Retirement Planning for Accompanying Spouses – Working for a U.S. Employer

Accompanying spouses who have secured a job working for a U.S. employer anywhere around the world have more security when it comes to retirement planning. There is more continuity when you move from country to country, and you don’t have to learn new ways to save for retirement. It’s as if you never left the country when it comes to retirement planning.

So are there still things you need to think differently about concerning retirement savings when you work for a U.S. employer overseas? Here are a few tips:

Understand your eligibility for U.S.-based employer benefits

In the world of multi-national companies, sometimes continuing to hold your same job doesn’t mean all the work arrangements will stay the same. If you are officially transferred to a subsidiary of the American company in another country, you may lose some of the benefits you used to have, such as access to a U.S.-based pension, 401(k) plan, FSA, medical plan with Health Savings Account, and group life insurance. As you are negotiating the work arrangement, make sure you discuss and understand the terms so there are no surprises.

Some companies also have 401(k) plans that explicitly exclude “foreign employees”, or employees not located in the U.S. Your employer may be reluctant to adjust the plan for only one employee. However, the company may be willing to consider you based in your previous U.S. location, as long as you have a U.S. address and pay state taxes. If you choose to do this, you will be considered as working in the U.S. and may not be eligible for the Foreign Earned Income Exclusion, even if you live overseas physically full-time.

Understand your employment status

As you transition to teleworking, some employers may prefer to hire you as an independent contractor with a statutory employee status rather than full-time employee, to save some cost. This will also affect what type of benefits you are eligible for as pointed out in #1. As an independent contractor, you are generally considered self-employed, even though the company will pick up half of your social security and Medicare taxes.

While you may lose access to the company’s 401(k) plan, as a self-employed independent contractor you are now eligible to set up your own retirement plan, such as a solo 401(k) and SEP IRA. This may actually allow you to save more and invest without the employer’s 401(k) plan constraints. If you choose this route, refer to my previous post for self-employed accompanying spouses  to learn about setting up a retirement plan on your own.

Get online access to your employee benefit accounts

This seems obvious, but not every employer automatically allows you to complete all transactions online while you are overseas. Many people never actually signed up for access online. Other times we simply cannot remember our passwords, and the reset may take physical mail to accomplish. We all have experiences of giving up and forgetting about simple things like that becaus it’s too much effort to get it to work when we are overseas. Therefore make sure this is on your to-do list so you can make changes to your contributions and investments while you are overseas without too much hassle.

Remember Your IRA and Social Security

These two means of saving for retirement will most likely remain the same for those teleworking from an overseas location. While you may not have to make any changes to your current arrangement, remember that things such as contribution limits to Traditional IRAs and Roth IRAs may change from year to year, so keep yourself informed of the new rules at the beginning of the year.

So this wraps up the series of Retirement Planning for Trailing Spouses. If you missed any of the past articles that may apply to you, check them out over here . I hope this series has provided a structure for you to strategize your long-term savings in different scenarios.

Hui-ChenHui-chin Chen is a financial planner and co-owner of Pavlov Financial Planning. For the last ten years she has worked in the US, India, Taiwan, Mexico, and now in New Zealand, both independently and as a “trailing spouse.” She shares personal finance knowledge and financial planning topics for globally mobile professionals on her blog: Money Matters for Globetrotters, and welcomes any feedback or comments at

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