Building Financial Security for the Future

Retirement planning is one of the most important parts of a financial journey — yet for US citizens and residents living abroad, it can also be one of the most complex.

From tax reporting under FATCA to restrictions on investment products and pension contributions, American expats face a unique set of challenges when preparing for retirement. The good news? With the right advice and structure, you can still build, protect, and enjoy your retirement wealth internationally.

At Blacktower Financial Management, we’ve been guiding expatriates for nearly 40 years. Our international team helps US expats manage their investments, pensions, and cross-border finances to ensure a secure and compliant financial future — wherever in the world they retire.

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1️⃣ Understanding US Retirement Planning as an Expat

The United States taxes its citizens and permanent residents on their worldwide income, regardless of where they live. This means that even if you’ve relocated overseas, you remain accountable to the IRS.

For many expats, this dual tax exposure — to both their country of residence and the US — creates challenges that require strategic planning to avoid double taxation and compliance risks.

In 2025, US expats need to consider three key areas:

1. Retirement account management (401(k)s, IRAs, Roth IRAs).
2. Foreign investment and savings strategies.
3. International tax and estate planning.

Understanding how these elements work together is crucial to preserving your retirement wealth.

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2️⃣ Common Retirement Accounts for US Citizens Abroad

Most American expatriates hold one or more of the following US retirement accounts:

✅ 401(k) Plans

The 401(k) is the most common employer-sponsored retirement account in the US.

• Contributions are made pre-tax, reducing taxable income.
• Investment growth is tax-deferred until withdrawals begin.
• Withdrawals before age 59½ are subject to tax and penalties.

If you’ve moved abroad but still have a 401(k), you can keep it active or roll it into an IRA — but managing it strategically is key.

✅ Traditional IRA (Individual Retirement Account)

The Traditional IRA allows individuals to save independently for retirement, with contributions often tax-deductible and growth tax-deferred.

However, US expats who no longer earn “US-sourced income” may be restricted from making new contributions while living abroad.

✅ Roth IRA

With a Roth IRA, contributions are made after tax — but withdrawals in retirement are tax-free, provided certain conditions are met.

This makes the Roth IRA particularly appealing for those expecting higher tax rates in the future. However, like Traditional IRAs, US expats must have US taxable earned income to contribute.

✅ SEP IRA and SIMPLE IRA

For self-employed expats or small business owners, these accounts can provide valuable tax-deferred savings options — but contributions must comply with US income rules and reporting requirements.

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3️⃣ FATCA, FBAR, and Global Tax Compliance

One of the biggest challenges for US expatriates is compliance under FATCA (Foreign Account Tax Compliance Act) and FBAR (Foreign Bank Account Reporting).

These laws require Americans to declare overseas bank accounts, investments, and financial holdings if they exceed certain thresholds.

• FBAR: Must be filed if your total foreign account balances exceed $10,000 at any time during the year.
• FATCA (Form 8938): Requires reporting of specified foreign assets if their total value exceeds certain thresholds ($200,000 for single filers living abroad).

Failure to comply can lead to substantial penalties. That’s why it’s essential for US expats to work with a financial adviser who understands both US and international regulations.

At Blacktower, we help clients stay compliant while ensuring their investments remain globally diversified and tax-efficient.

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4️⃣ Tax-Efficient Investing for US Expats

Investing as a US citizen abroad is complex. Many foreign investment funds and life insurance products are classified as PFICs (Passive Foreign Investment Companies) by the IRS — which can result in punitive taxation.

To avoid unnecessary tax exposure, expats should focus on US-compliant investment strategies that still allow global diversification.

Blacktower works with international partners to provide FATCA-compliant solutions, helping you:

• Access global investment markets safely.
• Avoid PFIC-related tax penalties.
• Manage currency exposure between USD, EUR, and GBP.
• Build portfolios aligned with your long-term retirement goals.

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5️⃣ Social Security and Expats

If you’ve worked and paid Social Security contributions in the US, you can usually claim your Social Security benefits even while living abroad.

• Payments can be received in over 100 countries.
• The amount you receive is based on your work history and contribution record.
• In some cases, payments may be subject to withholding tax or foreign exchange adjustments.

The US also has Totalization Agreements with over 30 countries — including the UK, Germany, France, and Spain — which help prevent double Social Security taxation and ensure that work credits earned abroad count toward US benefits.

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6️⃣ Combining US and International Retirement Planning

Many expatriates have retirement savings split between the US and their new country of residence.

To achieve the best results, both systems should be managed together — not in isolation.

Blacktower’s international advisers specialise in:

• Coordinating US-based accounts with foreign pension schemes.
• Evaluating options such as QROPS (for UK-linked clients) or EU life assurance plans.
• Structuring income and withdrawals to minimise global tax exposure.
• Protecting assets through cross-border estate and succession planning.

Whether you plan to return to the US or retire abroad permanently, we help you create a cohesive plan that ensures your wealth is optimised in both jurisdictions.

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7️⃣ Estate and Inheritance Planning for US Expats

Estate planning for US citizens abroad adds another layer of complexity.

The US imposes Estate Tax on the worldwide assets of US citizens, with a current exemption of $13.61 million (2024–2025). This threshold may decrease in 2026 if temporary provisions expire.

Additionally, foreign assets — such as property or investments in your country of residence — may also fall under local inheritance tax rules.

Our advisers work alongside international estate planners to help you:

• Protect assets through trusts, life assurance, or gifting strategies.
• Coordinate wills across jurisdictions.
• Avoid double taxation on inheritances and estate transfers.

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8️⃣ Currency and Investment Risk Management

Currency volatility can significantly affect the value of your US retirement savings when living abroad.

For instance, a strengthening dollar can reduce your local income value, while a weaker one can increase it. Blacktower’s investment managers help expats:

• Create multi-currency portfolios (USD, EUR, GBP).
• Hedge currency exposure.
• Align withdrawals with local living costs.

The goal: stable, sustainable retirement income — regardless of market fluctuations.

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9️⃣ The Benefits of Professional Financial Advice

Navigating the intersection of US tax law, foreign regulations, and cross-border finance is challenging — but you don’t have to face it alone.

At Blacktower Financial Management, our advisers provide:

• FATCA-compliant investment and pension solutions.
• Retirement planning strategies tailored to your expat lifestyle.
• Tax-efficient wealth management across multiple jurisdictions.
• Estate planning coordination with international partners.

We understand the unique needs of US expatriates — and we’re here to help you make confident financial decisions, wherever you are in the world.

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Plan Your International Retirement with Confidence

Living abroad should be a time to enjoy new opportunities — not to worry about complex financial regulations. With the right structure, you can protect your wealth, reduce tax exposure, and enjoy a rewarding retirement anywhere in the world.

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Speak to one of Blacktower’s international financial advisers to explore how our US retirement solutions can help you secure your financial future, wherever life takes you.