Opening Retirement Account From Overseas

**GrimJack** · 06-28-2013, 01:37 AM

IRAs are a tax 'displacement' vehicle tied to your income - if you don't pay US taxes on your income then you don't need to worry about taxes and therefore can't legally open a US IRA account.

Er, just a guess but if you don't have earned/taxable income you can't contribute to an IRA.

**workinabroad** · 06-30-2013, 10:56 PM

Makes perfect sense. I guess I'll keep the money in a savings.

By the way, the savings account here has a crazy better rate than U.S. banks. I'm not sure how long I want to be here, but if I leave do you think I could just let the interest keep building here? Or would that turn it into an illegal off-shore thing?

**GrimJack** · 07-01-2013, 01:31 AM

Originally posted by workinabroad View Post

Makes perfect sense. I guess I'll keep the money in a savings.

By the way, the savings account here has a crazy better rate than U.S. banks. I'm not sure how long I want to be here, but if I leave do you think I could just let the interest keep building here? Or would that turn it into an illegal off-shore thing?

The off-shoring procedure is for the specific purpose of hiding money from the government to avoid taxes. Having a bank account in a foreign is not a trigger. Back in the early 80s while I was visiting Australia - their interest rates were even better than our (which were 12% per year for an open CD - one that you could add to on whim; so I left a lot of money in a bank down then when I came back from vaczation. A couple years later I got it back but did everything wrong and only broke even. I asked for account to be closed and the money sent to me in the states - they sent it in Aussie dollars not US dollars and it cost me most of 'profits' to get the check converted to US dollars. - grumble, grumble.

**workinabroad** · 07-30-2013, 04:09 AM

Originally posted by GrimJack View Post

The off-shoring procedure is for the specific purpose of hiding money from the government to avoid taxes. Having a bank account in a foreign is not a trigger.

Eeee that sucks. I'll keep it over here then. Luckily I don't have to make big deposits each month and there don't seem to be any crazy fees. Thanks for the clarity!

**Wino** · 08-02-2013, 11:24 PM

If you are a US citizen, you still must file your tax returns. It does not matter the source of your income. There is a foreign earned income exclusion of about $95K if your income is from a foreign entity. You do not qualify for this if you are paid by a US company, US government (military or civil), or suchlike.

Therefore, you still have income and you can still open and fund a Roth IRA. I did so from over here, but that's because I maintain my domicile in the US. My residence is in Dubai.

IRS Link for FEIE

Opening Retirement Account From Overseas