Yes, a U.S. citizen living abroad can have both a traditional and/or Roth IRA. The restrictions only come with making contributions—so, if you had an existing IRA before you moved abroad, you don’t have to get rid of it or transfer assets, but you may not be able to add to it while you’re overseas.

Can you choose how your Roth IRA is invested?

You open a Roth IRA at a brokerage or bank. Then you invest the money. You can choose what you want to invest your money in, such as mutual funds, stocks, bonds, exchange-traded funds (ETFs) or bank savings products. You can also add money to a Roth by rolling over money from another retirement account.

Why is a Roth IRA attractive to investors?

With a Roth IRA, you invest money that’s already been taxed. When you withdraw it in retirement, you get the gains tax-free, assuming you follow the withdrawal requirements. Plus, income tax rates in general are extremely low right now, thanks to the 2017 tax law changes, making Roths even more attractive.

Does foreign income qualify for Roth IRA?

A single filer claiming the full $108,700 foreign earned income exclusion would have to have foreign wages over $108,700, and modified adjusted gross income not more than $140,000, to be eligible to contribute some money to a Roth IRA.

Can you invest in foreign stocks in a Roth IRA?

To successfully navigate the international waters, there some pitfalls to be aware of before you invest in foreign dividend stock through a Roth IRA. Foreign governments generally require U.S. brokerage firms to withhold taxes on dividends that U.S. citizens earn from stock in companies based in their countries.

Can a person work abroad and contribute to a Roth IRA?

For Roth IRA purposes, a taxpayer’s adjusted gross income is modified to add back any foreign earned income exclusion and/or foreign housing exclusion that he may have claimed. This creates a very narrow range of income possibilities for funding a Roth IRA if you live and work abroad.

What are the rules for contributing to a Roth IRA?

A single filer claiming the full $108,700 foreign earned income exclusion would have to have foreign wages over $108,700, and modified adjusted gross income not more than $140,000, to be eligible to contribute some money to a Roth IRA. Coordinating the Exclusion With Traditional IRAs

Can a person with a foreign AGI contribute to a Roth IRA?

No Roth IRA contribution is allowed if your MAGI is more than $137,000. For Roth IRA purposes, a taxpayer’s AGI is modified to add back any foreign earned income exclusion and/or foreign housing exclusion that he may have claimed. This creates a very narrow range of income possibilities for funding a Roth IRA if you live and work abroad.