What is an IRA?
An IRA, or Individual Retirement Account, is a personal retirement savings plan that you can establish with a financial institution. As a US citizen, you’re eligible to contribute earned income into an IRA, which helps you build a secure retirement fund. Keep in mind that there are specific rules and penalties for withdrawing funds before reaching the age of 59 ½.
Why Consider an IRA?
For Americans living in France, an IRA can be a valuable tool for generating extra retirement income. Even while residing abroad, it’s possible to open new IRA or Roth IRA accounts. At Harrison Brook, we can help you create a tax-efficient strategy, allowing you to consolidate older retirement accounts, like 401(k)s, into a single IRA. Additionally, converting a traditional IRA into a Roth IRA over time may help lower your annual tax burden and generate tax-free income in retirement.
Advantages of an IRA
There are two main types of IRAs: Traditional and Roth. With a traditional IRA, contributions may reduce your taxable income for the year, but withdrawals will be taxed later. On the other hand, Roth IRAs involve contributions made with after-tax dollars, so your taxable income remains unchanged upfront, but withdrawals are completely tax-free. Both options offer the benefit of tax-deferred growth on your retirement savings.
Why Harrison Brook
At Harrison Brook, we have extensive experience providing financial guidance tailored to the unique needs of American expats based in France. With our deep understanding of both US and European markets, we’re equipped to offer holistic financial advice to ensure your investments are effectively managed.
How Do You Get an IRA?
An IRA rollover allows you to transfer funds directly from one US custodian to another, avoiding any tax consequences since the money doesn’t pass through your hands. We can assist you in consolidating multiple retirement plans, like 401(k), IRA, or 403(b) accounts, into a single IRA. You also have the option of rolling over to a Roth IRA, providing future flexibility and potential tax advantages.
