401(k), Roth IRA & Foreign Pensions for US Expats (UK, EU, 2026 Guide)

The 401(k) Question Most New Arrivals Get Wrong

Your employer is matching your 401(k) contributions. Your old pension in London or Dublin is still growing. You are not sure whether you are staying in the United States for three more years or thirty. The decisions you make on each of those accounts over the next five years will shape your retirement more than any single investment choice.

This article explains the retirement-account architecture facing a foreign national or dual citizen who has become a US tax resident, typically two to ten years into US tenure, and is trying to think clearly about a future that may or may not be in the United States. It walks through the four US accounts that matter, 401(k), Roth, IRA,HSA, how each works for a non-citizen participant, how the Traditional-versus-Roth choice depends on where the reader retires, how the home-country pension continues to be treated, why consolidation into a US401(k) is usually not available, how treaty positions change the picture in the UK, Ireland, Switzerland and continental Europe, and what happens when the reader eventually leaves the United States.

The Four Accounts That Matter, and Why the Answer Is Never "just Max Them All"

Four US retirement accounts matter for an expat already living in the United States. Each does something the others do not. The goal of this section is not to rank them, it is to explain them clearly enough that a reader can see what each one is actually doing on their behalf.

401(k) and employer matching

A 401(k) is an employer-sponsored retirement plan. Contributions are elective deferrals of salary, up to the annual elective deferral limit published by the IRS, with additional catch-up amounts for participants aged 50 and above. An employer match, where offered, is typically expressed as a percentage of the first few percent of salary the employee contributes. For a foreign-national participant, citizenship is not generally a gatekeeper to participation, the plan's own eligibility rules are. Traditional 401(k) contributions are pre-tax, reducing current US taxable income; Roth 401(k) contributions are after-tax, with tax-free growth and qualifying withdrawals.

Roth 401(k) and Roth IRA, the account no one explains properly

The Roth variants are funded with after-tax dollars. The growth is not taxed. Qualifying distributions in retirement are not taxed either. For an expat, the interesting question is whether another country will respect that tax-free treatment on retirement distributions. The United States does; not every treaty partner does. Roth IRA contributions are also subject to income-based phase-outs under US rules, which higher earners frequently miss.

The IRA contribution question (and the backdoor Roth)

A Traditional IRA is an individual retirement account with its own annual contribution limit and its own deductibility rules. For a taxpayer covered by a workplace plan, the deduction phases out with income. For higher earners, direct Roth IRA contributions phaseout entirely. The "backdoor Roth", a non-deductible Traditional IRA contribution followed by a Roth conversion, is a well-known route to Roth exposure for higher earners, but it interacts with the pro-rata rule: existing pre-tax IRA balances affect the taxable portion of the conversion.

HSA, the quietly powerful third account

The Health Savings Account is available to participants in a qualifying high-deductible health plan. Contributions are pre-tax, growth is tax-deferred, and qualified medical withdrawals are tax-free, a three-way tax advantage that few other US accounts match. After age65, non-medical withdrawals are taxed like a Traditional IRA but without penalty, so an HSA effectively doubles as a second retirement account. In my work with expat households, the HSA is by some distance the most under-used of the four accounts, because it is typically absent from the retirement architecture of the reader's home country.

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Traditional Vs Roth: Why the Right Answer Depends on Where You Retire

The most common framing of the Traditional-versus-Roth question is "what tax bracket will I be in when I retire?" That framing is incomplete for an expat. The larger question is "which country will I be tax-resident in when I retire?"

A Traditional 401(k) or IRA defers US income until distribution. If the participant is still US-resident at that point, the distribution is taxed as ordinary income in the US. If the participant has moved back to the home country, the taxation depends on two things: the US withholding on the distribution as a payment from a US plan to anon-resident, and how the home country taxes the pension under domestic law and the relevant treaty.

A Roth account takes tax in today. Distributions are not taxed by the United States. But the home country may still impose tax on the distribution, because many countries do not have a bespoke treaty provision that recognizes the Roth as tax-free. In plain English: an expat who retires back home may pay tax twice on the same dollar, first when it was earned, because it went into a Roth; second when it is distributed, because the home country taxes the pension. This is not a universal outcome, and several treaties address it, but it is a real planning issue that does not apply to US-resident retirees.

What I see most often is that the Traditional-versus-Roth question for expats in the US is better framed as a diversification question: holding some of each is often the only way to keep the future options genuinely open.

The Home-country Pension While You Are in the US, Three Separate Questions

The home-country pension does not vanish when the taxpayer becomes US-resident. It sits alongside the new US accounts, and it raises three separate questions every year.

Can I still contribute from the US?

In most cases, no. Home-country pension contributions typically require home-country earnings or residency. A UK SIPP, an Irish PRSA, a Swiss Pillar 3a account, these usually cannot receive new contributions while the holder is a US tax resident with US-source earnings. The account continues to exist; it just stops growing through new contributions.

Is the growth taxable to me now, or deferred by treaty?

Without a treaty provision, the US default would be to look through many foreign pensions and tax the income as it accrues, a concept most expats find surprising. Where a treaty position is available, it defers the US tax until distribution, matching the treatment of a US qualified plan. Whether a treaty position is available depends on the specific treaty and the specific account, which is why the country table later in this article matters.

What do I have to report?

Even where a treaty defers the US tax, the account is typically reportable, on FBAR if aggregate foreign financial accounts exceed $10,000, on Form 8938 above its own thresholds, and sometimes on Form 8833 to disclose a treaty-based return position. Reporting is separate from taxation: a non-taxable pension can still be a reportable one.

Why You (usually) Cannot Consolidate a Home-country Pension Into a US 401(k)

A question that comes up repeatedly is whether a UK SIPP or an Irish PRSA can simply be rolled into a US 401(k) or IRA, the way a US 401(k) can be rolled into an IRA when the participant changes jobs. In most cases, it cannot.

US tax law recognizes rollovers between US qualified plans. It does not generally recognize a rollover from a foreign scheme into a US plan. A transfer would ordinarily be a taxable distribution in the home country, a potentially taxable event in the US, and a contribution that the US plan is not able to receive outside its own contribution limits. The more useful question is usually not "can I consolidate?" but" how do I coordinate two parallel retirement architectures across borders?"

How Treaty Positions Change the Picture: UK, Ireland, Switzerland, Continental Europe

Four country groupings come up most often for expats in the US. The comparison table later in this section summarizes the picture; the narrative below names the specific treaty positions that drive it.

United Kingdom. The US-UK treaty contains provisions that recognize UK pension schemes, including SIPPs and workplace defined-contribution schemes, and permit a treaty-based deferral of US tax on growth inside the scheme. Distributions are typically taxed under the treaty's pension article, with primary taxing rights varying by lump-sum versus periodic payment and by residency at the time of distribution.

Ireland. The US-Ireland treaty includes a pension article that permits deferral of US tax on growth in an Irish pension scheme (including PRSAs) and governs the taxation of distributions. The Approved Retirement Fund (ARF) structure most Irish retirees use on retirement has its own interaction points with the US tax treatment of pension distributions.

Switzerland. Pillar 2 occupational pensions are generally covered by treaty deferral for US purposes. Pillar 3a individual pensions have a narrower set of recognitions, and the US treatment of Pillar 3agrowth is not uniformly agreed across advisers. Swiss pension lump-sum distributions, common on Swiss retirement, raise their own treaty and US-withholding questions.

Continental Europe. Germany, the Netherlands, Belgium, Luxembourg, Spain, Portugal and the Nordics each have their own treaty with the United States. The presence or absence of a specific pension article, and the way that article interacts with the employer scheme in question, varies by country. Where a clean treaty deferral is not available, US tax on the annual growth of the foreign pension can become a live issue, which is why the treaty analysis is worth doing before a reader's second or third year of US residency, not after.

What Happens When You Leave the US, Rollovers, Distributions, Withholding and Long-term Residents

Departure from the US is a distinct planning event, not a moment when existing accounts automatically unwind. A401(k) can be left with the former US employer, rolled into a US IRA, or distributed. Each has different US-withholding consequences. A direct distribution to a non-resident alien former employee is subject to US withholding, typically at the non-resident rate and potentially modified by treaty. An IRA can be held indefinitely as a non-resident. Distributions are subject to withholding; the treaty with the new country of residence governs the final tax picture.

The HSA, Roth IRA, and Roth 401(k) each have their own post-departure mechanics. HSA funds remain usable for qualified medical expenses anywhere in the world and continue to accrue tax-free growth. Roth accounts remain non-taxable for US purposes on qualifying distributions, subject to the home-country treatment already discussed. For long-term residents and green card holders in particular, the "expatriation tax" rules of §877A introduce an additional layer on departure, the specifics turn on how long the taxpayer has held that status and on the level of net worth and average tax liability.

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The Four US Accounts at a Glance

Illustrative comparison of the four main US retirement and health savings accounts for a foreign-national participantal ready in the US. This table is educational, not a recommendation, the IRS publications for each account type are the authoritative source for annual limits, deductibility thresholds, and distribution rules.

Source: Skybound 2026

Home-country Pensions: US Treatment at a Glance

Illustrative summary of US tax and reporting treatment of common home-country pensions held by a US tax resident. Treaty language and IRS interpretation change; this table is educational and is not a substitute for a qualified cross-border tax preparer's analysis of a specific account.

Source: Skybound 2026

Questions To Raise With A Qualified Adviser

For an expat in the US thinking through the retirement-account question, a short list of questions to raise with a qualified cross-border adviser and tax preparer includes:

• What is my US retirement architecture today, 401(k), Roth, IRA, HSA, and what am I missing?
• Given my current plan of where I will retire, does the Traditional-versus-Roth choice favor one over the other or a blend?
• What is the treaty-based US treatment of my home-country pension's growth, and have I documented it on Form8833 if relied upon?
• Is the home-country pension being captured on FBAR and Form 8938 correctly each year?
• Am I taking full advantage of the HSA, if I have a qualifying high-deductible plan?
• If I leave the US, what are my options for the 401(k), IRA, Roth and HSA, and how do they interact with the treaty of my next country of residence?
• Am I on a track that would bring me into the §877A expatriation rules on departure, and if so, what should I understand before that point?

The retirement-account question for an expat in the US is not a single decision. It is a set of decisions, made over years, in the presence of real uncertainty about where the reader will eventually live. The work is to build a structure that keeps the future options open, which usually means using the US accounts that are available on the same terms as they are to any US taxpayer, understanding the home-country pension's parallel treatment, and documenting the treaty positions being relied uponbefore the year in which they are tested.