Your 401(k) and IRA abroad: keep, contribute or cash out?

Keep them, usually. Moving abroad doesn't close your 401(k) or IRA, but it changes who can contribute, how withdrawals are taxed and which country gets a say. Spoiler: Uncle Sam always gets one.

The short version

• You can keep your 401(k) and IRA after you move. The IRS doesn't care where you live. Your broker or plan administrator might, so check its rules on foreign addresses before you go.
• IRA contributions need taxable compensation. Income you exclude with the foreign earned income exclusion (Form 2555) doesn't count [2]. If you exclude everything, you usually can't contribute.
• The 2026 limits are $7,500 for an IRA and $24,500 for a 401(k), plus catch-up amounts if you're 50 or older [1].
• Withdrawals sent abroad have US tax withheld, and as a US citizen you can't opt out of withholding on payments delivered outside the US [4].
• Your host country may tax the account too. Some treaties respect US retirement accounts, many countries don't fully understand a Roth, and a US expat tax preparer can check your situation.

Keeping your accounts open after you move

A 401(k) or IRA is a US tax wrapper. It keeps its tax-deferred (or, for a Roth, tax-free) status no matter where you live, because the US taxes its citizens on worldwide income wherever they are [5].

Here's the catch: the practical risk is the account provider, not the IRS. Some US brokers and plan administrators restrict or close accounts once you give a foreign address. Common problems are:

• you can hold what you own but can't buy new funds
• you can't open a new IRA without a US address
• online access is blocked from some countries
• two-factor codes go only to a US phone number

Before you move:

1. Ask each provider in writing what happens if you update to a foreign address. Get the answer from the compliance team, not whoever picks up at the call center.
2. Consolidate. Old 401(k)s from past jobs can be rolled over to an IRA (or a current employer plan) while you still have a US address. A direct trustee-to-trustee rollover avoids the 20% withholding that applies to a check paid to you [4].
3. Keep a US bank account linked to your retirement accounts. It makes transfers and withdrawals simpler, and it affects withholding (see below).
4. Update beneficiaries. A move abroad, a foreign spouse or kids with two passports are all good reasons to check who inherits.

We cover broker restrictions in more depth in our guide to US brokerage accounts while living abroad.

Contributing from abroad

401(k)

You can only contribute to a 401(k) through a US employer's payroll. If you transfer abroad with a US company and stay on US payroll, you can keep contributing. If you take a job with a foreign employer, contributions stop, but the money already in the plan stays put and keeps growing.

IRA and Roth IRA

An IRA contribution can't be more than your taxable compensation for the year. IRS Publication 590-A says compensation doesn't include "any amounts (other than combat pay) you exclude from income, such as foreign earned income and housing costs" [2]. This is the trap that catches most expats, and it's easy to miss until your tax preparer points it out.

Choosing the foreign tax credit over the exclusion often makes sense in high-tax countries anyway, and it keeps the IRA door open. In places like Germany or the Nordics, that can be close to a no-brainer. Our guide to the foreign earned income exclusion vs foreign tax credit walks through that choice.

The 2025 and 2026 limits

Sources: IRS [1] and Publication 590-A [2]. The contribution deadline is the original April 15 due date, not the June 15 automatic extension for people abroad. For tax year 2025, that was April 15, 2026 [2].

Don't skip the married filing separately row. It matters abroad. Many Americans married to a non-American file separately, and the $10,000 phase-out means a direct Roth contribution is mostly off the table. Our guide to being married to a non-American covers the election to file jointly instead.

Withdrawals: what changes when you live overseas

The basic US rules are the same as they'd be back home in the States. Traditional 401(k) and IRA withdrawals are ordinary income on your US return. Withdrawals before age 59½ generally carry an extra 10% tax unless an exception applies. Qualified Roth withdrawals are tax-free in US terms.

Withholding on money sent abroad

IRS Publication 575 is blunt: "Nonresident U.S. citizens can't elect to be exempt from withholding on payments delivered outside the United States" [4]. If your IRA sends a distribution to a foreign bank, the provider withholds federal tax. You get it back as a credit when you file, but it ties up your cash for months, which nobody enjoys.

The simple fix is to have distributions paid into a US bank account in your name, then move the money abroad yourself. Our guide to sending money between the US and abroad covers how.

Required minimum distributions

You must generally start taking required minimum distributions (RMDs) from traditional IRAs and 401(k)s at age 73. The first one is due by April 1 of the year after you turn 73, and later ones by December 31 each year [3]. Roth IRAs have no RMDs for the original owner, and neither do designated Roth accounts in a 401(k) [3]. Missing an RMD costs a 25% excise tax on the shortfall, cut to 10% if corrected within two years, reported on Form 5329 [3].

How your host country taxes your US accounts

This is where living abroad really changes the game. Your new country may tax you as a resident on worldwide income, including your US retirement accounts. What happens depends on the country's own law and on any US tax treaty.

Common outcomes:

• Contributions: most countries won't give you a local tax deduction for paying into a US IRA. A US employer 401(k) may get relief under some treaties.
• Growth inside the account: many treaty countries defer tax until withdrawal, as the US does. Countries without a treaty, or with a narrow one, may tax dividends and gains each year.
• Roth accounts: a Roth's tax-free status is a US concept. Some countries treat Roth withdrawals as taxable income, or tax only the growth. Check before you count on tax-free income in retirement.
• Withdrawals: usually taxable in your country of residence, with the US also taxing them as your citizenship country. Under the treaty's saving clause, the US keeps its right to tax you, and you avoid double tax mainly through foreign tax credits on Form 1116.
• Lump sums: some countries tax a one-time cash-out harshly. Others offer a reduced rate. Timing a large withdrawal before or after a move can change the bill by a ballpark you'll notice.

Our guide to tax treaties and totalization agreements explains the saving clause in plain terms.

Don't move the money into a foreign fund

Rolling a 401(k) into a foreign pension is generally a taxable distribution in US terms. Investing your savings in local mutual funds or ETFs outside a retirement account can trigger the punishing PFIC rules. For most Americans abroad, the plain old US retirement account stays the cleanest place to hold long-term savings.

A pre-move checklist for your retirement accounts

1. List every 401(k), 403(b), TSP and IRA, with the provider's foreign-address policy.
2. Roll small or old plans into one IRA while you still have a US address.
3. Confirm online access and two-factor login will work from abroad.
4. Link a US checking account for distributions.
5. Decide between the exclusion and the foreign tax credit before you plan IRA contributions.
6. Check your host country's treaty, if any, for pensions and retirement accounts.
7. Update beneficiaries and keep copies of statements for both countries' returns.

If your accounts are large, or you plan a Roth conversion or big withdrawal around a move, a US expat tax preparer (or a cross-border adviser in your new country) can check your situation before you act. You can also compare notes in our community groups for Americans abroad.

Sources

1. IRS: 401(k) limit increases to $24,500 for 2026, IRA limit increases to $7,500
2. IRS Publication 590-A (2025), Contributions to Individual Retirement Arrangements
3. IRS: Retirement topics, Required minimum distributions (RMDs)
4. IRS Publication 575 (2025), Pension and Annuity Income
5. IRS: U.S. citizens and resident aliens abroad

Keep reading

• Foreign earned income exclusion vs foreign tax credit
• PFICs: why foreign funds hurt Americans
• Social Security abroad: payments and restrictions
• US brokerage accounts while living abroad