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 may be treated as covered by an employer retirement plan for IRA deductibility purposes, which would phase out or eliminate the deduction depending on income. Whether a French plan constitutes an employer plan under IRC §219 for active-participant purposes is not expressly addressed by IRS guidance and depends on the plan’s structure. A US citizen in this situation should seek specialist advice before assuming deductibility.
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. The US tax treatment of earnings within these plans depends on how the plan is classified under US law: as a foreign trust, a nonexempt employees’ trust, a deferred compensation arrangement, or a treaty-covered pension arrangement. The plans are not treated as qualified retirement plans for US tax purposes without a specific treaty basis.
Without a specific treaty basis or IRS ruling, annual inclusion of inside build-up is a material risk. Classification requires professional analysis. Request an introduction to a specialist.
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. Under Article 18(1) of the US–France treaty, payments from the CNAV are taxable only in France, regardless of whether the recipient is resident in France or the US. For US citizens resident in France, this treatment is explicitly preserved from the saving clause by Article 29(3)(a) and confirmed by the 2009 Protocol. CNAV payments are not includible in US gross income.
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. Under Article 18(1), AGIRC-ARRCO payments are taxable only in France. For US citizens resident in France, this treatment is preserved from the saving clause by Article 29(3)(a). These payments are not includible in US gross income.
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 living abroad apply the higher thresholds: $200,000 at year-end or $300,000 at any point during the year for single filers (2025 figures). 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 and 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 2025, the phase-out begins at $150,000 for single filers and $236,000 for married filing jointly. Verify against IRS Publication 590-A for the applicable tax year.
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 Article 18. Article 19 governs active government service remuneration (salaries and wages); government pensions were moved into Article 18 by the 2004 Protocol. Article 17 covers artistes and sportsmen and is unrelated to pension income. 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.