What Happens to Your US 401(k) and IRA When You Move to France

Updated: May 11, 2026

Your US retirement accounts do not disappear when you move to France, but their tax treatment changes in ways that catch most Americans off guard. A 401(k) distribution that would have been straightforward income in the US becomes a dual-country reporting event subject to both US and French tax obligations, a credit mechanism that prevents double taxation in theory but not always in practice, and a set of French reporting requirements that most Americans have never heard of. Whether you are planning a move, recently arrived, or several years into French residency with distributions on the horizon, understanding how France treats US retirement accounts is essential before you make any decisions about rollovers, contributions, distributions, or timing. This article is for informational purposes only and does not constitute tax or legal advice. Tax rules are complex and change frequently: consult a qualified cross-border tax professional before making any filing or planning decisions.

What You Are Not Required to Report: The FBAR Clarification

The first question most Americans ask is whether their 401(k) and IRA must be reported on FBAR. The answer creates significant confusion because it is often stated incorrectly online.

FBAR (FinCEN Report 114) requires US persons to report foreign financial accounts: accounts held at financial institutions outside the United States. A 401(k) plan administered by a US plan custodian and an IRA held at a US broker are domestic US accounts. They are not foreign accounts. They are not reportable on FBAR.

The confusion arises because Americans living abroad are simultaneously subject to French rules that treat the same accounts very differently. From France's perspective, your US 401(k) and IRA are foreign accounts, held outside France, and subject to mandatory declaration on your French tax return. These two reporting frameworks operate independently, and satisfying one does not satisfy the other.

The US-side FBAR clarification stands: standard 401(k) plans and IRAs held at US custodians do not belong on FinCEN 114. Where Americans should maintain vigilance is on Form 8938 (FATCA Statement of Specified Foreign Financial Assets), which reports foreign financial assets for US persons above certain thresholds. A US IRA is not a specified foreign financial asset and is generally not reportable on Form 8938 either. The foreign reporting obligation for US retirement accounts runs one direction: France requires you to declare them; the US does not. For the full US-side FBAR and FATCA framework, see our guide to US taxes when you live in France.

What France Does Require: Form 3916 and the Compte à l'Étranger Obligation

French tax residents are required to declare all accounts held at financial institutions outside France on Form 3916 (Déclaration par un résident d'un compte ouvert hors de France), filed alongside the annual French income tax return. From France's perspective, your US 401(k) plan account, your traditional IRA, your Roth IRA, and any other US-held financial account are "foreign accounts" that must be declared each year, even if no distributions were taken during the year.

Each account generates a separate Form 3916 (or a separate entry on the form, depending on the year's version). The form requires the institution name, country, account number, and account type. It is a disclosure form, not a taxation form. Failing to file it for each account can result in penalties under French tax law, which are assessed per undisclosed account. The penalties are not trivial.

The most common omission among Americans in France is not disclosing the 401(k) because they believe it is "protected" by the US-France treaty from French taxation, and therefore not required to be reported. The French reporting requirement for the account existence is distinct from the question of whether distributions are taxed. The account must be declared on Form 3916 regardless of its tax treatment. For how Form 3916 integrates into the full French tax return filing, see our French income tax return guide.

How France Taxes 401(k) and Traditional IRA Distributions

The US-France tax treaty (specifically Article 18 and the associated protocols) addresses how pension and retirement plan distributions are taxed when the recipient is a French resident. The practical outcome for American 401(k) and traditional IRA distributions is a dual-tax system with a credit mechanism, not a simple exemption.

The United States retains the right to tax its citizens on income from US retirement accounts regardless of French residency, under the saving clause of the treaty (Article 29). France also taxes retirement distributions received by French residents, treating them as pension income under its domestic law. Both countries apply tax to the same distribution, and the treaty prevents true double taxation through a credit mechanism: the French tax on the distribution generates a crédit d'impôt on the French return (reducing the French tax due by an amount tied to the applicable French rate), and on the US side, the foreign tax credit (Form 1116) reduces US tax by the French tax already paid.

In practice, this means you pay tax in both countries, but not the sum of both. The effective tax rate on retirement distributions tends to approximate the higher of the two applicable rates, with credit relief reducing the lower tax to near zero. For Americans in the middle French income tax brackets (30% marginal rate), whose US marginal rate on the same distribution is lower, the French rate can govern. For high earners in the US, the reverse may apply.

The mechanism on the French return is as follows: the distribution is entered on Form 2047 as foreign pension income. The treaty treatment is reflected by placing it in the taux effectif section, meaning the amount is included in the calculation of the tax rate but receives a credit equal to the French tax that would otherwise apply. The result is that the distribution inflates your taxable base and lifts your effective rate on other French-source income, even if no actual French tax is paid directly on the distribution itself.

In our experience, this interaction between US retirement distributions and the French rate bracket is the effect that surprises Americans most. A retiree with modest French-source income who begins taking 401(k) distributions can find that the distributions push their French tax rate on all other income higher, even when the distributions themselves do not produce a direct French tax bill. Modeling this before beginning distributions, rather than after, significantly changes the planning picture.

The Roth IRA: The Unsettled Question

The Roth IRA creates the most significant cross-border tax uncertainty for Americans in France, and it deserves its own frank discussion.

In the United States, qualified Roth IRA distributions are entirely income-tax-free. The contributions were made from after-tax dollars, and growth and qualified withdrawals are tax-exempt. This is a US-specific tax vehicle with no direct French equivalent.

The 2009 Protocol to the US-France treaty amended Article 18 to include provisions covering "pension schemes" and "other retirement arrangements," and there has been significant debate among cross-border tax professionals about whether these provisions cover Roth IRAs and whether France is obligated to respect the US tax exemption on qualified Roth distributions.

The French tax administration's official position on Roth IRAs has not been consistent or definitively settled through formal binding guidance applicable to all cases. Some cross-border advisors argue that the 2009 Protocol's language brings Roth IRAs within the treaty's scope and that France should not tax qualified Roth distributions. Others, including some who have reviewed specific communications from French tax authorities, advise clients to declare Roth distributions on the French return and apply for treaty relief on a case-by-case basis.

The honest position is this: the Roth IRA is the one US retirement account whose French treatment is genuinely uncertain enough to make professional guidance not merely advisable but necessary. Filing decisions made without an advisor who has current experience with French treatment of Roth accounts carry real risk in either direction. For current US-France treaty documentation, the IRS publishes the treaty text and protocols.

Can You Still Contribute to an IRA While Living in France?

Yes, with important conditions that depend on how you are filing your US taxes.

The IRA contribution rules require that contributions not exceed your "compensation" for the year: wages, salaries, commissions, or self-employment income. Investment income, rental income, and pension distributions do not count as compensation. This is a US rule and does not change based on French residency.

The critical issue is the Foreign Earned Income Exclusion (FEIE, claimed on Form 2555). If you exclude foreign earned income using the FEIE, the excluded amount does not count as compensation for IRA contribution purposes. If you exclude all of your earned income via the FEIE, you effectively reduce your IRA-eligible compensation to zero and cannot make a deductible IRA contribution for that year. Many Americans in France who use the FEIE to reduce their US tax bill are inadvertently ineligible to make IRA contributions.

The alternative approach is to use the foreign tax credit (Form 1116) rather than the FEIE. Under this method, your earned income is not excluded: it remains in your US taxable base, and you receive a credit for French taxes paid. Your income qualifies as compensation for IRA contribution purposes, and you can contribute.

The choice between FEIE and foreign tax credit has implications beyond IRA contributions and should be evaluated in the context of your full income picture, not the IRA question alone. For Americans employed by French companies whose income is subject to French social contributions, the foreign tax credit approach often produces better overall results than the FEIE. Discuss this with a cross-border tax advisor before changing your filing method.

For 2026, the IRA contribution limit is $7,000 per year, or $8,000 if you are 50 or older. Roth IRA contributions have income phase-out thresholds based on modified adjusted gross income.

401(k) Plans: Leaving, Rolling Over, or Cashing Out

If you are leaving US employment to move to France, your 401(k) plan requires a decision. Three options are available.

Leaving the 401(k) in the plan is administratively simple and defers the decision. Most 401(k) plans allow terminated employees to remain as account holders indefinitely, provided the balance is above the plan's minimum (typically $5,000). The account continues to grow tax-deferred. You do not need to report the account to France until distributions begin, though you do need to file Form 3916 each year. The main consideration is whether the plan's investment options and administrative accessibility from France are adequate. Some plan administrators impose restrictions on participants with non-US addresses.

Rolling the 401(k) into a traditional IRA is the most common choice for Americans leaving US employment. A direct rollover (trustee-to-trustee) is tax-free and consolidates retirement savings into an IRA, which typically offers broader investment options and better administrator flexibility for non-US residents. The rollover itself does not trigger French reporting beyond the Form 3916 update for the new IRA account. Many major US brokerages, including those covered in our guide on US brokerage accounts and French residency, permit IRA holders to maintain accounts as non-US residents.

Taking a distribution is the most costly option in most cases. A 401(k) distribution before age 59.5 triggers the US 10% early withdrawal penalty plus ordinary income tax. France also treats the distribution as taxable pension income, applying the credit mechanism described above. The combined effective tax cost of an early distribution can easily exceed 35 to 50% of the amount withdrawn, depending on bracket. Even after age 59.5, a lump-sum distribution significantly increases taxable income in the year taken and should be modeled before execution.

Required Minimum Distributions for Americans in France

The SECURE 2.0 Act, signed in December 2022, changed the RMD starting age to 73 for those born between 1951 and 1959, and to 75 for those born in 1960 or later. Americans living in France must still take RMDs from traditional 401(k) plans and traditional IRAs according to US rules. French residency does not affect the US RMD obligation.

RMD amounts are calculated based on the account balance at December 31 of the prior year divided by the applicable IRS life expectancy factor. The IRS publishes the relevant tables in Publication 590-B.

For French tax purposes, RMD distributions are pension income and are included on Form 2047 and Form 2042 with treaty treatment as described above. The year in which required minimum distributions begin can represent a significant shift in French taxable income if the amounts are substantial, particularly if the distributions lift the household into a higher French marginal bracket and increase the effective tax rate on other income.

Planning the timing of distributions, including whether to take modest voluntary distributions before the RMD starting age to spread the income and flatten the bracket impact, is a decision that benefits significantly from cross-border tax modeling. This is not something to decide based on US-only retirement planning logic, because the French tax dynamic adds a dimension that changes the optimal answer.

French Social Contributions on US Retirement Income: A Layer Often Missed

The prélèvements sociaux (French social contributions, including CSG, CRDS, and related levies) can apply to certain categories of investment and pension income received by French residents at a combined rate of approximately 17.2%. This is a separate charge from income tax and is assessed on top of it.

The application of prélèvements sociaux to US-source retirement income is an area of ongoing professional debate and has been subject to litigation and administrative positions that have evolved over time. The treaty does not definitively address prélèvements sociaux in the same way it addresses income tax. Some cross-border advisors argue that the treaty's pension provisions limit French social contributions on US pension income; others view this as an open question pending further guidance.

The practical takeaway is that Americans who begin taking distributions from US retirement accounts in France should not assume the total French tax charge is limited to income tax at the applicable marginal rate. Social contributions may add to the effective rate, and this needs to be factored into distribution planning.

For how retirement income intersects with the broader French residency picture including tax residency, visa planning, and timeline, see our comprehensive guide to retiring in France as an American.

Common Mistakes to Avoid

Failing to file Form 3916 for each US retirement account is the most consistent compliance error among Americans in France. The belief that treaty protection on distributions means the accounts do not need to be declared is incorrect. Declaration and taxation are separate obligations. What we see most often is Americans who correctly file their French income tax return and correctly declare their retirement distributions but omit Form 3916 for the accounts themselves, creating a technical non-compliance exposure.

Making IRA contributions while using the full FEIE exclusion results in excess contributions that are penalized at 6% per year until corrected. Americans who continue contributing to IRAs in France without verifying their compensation base under their filing method create a problem that is expensive to unwind.

Taking a 401(k) distribution without modeling both the US and French tax consequences in the same year produces tax bills that are larger than expected. This is particularly common for Americans who take a lump-sum distribution in their first year in France, before they have a clear picture of their French tax liability.

Treating Roth IRA distributions as automatically exempt from French tax without professional confirmation creates exposure if France's position is that the treaty does not apply in your specific situation. Confirm the treatment with a cross-border advisor before taking Roth distributions as a French resident.

Conflating the French Form 3916 obligation with the US FBAR obligation creates opposite errors: Americans who believe Form 3916 satisfies their US reporting (it does not), and Americans who believe FBAR covers their French obligation (it does not apply to US accounts in any case).

Practical Checklist

Immediately upon establishing French tax residency: identify every US retirement account you hold, note the custodian name, account type, and account number, and prepare to include a Form 3916 for each one with your first French tax return filing.

Before your first French tax return: confirm with a cross-border tax advisor how your specific income and filing method (FEIE vs. foreign tax credit) affects your IRA contribution eligibility for the relevant tax year.

If you have a 401(k) from a prior US employer: decide whether to leave it in the plan, roll to a traditional IRA, or take a distribution, modeling the cost of each option with both US and French tax treatment in view.

Before beginning distributions: model the taux effectif impact on your French rate bracket for the year in question. Timing distributions across multiple years to flatten the bracket impact can produce meaningfully better results than taking a lump sum.

For Roth IRA holders: do not take qualified distributions from a Roth IRA as a French resident without confirming the current French treatment with a cross-border advisor.

For RMD-age Americans: begin planning the distribution timing strategy at least two years before the RMD starting age applies, not in the year it begins.

When to Get Help

US retirement accounts in France are one of the clearest cases where cross-border tax professional support pays for itself. The dual reporting framework, the treaty mechanics, the Roth uncertainty, and the prélèvements sociaux layer produce a planning picture that is genuinely different from what either a US-only CPA or a French-only accountant can navigate alone.

Our First-Year Tax Orientation provides a structured review of your income profile, including US retirement accounts, to clarify which French and US obligations apply in your first years of French residency and where the decisions with the highest tax cost are concentrated. This is the starting point before you make any irreversible decisions about rollovers, distributions, or contribution strategies as a French resident.

FAQ

Do I need to report my 401(k) or IRA on FBAR when I live in France?

No. FBAR (FinCEN Report 114) covers foreign financial accounts: accounts held at financial institutions outside the United States. A 401(k) plan and an IRA held at US custodians are US accounts, not foreign accounts, and are not reportable on FBAR. The reporting obligation runs the other way: France requires French tax residents to declare all accounts held outside France on Form 3916, and your US retirement accounts are "foreign" from France's perspective and must be declared. These are two separate frameworks with no overlap for US-based retirement accounts. Current FBAR guidance is available on FinCEN's official page.

Can I keep contributing to my Roth IRA while living in France?

You can contribute to a Roth IRA while living in France if you have sufficient earned income that qualifies as compensation for IRA purposes and your modified adjusted gross income falls within the Roth IRA income limits. The key constraint, as with traditional IRA contributions, is the FEIE interaction: if you exclude your earned income using Form 2555, the excluded income does not count as compensation for Roth IRA contribution purposes. If you are using the foreign tax credit approach rather than the FEIE, your earned income is not excluded and can support Roth contributions. Note that even if you can contribute to a Roth, the ongoing uncertainty about how France taxes Roth distributions is a factor in deciding whether accumulating further Roth assets as a French resident is optimal for your situation.

How does France tax my 401(k) withdrawals?

France treats 401(k) distributions as pension income under its domestic tax law. The treaty mechanism means the distribution enters your French taxable base and influences your tax rate (taux effectif), but a credit reduces the actual French income tax that would otherwise be directly due on the distribution, because the US also taxes it. The net effect is that your effective French tax rate on other income (French wages, French rental income) may increase because the US distribution inflates the rate bracket. The US also taxes the distribution, with the foreign tax credit reducing US tax by French taxes paid. The combined effective rate tends to approximate the higher of the two applicable rates, not the sum. Prélèvements sociaux may add an additional layer. For the mechanics of declaring this on Form 2047 and Form 2042, see our French income tax return guide.

What happens to my 401(k) at retirement age if I'm living in France?

Your 401(k) remains subject to US rules for distributions: required minimum distributions begin at age 73 (or 75 for those born 1960 or later under SECURE 2.0), and distributions are ordinary income for US tax purposes. French residency does not change the US rules or exempt you from RMDs. On the French side, the distributions are pension income that enters your French tax base. The longer-term planning question, which is worth modeling well before retirement age, is how the scale and timing of distributions interacts with your French income tax bracket in each year. Taking modest voluntary distributions in your early years of French residency to spread the income over time, rather than waiting for larger mandatory distributions at RMD age, sometimes produces better combined US-French tax results. This is the kind of multi-year modeling that benefits most from a cross-border tax advisor familiar with both systems.

Should I roll over my 401(k) to an IRA before moving to France?

A direct rollover from a 401(k) to a traditional IRA is tax-free in the US and does not trigger immediate taxation in France. Whether to do it, and when, depends on several factors: your plan's investment options and administrative flexibility for foreign residents, the IRA custodian's policy on non-US resident account holders, and your specific tax situation. Most cross-border advisors favor having US retirement savings in an IRA rather than an employer 401(k) for Americans in France, primarily because IRAs offer more control over investment choices and more flexibility in managing the timing and amount of distributions. However, rolling over immediately before a move without modeling the tax consequences in both countries is not advisable. Discuss the timing and method of any rollover with a cross-border advisor before executing it.

Conclusion

Your US retirement accounts follow you to France in terms of both obligation and complexity. They must be declared annually on Form 3916 regardless of whether you take distributions. Distributions trigger a dual-country tax event that operates through a credit mechanism, not a clean exemption. The Roth IRA's treatment remains professionally contested. IRA contributions require careful attention to your filing method and earned income position. RMDs continue on US rules and must be planned for in the context of French bracket dynamics.

None of this means US retirement accounts become a liability in France. It means they require planning. Getting that planning right before your first distribution year, rather than after, is the clearest way to avoid surprises.

Our First-Year Tax Orientation gives you a structured review of your retirement account picture alongside your broader income profile, so the decisions about rollovers, contributions, and timing are made with both systems fully in view.