Navigating U.S. Retirement Accounts as an Expat
If you’re an American living abroad—or someone with historical ties to the U.S.—you may still hold one or more U.S.-based retirement accounts. From 401(k)s to IRAs, these accounts can offer valuable tax benefits, but managing them internationally brings additional layers of complexity.
Whether you’re still contributing or preparing to draw down in retirement, it’s important to understand what each account type does, how it’s taxed, and what considerations apply once you’ve left U.S. soil.
At Blacktower Financial Management, we support clients across borders and help them structure their retirement plans efficiently—especially those with U.S. financial assets.
Overview of U.S. Retirement Account Types
Here’s a breakdown of the most common U.S. retirement accounts and how they differ:
401(k) Plans
These employer-sponsored plans allow employees to contribute pre-tax income, deferring tax until withdrawals begin in retirement. Many employers also offer matching contributions, effectively providing a bonus toward your savings.
There’s also the Roth 401(k), which uses after-tax contributions. Withdrawals in retirement are tax-free if certain conditions are met.
Contribution limits for 2025:
- $23,500 for standard contributions
- +$7,500 catch-up for age 50+
- +$11,250 for those aged 60–63 (temporary 3-year increase under SECURE 2.0)
Traditional & Roth IRAs
IRAs (Individual Retirement Accounts) are not tied to an employer.
- Traditional IRA: May offer tax-deductible contributions, depending on income and coverage by a workplace plan. Withdrawals are taxed as ordinary income.
- Roth IRA: Contributions are after-tax, but qualified withdrawals are tax-free.
2025 Contribution limits:
- $7,000 annually
- $8,000 for those aged 50+
SEP & SIMPLE IRAs
These accounts cater to self-employed individuals and small business owners:
- SEP IRA: Allows contributions up to 25% of income, capped at $69,000 for 2025.
- SIMPLE IRA: Designed for businesses with fewer than 100 employees, offering both employee and employer contributions.
These accounts can offer high contribution flexibility but come with cross-border tax-reporting complications.
Other Plans: 403(b) and 457
These are designed for specific employment sectors:
- 403(b): For non-profit and public school employees
- 457: For state and local government workers
While less common among expats, they may still be relevant if you’ve worked in public service in the U.S.
Key Differences Between U.S. Retirement Accounts
| Feature | Traditional 401(k)/IRA | Roth 401(k)/IRA |
| Contributions | Pre-tax | After-tax |
| Tax on Growth | Tax-deferred | Tax-free |
| Tax on Withdrawals | Yes | No (if qualified) |
| Required Minimum Distributions (RMDs) | Yes (from age 73) | No (Roth IRA only) |
These structural differences matter significantly when building a cross-border retirement plan, especially considering currency risks and tax treaties.
Top Expat Considerations
1. Currency Risk
If your retirement accounts are held in USD, but your lifestyle expenses are in EUR, GBP, AED or another currency, then exchange rate fluctuations will impact your real retirement income. Consider building a currency buffer or diversifying assets where appropriate.
2. Cross-Border Taxation
Tax treatment of U.S. retirement income varies by country. Some nations recognise U.S. accounts as pension vehicles; others don’t. Without a double taxation agreement (DTA) in place—or without proper structuring—you may be taxed twice on the same withdrawal.
3. Reporting & Compliance
Expats often face dual reporting requirements—to the U.S. IRS and to their local tax authority. Failing to declare retirement accounts correctly can lead to fines or penalties.
For example, FBAR (Foreign Bank Account Report) and FATCA (Foreign Account Tax Compliance Act) may apply even when holding U.S. accounts from abroad.
4. Portability and Accessibility
Some U.S. custodians restrict account access or services once you move abroad. Others may freeze accounts if you update your residency to a non-U.S. address. Consolidating accounts into an expat-friendly IRA structure can improve flexibility and long-term management.
Can Expats Still Contribute to U.S. Retirement Accounts?
In some cases, yes—particularly if you still earn U.S.-sourced income. However, if you qualify for the Foreign Earned Income Exclusion (FEIE), this income may not count toward IRA contribution eligibility.
That’s why it’s essential to assess both U.S. income rules and local tax rules before contributing to any retirement account while living abroad.
How Technology Can Help You Stay Organised
Managing multiple accounts in different currencies and time zones is challenging—especially as you approach retirement.
That’s why Blacktower clients benefit from tools that:
- Track global net worth across jurisdictions
- Run multi-currency retirement simulations
- Account for inflation, FX volatility, and income projections
- Provide lifetime cashflow models that reflect your actual goals
Final Thoughts: Take Control of Your U.S. Accounts Abroad
Just because you’ve left the U.S. doesn’t mean your retirement accounts should be left behind—or neglected.
Whether you’re actively contributing, preparing to retire abroad, or managing rollover options, the key is cross-border knowledge.
At Blacktower Financial Management, we specialise in helping globally mobile individuals understand their U.S.-based retirement accounts and optimise their long-term outcomes. From tax-efficient drawdowns to legacy planning across jurisdictions, our advisers are here to help you get the most from your savings—wherever you choose to retire.
📞 Need help managing your U.S. retirement accounts from abroad?
Contact Blacktower today to speak with a cross-border financial adviser.
Site Sources
https://www.dol.gov/general/topic/retirement
Disclaimer: This blog is for informational purposes only. Investment advice and investment advisory services offered and provided through Blacktower Financial Management US, LLC. This communication is for informational purposes only based on our understanding of current legislation and practices which are subject to change and are not intended to constitute, and should not be construed as, investment advice, tax advice, tax recommendations, investment recommendations or investment research. You should seek advice from a professional before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.
This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.
Investment advice and investment advisory services offered and provided through Blacktower Financial Management US, LLC. This communication is for informational purposes only based on our understanding of current legislation and practices which are subject to change and are not intended to constitute, and should not be construed as, investment advice, tax advice, tax recommendations, investment recommendations or investment research. You should seek advice from a professional before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.