Working abroad and effect on retirement

[nanana13]

If you decide to move abroad to work for several years, and as a result become ineligible to contribute toward U.S. retirement accounts, in what other ways will you decide to save for retirement? Would you rely on the country where you move to, or would you open up taxable accounts in the U.S.? Any other options?

[expatartist]

It depends much on how and where you plan to retire. Most countries have some sort of social insurance scheme, where a % of your paycheck is withheld until retirement age. When you plan to permanently leave the country, you can apply to take this with you and invest in ETFs or real estate or other investments in the currency/country of your choice.

ETA: Some employers have a 401k-like plan of matching your retirement contributions. Depends on local laws and company policy.

[Kwill]

I'm curious about the answer to this. I contributed to Social Security in the US, but I would have to work a few more years there to have enough points to qualify to receive it. Work done as a grad student doesn't count. Now I'm in the UK, and I don't know the situation here very well, apart from the pension I contribute to at work.

[yakamashii]

The following is my understanding of the situation. I know plenty of people who do the following, and am considering doing it myself, but would love to be corrected if and where I'm wrong:

If you forego the FEIE and instead declare your foreign income + FTC (assuming your country has a bilateral agreement with the US), you are eligible to contribute as far as the numbers are concerned. Actually contributing is a don't ask, don't tell situation (as for the rules against transacting across borders, the onus is on financial institutions and not individuals). You can contribute if you have an existing account that is linked to the US address you are using. If you mention that you're in a foreign country, they will refuse to work with you (this part I have experienced). If you don't mention it and they don't ask, the transactions go through (this is what I've heard). Presumably everything's hunky-dory when you return to the States in a matter of years, and your tax returns show that you had income from which to contribute.

[Undecided]

The following is my understanding of the situation. I know plenty of people who do the following, and am considering doing it myself, but would love to be corrected if and where I'm wrong:

If you forego the FEIE and instead declare your foreign income + FTC (assuming your country has a bilateral agreement with the US), you are eligible to contribute as far as the numbers are concerned. Actually contributing is a don't ask, don't tell situation (as for the rules against transacting across borders, the onus is on financial institutions and not individuals). You can contribute if you have an existing account that is linked to the US address you are using. If you mention that you're in a foreign country, they will refuse to work with you (this part I have experienced). If you don't mention it and they don't ask, the transactions go through (this is what I've heard). Presumably everything's hunky-dory when you return to the States in a matter of years, and your tax returns show that you had income from which to contribute.

Assuming a US person, that's fine as far as an IRA goes, but unless you're working for a US employer as an expat, you're unlikely to have a 401(k) abroad. Whether you can get credit toward social security depends on treaty arrangements between the US and your work country.