Retirement abroad can mean a new country, a different lifestyle, and perhaps a lower cost of living. But while you may be ready to cross borders, much of your retirement money may remain firmly connected to the United States.

Your Social Security benefits, old 401(k)s, and IRAs don’t simply disappear when you move. What can change is how you access them, how they’re managed, and how they’re taxed.

That makes knowing what you own and how the rules apply to you an important part of preparing for retirement overseas.

Your Retirement Money Can Follow You, but the Rules May Change

Start by taking inventory. Where are your retirement accounts held? Do you have savings sitting in a former employer’s plan? What benefits have you earned, and will moving abroad affect them?

For Americans who have worked in several countries, the picture can become even more complicated. You might have Social Security benefits in the U.S., an old 401(k) from a previous employer, and a pension in your current country of residence.

If you’re considering Israel, for example, understanding the broader financial considerations for Americans retiring to Israel can help you prepare for these cross-border issues.

The good news is that moving abroad doesn’t mean giving up what you’ve already earned. But there are a few questions worth answering before you pack your bags.

Three Retirement Questions U.S. Expats Frequently Ask

Does Moving Abroad in Retirement Actually Reduce My Social Security Check?

No. Moving abroad  does not reduce the Social Security benefit you’ve earned.

There’s also good news for retirees with foreign pensions. The Social Security Fairness Act ended the Windfall Elimination Provision and Government Pension Offset. For benefits payable from January 2024 onward, these provisions no longer reduce Social Security benefits for people receiving pensions from work not covered by Social Security, including certain foreign pensions.

Moving isn’t the only way retirement money can get complicated, though. Sometimes the bigger problem is simply finding it.

How Do I Find Retirement Money I Left Behind When I Changed Jobs or Countries?

Start with an old statement. It should identify the plan administrator you can contact about your account. If you don’t have one, call your former employer and ask who administered the retirement plan.

You can also search the U.S. Department of Labor’s Retirement Savings Lost and Found database for certain private-sector workplace retirement plans.

Once you locate an old 401(k), you can determine whether keeping it there or rolling it into an IRA makes sense. For expats, this decision deserves particular care because some U.S. custodians restrict accounts after you move overseas.

But what if you’re not just changing countries? What if you’re changing citizenship?

What Happens to My 401(k) or IRA If I Renounce U.S. Citizenship?

Renouncing U.S. citizenship  does not mean giving up your 401(k) or IRA. Those investments still belong to you.

What can change is their tax treatment and the amount withheld when you take distributions. Your situation may depend on your tax residence, account type, and whether you’re considered a “covered expatriate.” The IRS rules for expatriation and retirement accounts include special treatment for certain deferred compensation and tax-deferred accounts.

That’s why understanding the tax consequences before renouncing citizenship is particularly important.

Take Your Retirement Plan With You

Your address, employer, and even citizenship may change, but the retirement wealth you’ve accumulated doesn’t simply vanish. What changes are the rules surrounding it.

Before making a major international move, take inventory of your retirement assets and understand how you’ll access and manage them abroad.

At Nardis Advisors, we help Americans living overseas navigate their U.S. investments and retirement planning so their finances can move with them. If you have questions about your retirement assets abroad, schedule a consultation with Nardis Advisors to discuss your financial needs.

Disclaimer

Nardis Advisors LLC (“Nardis”) is a Registered Investment Advisory Firm regulated by the U.S Securities and Exchange Commission in accordance and compliance with applicable securities laws and regulations. Registration does not imply a certain level of skill or training. Nardis does not render or offer to render personalized investment advice through this medium. The information provided herein is for informational purposes only and does not constitute financial, investment or legal advice. Investment advice can only be rendered after delivery of the Firm’s disclosure statement (Form ADV Part 2) and execution of an investment advisory agreement between the client and Nardis.