Required Minimum Distributions for US Expats Abroad

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Moving abroad does not exempt you from Required Minimum Distributions. Once your traditional IRA, 401(k), or other tax-deferred account triggers the RMD clock, you owe annual withdrawals regardless of which country you live in. The penalty for missing an RMD is a 25% excise tax on the amount not taken—reduced from 50% under the SECURE 2.0 Act, but still a significant cost. Understanding how RMDs interact with expat tax rules, withholding, and the Roth conversion strategy is worth doing well before the first deadline arrives.

This guide covers when RMDs start under current law, how to calculate them, what withholding options you have as a US expat, how to use Roth conversions to reduce or eliminate future RMDs, and what the inherited IRA rules mean for expat beneficiaries.

Which Accounts Require Distributions and When

RMDs apply to any tax-deferred retirement account: Traditional IRAs, SEP IRAs, SIMPLE IRAs, 401(k)s, 403(b)s, and most 457(b) plans. As of 2024, Roth 401(k) and Roth 403(b) accounts were removed from the RMD requirement—matching the long-standing Roth IRA exception. If your money is in a Roth IRA, you owe no RMDs during your lifetime, regardless of age or account balance.

The SECURE 2.0 Act restructured the starting age based on birth year:

Birth Year	RMD Starting Age	First RMD Deadline
1950 or earlier	72 (prior law, already in RMD)	Ongoing
1951–1959	73	April 1 of the year after turning 73
1960 or later	75 (beginning 2033)	April 1 of the year after turning 75

The April 1 deadline applies only to your first RMD. Every subsequent year's RMD is due by December 31. If you delay your first RMD to take advantage of the April 1 grace period, you will take two distributions in the same calendar year—both taxable as ordinary income—which can push you into a higher bracket. Many expats choose to take the first RMD in the year they turn the required age to avoid that double-distribution effect.

How to Calculate Your RMD

The IRS calculation is straightforward: divide the prior December 31 account balance by a life expectancy factor from the Uniform Lifetime Table in IRS Publication 590-B. The factor decreases each year as you age, which means the required percentage of your account you must withdraw increases gradually over time.

Aggregation rules vary by account type. For traditional IRAs (including SEP and SIMPLE IRAs), you can aggregate the RMD across all accounts and withdraw the total from any one or any combination. You do not need to take a proportional amount from each IRA. For employer plans (401k, 403b), you must take each account's RMD separately—you cannot use an IRA distribution to satisfy a 401k RMD, or vice versa.

If you have both a traditional IRA and an old 401(k), calculate the RMD for each separately and take them separately. This is a common source of errors for expats managing accounts at multiple custodians from abroad. See our 401k and IRA guide for expats for a full breakdown of how each account type works during the distribution phase.

Penalty for Missing an RMD—and How to Fix It

If you miss an RMD or take less than required, the IRS assesses a 25% excise tax on the shortfall (under SECURE 2.0; the old rate was 50%). If you discover the error and correct it within the correction window—generally by taking the missed distribution and filing an amended return—the excise tax drops to 10%. The correction window runs from the end of the tax year in which the RMD was due through two years after that.

The mechanism: file Form 5329 (Additional Taxes on Qualified Plans) with your annual Form 1040, report the shortfall amount, and apply the 25% (or 10% corrected) rate. Expats filing on extension have the full October 15 window to catch up. If you realize you missed an RMD after the standard correction window, the IRS has historically granted penalty relief for taxpayers who self-correct promptly and can demonstrate reasonable cause—document your circumstances and attach a statement to Form 5329.

Withholding: What Happens When You Live Abroad

This is the area most expats overlook. US retirement custodians (Fidelity, Vanguard, Charles Schwab, etc.) apply default federal withholding to distributions. For retirement account distributions that are not eligible rollover distributions—and RMDs are explicitly not eligible rollover distributions—the default withholding rate is 10%. You can change this rate, including to 0%, by filing a W-4R (Withholding Certificate for Nonperiodic Payments and Eligible Rollover Distributions) with your custodian.

The mandatory 20% federal withholding that applies to early 401(k) distributions does not apply to RMDs. RMDs cannot be rolled over, and it is specifically because they cannot be rolled over that they fall outside the 20% mandatory withholding regime.

Most US expats who are already making quarterly estimated tax payments (Form 1040-ES) elect 0% withholding on their RMDs to maintain better cash-flow control and avoid the IRS holding their money for several months before a refund. The tradeoff is that you must make accurate quarterly estimates. If you underestimate, the IRS will apply a penalty for underpayment of estimated taxes.

State Tax Considerations

If you maintain a state domicile—which many expats do to preserve voting rights, banking access, or driver's licenses—some states require withholding on retirement distributions or apply their own income tax. The state where you are domiciled can tax your worldwide income even while you live abroad. States with no income tax (Florida, Texas, Wyoming, South Dakota, Nevada, Alaska, Washington) avoid this problem entirely. See our guide to expat state tax domicile strategy for the full analysis.

How Tax Treaties Affect RMD Withholding

Dozens of US income tax treaties include specific provisions for pensions, IRAs, and retirement plan distributions. Under some treaties, retirement income is taxable only in the country of residence—which would mean the host country taxes it, not the US, at source. However, the saving clause in every US tax treaty preserves the US right to tax its own citizens regardless of residency, so US citizens cannot use a treaty to eliminate US income tax on their retirement distributions entirely.

Where treaties do help is in managing withholding at the source. If you are a US citizen living in a country with a favorable treaty provision for pension income, you may be able to claim a reduced withholding rate on the US side by completing Form W-8BEN (for non-US-person accounts) or by using a treaty-based position statement with your custodian. This is complex enough that most expats simply elect 0% withholding on RMDs, manage taxes quarterly via estimated payments, and then claim the Foreign Tax Credit for any income tax actually paid to the host country on those same distributions.

For a detailed look at how the saving clause interacts with treaty benefits for income types, see our US tax treaty saving clause guide.

Roth Conversions: The Long-Game Fix for RMDs

The most powerful strategy for reducing or eliminating future RMDs is converting traditional IRA and 401(k) balances to Roth accounts before your RMD clock starts. Roth IRA balances have no RMD requirement during the owner's lifetime, and as of 2024, Roth 401(k) and Roth 403(b) balances are also exempt. Once you convert a traditional balance to Roth, that amount leaves the RMD calculation permanently.

Conversions trigger ordinary income in the year of conversion. For US expats, the FEIE reduces earned income but does not exclude passive income or conversions—Roth conversion income is ordinary income fully subject to US tax. However, expats often find that the combination of foreign tax credits and treaty provisions puts them in a lower effective US tax bracket than they would face in the US, making earlier-year conversions more tax-efficient.

The math works best when: (1) you have several years before RMDs kick in, (2) your current taxable income is lower than it will be once RMDs force large mandatory withdrawals, and (3) you can absorb the conversion tax without running into alternative minimum tax or Medicare IRMAA surcharges (which are triggered at higher income levels). Our guide to Roth IRAs for US expats covers the FEIE interaction and the backdoor approach in detail.

Inherited IRAs and the 10-Year Rule for Expat Beneficiaries

If you inherit an IRA as a non-spouse beneficiary, the 10-year rule now applies for most heirs: you must fully deplete the inherited account within 10 years of the original owner's death. For expat beneficiaries, the same rules apply regardless of where you live.

The IRS clarified through regulations in 2024 that if the original owner had already started taking RMDs (i.e., was past their required beginning date), beneficiaries must also take annual distributions throughout the 10-year window—not just a lump sum at year 10. If the original owner had not yet started RMDs, the beneficiary has more flexibility: they can let the account grow for up to 10 years and then withdraw the full balance.

For inherited Roth IRAs, the same 10-year depletion rule applies to most non-spouse beneficiaries—but the distributions from a qualified Roth IRA are income-tax-free. This makes an inherited Roth a tax-efficient asset to hold for the full 10 years before withdrawing.

Surviving spouses have broader options: they can roll the inherited IRA into their own IRA and treat it as their own, delaying RMDs based on their own age, or they can remain as a beneficiary and stretch distributions over their own life expectancy under separate rules.

Logistics of Taking RMDs from Abroad

The mechanics of receiving a distribution while living outside the US require a little advance planning, but nothing exotic.

1. Keep your US custodian account active. Major custodians (Fidelity, Vanguard, Schwab) generally keep retirement accounts open for US citizens abroad. You may need to update your address to a US mailbox or service address to avoid account restrictions—see our guide on maintaining a US address abroad.
2. Choose your withholding setting. File W-4R with your custodian to elect 0% federal withholding if you handle taxes via quarterly estimated payments. Update this annually if your tax situation changes.
3. Direct deposit to your US checking account. Receive the RMD into a US checking account. Charles Schwab's Investor Checking, linked to Schwab brokerage, allows unlimited ATM withdrawals worldwide with no foreign transaction fees and full ATM fee rebates—letting you access RMD cash from any ATM abroad.
4. Include in Form 1040. RMDs are ordinary income reported on line 4b (IRA distributions) or line 5b (pension distributions) of your Form 1040. Apply the Foreign Tax Credit if you paid host-country income tax on the same income.
5. FBAR note. Your traditional IRA and 401(k) accounts at US custodians are US financial accounts, not foreign financial accounts. They do not trigger FBAR reporting. Only accounts held at foreign institutions require FBAR filing.

RMD Compliance Checklist for Expats

1. Confirm your required beginning date: age 73 if born 1951–1959, age 75 if born 1960 or later (effective 2033)
2. Pull December 31 balances for all traditional IRAs and employer plans from prior year statements
3. Calculate each account's RMD using the Uniform Lifetime Table in IRS Publication 590-B
4. For IRAs: aggregate the total and take from any combination; for 401(k)s: take each account's RMD separately
5. File W-4R with custodian to set your preferred withholding rate (0% if managing via estimated payments)
6. Take the distribution by December 31 (or April 1 for the first year only)
7. Include on Form 1040 as ordinary income; apply Foreign Tax Credit if also taxed by host country
8. File Form 5329 if you miss an RMD or take less than required—do not ignore; self-correct and document

Data note: RMD ages, penalty rates, and account rules reflect SECURE 2.0 provisions in effect as of 2026. The age-75 threshold for those born after 1959 becomes effective in 2033. IRS Publication 590-B and the Uniform Lifetime Table are updated periodically. Verify calculations with your custodian or tax advisor before filing.

Conclusion

Required Minimum Distributions are one of the few retirement obligations that follow you across borders without modification. The SECURE 2.0 changes are broadly favorable—a higher starting age and a lower penalty rate—but the fundamental structure remains the same. The most effective long-game strategy is to reduce your future RMD exposure through systematic Roth conversions during lower-income years abroad. For distributions you cannot avoid, the logistics are manageable: keep a US custodian account active, elect your withholding rate, and receive distributions through a US account you can access globally.

Disclaimer: This article is for informational purposes only and does not constitute legal, tax, or financial advice. RMD rules, SECURE 2.0 provisions, and IRS penalties can change. Consult a licensed CPA, IRS enrolled agent, or financial advisor for guidance specific to your retirement accounts and tax situation.

Sources Checked

• IRS: Retirement Plan and IRA Required Minimum Distributions FAQs (irs.gov)
• IRS: Retirement Topics — Required Minimum Distributions (irs.gov)
• IRS Publication 590-B: Distributions from Individual Retirement Arrangements
• Schneider Downs: RMD Rules for 2026 (schneiderdowns.com)
• Charles Schwab: Required Minimum Distributions — What You Should Know (schwab.com)