RetireJapan

Hi,
I’m a US citizen who has a couple IRA’s in USA but my old broker put my account on hold because I live in Japan and they don’t serve people in Japan. I was wondering if people could please give advice. I looked through the message board but couldn’t find a similar situation.

Thanks in Advance

If you're using the FEIE (foreign earned income exemption) you probably won't be eligible to contribute to an IRA, since you need to do that with after-tax income, and the FEIE brings most everyone down to zero. At that point, if you do contribute, I think there's a penalty, significant enough that it doesn't make investment sense.

If you are instead using the FTC (foreign tax credit), I think you can then contribute, but I am not sure of the details (thresholds, amounts, etc).

The other factor that may be involved with the broker is that expats are barred from buying mutual funds (some old rule from 1948 or so). ETFs are okay. You can maintain/hold an account/IRA that has mutual funds that you bought before you left, but you cannot (should not be able to) buy more of the same.

Separately, there are a couple US brokerages that do allow/serve expats**, but there are quite a few more that don't. Some will even close your account on you--ask you to transfer the funds somewhere else within x-number of days.

**And I think there might be only 1-2 that will allow a US expat to set up an account when they are already outside the US--Interactive Brokers (can search for them here), and TD ameritrade. (I don't have experience doing this, but am just passing on what I have read.)

Captain, Thanks for the response. I wonder about 1948 rule... When I talked to IB Japan they said they couldn't take my IRA. I hope I can get more feedback from others like me. I still have a house in the US and family that still live there.

Charles Schwab will work with you and they are virtually almost free. There are ways to incur a fee, but you really have to try.

Bushidobryan,
Do you have a Schwab account? What do you mean fees? Thanks

IWantToBreakFree wrote: ↑Thu Jul 09, 2020 6:46 am Bushidobryan,
Do you have a Schwab account? What do you mean fees? Thanks

bushidobryan is no longer on the board due to our new 'noncommercial rule'. Apologies for the inconvenience.