US citizens in France face retirement planning questions from two directions simultaneously. On the US side, existing retirement accounts (IRA, Roth IRA, 401(k)) continue to operate under US tax law, with specific rules that interact with the Foreign Earned Income Exclusion and French residency. On the French side, participation in French employer retirement savings plans and the French state pension system creates reporting and tax compliance obligations in both countries.
The US–France income tax treaty contains provisions governing pension and retirement income. These provisions affect the allocation of taxing rights over cross-border pension payments and, in some circumstances, the US tax treatment of contributions to French retirement plans. The specific analysis depends on the type of plan and the applicable treaty article.
This article addresses the most common retirement-related compliance issues for US citizens in France. Treaty analysis for specific pension situations warrants consultation with a qualified professional.
US Retirement Accounts While Living in France
IRA and 401(k): Continued Participation
US citizens in France may continue to hold and receive distributions from existing traditional IRA and 401(k) accounts. The accounts are maintained at US financial institutions and are not subject to FBAR or Form 8938 reporting. Distributions are includible in US gross income as ordinary income in the year received, regardless of residence.
Active 401(k) participation depends on the employer. US citizens employed by US companies with French operations or French subsidiaries may or may not have access to a US 401(k) plan. Those employed directly by French companies do not have access to US 401(k) plans and participate instead in French retirement plans.
Roth IRA: The FEIE Contribution Trap
The Roth IRA annual contribution limit is based on earned income not excluded under the Foreign Earned Income Exclusion.
| FEIE Status | Roth IRA Contribution Eligibility |
|---|---|
| Full exclusion of all foreign earned income | No earned income remaining; Roth contribution not permitted |
| Partial exclusion | Roth contributions permitted up to the non-excluded earned income, subject to the annual limit and income phase-out |
| No FEIE (FTC strategy) | Earned income fully available; Roth contributions subject only to the annual limit and income phase-out |
A US citizen in France who uses the Foreign Tax Credit strategy instead of the FEIE retains foreign earned income for IRA contribution purposes. A citizen who fully excludes all income under the FEIE has no earned income available and cannot make a Roth or traditional IRA contribution for that year.
This is one of the primary trade-offs between the FEIE and FTC strategies that is not visible in the immediate tax computation. A taxpayer who plans to build Roth IRA balances while living abroad should account for the FEIE’s effect on contribution eligibility.
Traditional IRA Deductibility Abroad
Traditional IRA contributions are deductible if the taxpayer is not covered by an employer retirement plan or, if covered, if income falls below the phase-out threshold. US citizens employed by French companies and participating in French employer plans are covered by an employer retirement plan for IRA deductibility purposes, which may phase out or eliminate the deduction depending on income.
French Retirement Plans: US Tax Treatment
French Employer Plans: PER, PERCO, PEE
French employers may offer employer-sponsored savings and retirement plans. The most common are:
| Plan | Description |
|---|---|
| PER collectif (Plan d’Épargne Retraite collectif) | Employer-sponsored retirement savings plan; successor to the PERCO |
| PERCO (Plan d’Épargne pour la Retraite Collectif) | Prior-generation employer retirement plan (closed to new contributions in most cases) |
| PEE (Plan d’Épargne Entreprise) | Employer savings plan (5-year lock-up, not strictly a retirement plan) |
US tax treatment: Contributions by the employer to these plans may be includible in the US employee’s gross income unless a treaty provision excludes them. Earnings within the plan are generally taxable to US shareholders annually under general principles, absent a treaty exemption. The plans are not treated as qualified retirement plans for US tax purposes without a specific treaty basis.
French State Pension (Retraite de Base, CNAV)
The French state pension is a benefit entitlement arising from years of contributions to the mandatory French social security system. It is not a financial account. Payments received from the CNAV (Caisse Nationale d’Assurance Vieillesse) are includible in US gross income as ordinary income in the year received.
FBAR: Not reportable. The retraite de base is a benefit entitlement, not a financial account at a foreign financial institution.
Form 8938: Generally excluded from the definition of specified foreign financial assets.
Retraite Complémentaire (AGIRC-ARRCO)
The supplementary pension through AGIRC-ARRCO is, like the state pension, a benefit entitlement accrued through mandatory contributions. Payments are includible in US gross income. The US–France treaty provisions applicable to social security and pensions govern the allocation of taxing rights.
Reporting Obligations
FBAR
| Account Type | FBAR Reportable |
|---|---|
| US IRA at US institution | No |
| US 401(k) at US custodian | No |
| French employer savings plan (PER collectif, PERCO) | Generally yes |
| French state pension (CNAV retraite de base) | No (benefit entitlement, not a financial account) |
| Retraite complémentaire (AGIRC-ARRCO) | No (benefit entitlement) |
French employer plans that hold assets in financial accounts at French financial institutions are reportable on FBAR when the aggregate value of all foreign financial accounts exceeds $10,000 at any point during the year.
Form 8938
| Account Type | Form 8938 Threshold |
|---|---|
| French employer plan (PER, PERCO) | Counts toward threshold; may be excluded from detailed reporting under treaty provisions |
| Foreign state pension | Generally excluded from specified foreign financial assets |
| French individual savings (PEA, assurance-vie) | Counts toward threshold |
US citizens in France living abroad apply the higher thresholds: $200,000 at year-end or $300,000 at any point during the year for single filers. If total specified foreign financial assets exceed the applicable threshold, Form 8938 is filed as an attachment to Form 1040.
Technical References
IRA contribution limitation — FEIE interaction: IRC §219(f)(1) defines compensation for IRA purposes as earned income within the meaning of IRC §401(c)(2). IRC §219(f)(2) reduces the earned income available for IRA contribution purposes by any amount excluded under IRC §911 (the FEIE). A US citizen who excludes all foreign earned income under Form 2555 has zero earned income available for IRA or Roth IRA contributions.
Roth IRA income phase-out: IRC §408A(c)(3) establishes the modified AGI phase-out for Roth IRA contributions. The phase-out range is adjusted for inflation annually. For 2024, the phase-out begins at $146,000 for single filers and $230,000 for married filing jointly.
FBAR — employer plan reporting: Under 31 C.F.R. §1010.350, FBAR covers any financial account at a foreign financial institution. Employer-sponsored retirement savings accounts held at French custodians (such as asset management companies managing PERCO or PER collectif assets) are financial accounts. Whether a specific plan qualifies depends on whether it meets the definition of a “financial account” under the BSA implementing regulations.
Form 8938 — treaty exclusion: IRC §6038D(d)(2) and accompanying regulations permit exclusion from Form 8938 detailed reporting of certain foreign pension and deferred compensation plans covered by a tax treaty. The exclusion from reporting does not eliminate the obligation to count the plan’s value toward the 8938 threshold.
US–France Treaty — pension provisions: The US–France income tax convention addresses pensions, annuities, and social security in Articles 17 and 18. The treaty contains provisions governing the allocation of taxing rights over pension distributions and, in limited circumstances, the deductibility of contributions. The savings clause in Article 29(3) limits the availability of treaty benefits for US citizens in France; specific pension provisions may or may not survive the savings clause depending on the plan type. Verification of applicable treaty articles is required for any specific plan.
Frequently Asked Questions
Can I still contribute to a Roth IRA while living in France?
Yes, but only if you have earned income that has not been excluded under the Foreign Earned Income Exclusion. The Roth IRA contribution requires earned income within the meaning of IRC §219(f)(2), which reduces available earned income by the FEIE exclusion amount. A US citizen who fully excludes all foreign earned income has no remaining earned income for Roth IRA purposes. A US citizen who uses the Foreign Tax Credit instead retains earned income and may contribute up to the annual limit, subject to the income phase-out.
Do I need to report my French employer retirement plan on my US tax return?
Yes. French employer retirement savings plans (PER collectif, PERCO) generally require reporting on FBAR and potentially Form 8938. Employer contributions to these plans may be includible in US gross income unless a treaty provision applies. Earnings within the plan are generally taxable annually. The specific US tax treatment depends on whether the plan qualifies under applicable provisions of the US–France treaty.
Is the French state pension (retraite de base) reportable on FBAR?
No. The French state pension is a benefit entitlement, not a financial account at a foreign financial institution. FBAR applies to financial accounts only. The retraite de base does not meet this definition. Pension payments received are includible in US gross income as ordinary income in the year received.
Are French employer savings plans (PERCO, PER collectif) reportable on FBAR?
Generally yes. These plans hold assets in financial accounts at French custodians and are reportable as foreign financial accounts when the aggregate value of all foreign accounts exceeds $10,000 at any point during the year. Form 8938 reporting may also apply depending on the plan value and whether a treaty exclusion is available.
How are 401(k) distributions taxed when I live in France?
401(k) distributions are includible in US gross income as ordinary income in the year received, regardless of the recipient’s country of residence. As a US citizen in France, the distribution is reported on Form 1040. French income tax may also apply. The US–France treaty provisions governing pension income may affect the allocation of taxing rights between the two countries.
Can I deduct contributions to a French retirement plan on my US tax return?
No, not without a treaty basis. Contributions to French retirement plans are not deductible on the US federal income tax return under the Internal Revenue Code. The US–France treaty may permit limited analogous treatment for specific plans, but this requires analysis of the specific plan structure against the applicable treaty provisions. In the absence of treaty coverage, contributions are made from after-tax income for US purposes.
Do I report my US IRA or 401(k) on FBAR while living in France?
No. FBAR covers foreign financial accounts maintained at foreign financial institutions. A traditional IRA, Roth IRA, or 401(k) held at a US custodian is a domestic account and is not reportable on FBAR or Form 8938, regardless of the account holder’s country of residence.