee for up to $18,500, plus $6,000 for people 50 and older. You can also make employer contributions, bringing the combined total to $55,000, plus $6,000 for people 50 and older.

Once you decide on the strategy that’s right for you, the next step is figuring out how to implement. If you’re abroad, a local bank or investment shop will generally not open a U.S. retirement plan. And, if you do open an account overseas, you’ll be subject to more IRS reporting requirements creating extra complexity. If you have a brokerage account in the U.S., they may not know that you’re overseas, and if they find out, they could close your accounts. Additionally, any mutual funds that you own may also be out of compliance. At Eureka Wealth Management, we use on a global investment platform that allows you to have retirement plans while you’re overseas. We use exchange-traded funds (ETF) which are compliant and help you manage your portfolio based on your risk tolerance, time horizon, and tax situation. We also offer advice on retirement, insurance, tax & estate strategies, cash flow, and net worth. Call us for a free initial consultation at +1 (760) 537-0791 or visit

Thank you, Bright!Tax, for your assistance with this article. You may contact them at

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