Retirement Accounts and Moving Abroad: What Happens to Your 401(k) and IRA

Moving abroad does not change the US rules that govern your 401(k) and IRA. The accounts remain US accounts at US institutions, though each administrator sets its own policy on foreign addresses. What changes is everything around them: whether you can keep contributing, how withdrawals are taxed and withheld, and how your new country views accounts it did not design. Settle those questions before you leave, not at your first withdrawal.

This is general information. Your CPA and counsel confirm the details for your case.

The accounts stay American

A retirement account held at a US institution remains a US account after you move. For FBAR purposes, what decides whether an account is foreign is its location, not the nationality of the institution. ¹ And if you do hold a foreign account inside an IRA you own, or inside a retirement plan you participate in, the FBAR rules exclude it from your report. ²

Your tax position does not reset either. As a US citizen, your worldwide income, including retirement income, remains subject to US income tax wherever you live. ³ The question is not whether the US taxes your withdrawals, but how your new country treats them as well.

Contributions after you move

For 2026, the 401(k) elective deferral limit is $24,500 and the IRA contribution limit is $7,500. Savers aged 50 and over can add an IRA catch-up of $1,100, and the general 401(k) catch-up is $8,000. ⁴

Living abroad can quietly remove your ability to use those limits. IRA contributions depend on compensation, and compensation for IRA purposes does not include amounts (other than combat pay) you exclude from income, such as foreign earned income and housing costs. ⁵ If the foreign earned income exclusion removes all of your earnings from US tax, you may have nothing left that counts as compensation. Ask your CPA to model the exclusion and your contributions together, rather than one after the other.

Withdrawals: the same rules, different logistics

The age rules do not change with your address. Withdrawals from an IRA or retirement plan before age 59 1/2 are early distributions and generally carry an additional 10% tax unless an exception applies. ⁶ Required minimum distributions from traditional, SEP and SIMPLE IRAs and from retirement plans generally begin at age 73, while Roth IRA owners have none during their lifetime. ⁷

The logistics do change. For a retirement payment delivered outside the United States, you cannot elect out of federal withholding unless you certify that you are not a US citizen or resident, or an expatriate covered by section 877. ⁸ Budget for that withholding, and ask whether payments to a US account are an option.

If you consolidate accounts before you leave, most pre-retirement payments from a plan or IRA can be rolled over within 60 days, or moved by direct transfer. Taxes are withheld from a plan distribution paid directly to you, so the direct transfer avoids having to replace the withheld amount from other funds. ⁹

How the other country sees your accounts

Retirement income does not qualify for the foreign earned income exclusion: foreign earned income does not include pension or annuity payments, including Social Security benefits. ¹⁰ Tax treaties do not usually reduce your US tax either. US treaties contain saving clauses that preserve US taxation of US citizens and residents, so you generally cannot use a treaty to cut your US bill, apart from listed exceptions. ³

What a treaty may do is affect how your new country taxes the same income, and that depends on the country. Do not assume the destination recognizes the tax-deferred or tax-exempt status that IRAs and Roth accounts have in the US. Before you move, ask an adviser in the destination how it treats contributions, growth and withdrawals, and ask your CPA how any foreign tax interacts with your US return.

Social Security is a separate stream

If you are a US citizen, you can generally keep receiving Social Security payments while living abroad, as long as you are eligible and live in a country where the SSA can send them. ¹¹ Update your address and payment instructions before you go.

What this means for you

Your retirement accounts travel well, but not on autopilot. Keep them at US institutions, decide whether you will still contribute, and plan withdrawals around withholding, early-distribution rules and the destination's tax rules. The accounts are rarely the hard part; the interaction between two tax systems is.

What to do this month

• List every 401(k), IRA and Roth account, with the institution and beneficiary designations.
• Ask your CPA whether you will still have compensation for IRA contributions after the foreign earned income exclusion.
• Contact each administrator about foreign addresses, withholding and payment options.
• Ask an adviser in the destination how it taxes IRA and Roth withdrawals.

Common mistakes to avoid

• Contributing to an IRA when excluded income leaves you without eligible compensation.
• Taking a distribution paid to you instead of a direct transfer when consolidating accounts.
• Assuming a tax treaty reduces your US tax on retirement income.
• Assuming your new country treats a Roth account the way the US does.

The FNC angle

FNC looks at retirement accounts as part of the full move: where you will live, where you will bank and how income will reach you abroad. We help you choose a residence route and banking setup that work with distributions from US accounts. Your CPA handles the US tax treatment, and an adviser in your destination confirms the local rules. The aim is a plan in which your savings support the move rather than complicate it.