Annuities for US Expats

Annuities are an option that many Americans living within the United States turn to as a way to guarantee income in retirement, but annuities are an option even if you live outside of the U.S. An annuity can help ensure you’ll always have a set stream of income without worrying about running out of money when you live abroad.

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  • Written By
    Christian Simmons

    Christian Simmons

    Financial Writer and Certified Educator in Personal Finance

    Christian Simmons is a financial writer who has worked professionally as a journalist since 2016. As an active member of the Association for Financial Counseling & Planning (AFCPE), Christian prides himself on his ability to break down complex financial topics in ways that readers can easily understand.

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    Stephen Kates, CFP®
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    Stephen Kates, CFP®

    Founder of Clocktower Financial Consulting

    Stephen Kates is a Certified Financial Planner™ and personal finance expert specializing in financial planning and education. Stephen has expertise in wealth management, personal finance, investing and retirement planning.

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  • Updated: August 7, 2023
  • 4 min read time
  • This page features 3 Cited Research Articles
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APA Simmons, C. (2023, August 7). Annuities for US Expats. Retrieved June 15, 2024, from

MLA Simmons, Christian. "Annuities for US Expats.", 7 Aug 2023,

Chicago Simmons, Christian. "Annuities for US Expats." Last modified August 7, 2023.

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Key Takeaways

  • Annuities can provide U.S. expats with an option to save money and guarantee income in retirement.
  • For those who have retired abroad, annuities offer a way to convert an existing nest egg into a set stream of payments that can last for life.
  • For younger Americans living abroad, annuities are one way to save for retirement in the place of a traditional plan like a 401(k).

Benefits of Annuities for US Expats

For the nearly 3 million Americans living abroad, annuities can provide financial security outside the U.S. Expats choose annuities for several reasons.

For those living outside the country at a young age for work or similar reasons, annuities can offer a tax-deferred path to retirement savings.

Expats working overseas may not have access to the same traditional and job-based retirement plans as those living in the country. For them, an annuity can fill the role of a 401(k) or similar retirement savings vehicle.

Meanwhile, for expats who have made the move after retirement, buying an annuity can be an effective way to convert a nest egg into a set of payments they won’t outlive. And an annuity’s tax-deferred growth can be especially beneficial for those subject to taxation in both the U.S. and their country of residence.

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Annuity Options Available to Expats

The type of annuity option that makes the most sense for you will depend on your personal circumstances.

For example, if you are younger and working overseas, a deferred annuity may make sense. This type of annuity builds up value over time. You can continuously pay into it, and its value can even be invested or tied to an index.

This allows the value of the annuity to grow over several years like it would in a savings account. It can then be converted into payments to support you later in life or in retirement.

You may be more suited to an immediate annuity if you already have money saved up and are looking for a way to guarantee income during your overseas retirement.

Immediate annuities pay out within a year of purchasing the product. Instead of building up value over time, you immediately put in a lump sum that is then converted into payments.

Case Study for Expats Interested in Annuities

Remember that everyone’s personal circumstances are different, and annuities are not one-size-fits-all. If you have other means of saving money or plans for your retirement savings, an annuity may not even be necessary to consider.

But say that you are living overseas at a younger age for a job. The company is based abroad, so you don’t have access to traditional retirement savings accounts that would be available to you in the U.S.

So, you opt to purchase a deferred annuity. You can pay into this annuity similarly to how you would pay into a retirement account over your career. And because annuities rarely have contribution limits, you can save even more than you would with a traditional retirement account like an IRA.

At retirement, you annuitize those payments and start receiving regular payments for the duration of your lifetime. These payments can keep you financially secure in retirement and ensure that you never have to worry about running out of money.

Remember that there are several types of annuities, so one may be better suited for you than another.

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Tax Implications of Annuities for US Expats

How taxation of an annuity works outside of the U.S. can be confusing, especially since annuities are often tax-deferred.

But, depending on your circumstances, the taxes on your annuities may work similarly or identically to how they would work if you lived stateside.

Other common retirement savings methods such as 401(k)s and IRAs are generally taxed the same by the U.S. even if you move to another country in retirement.

You should still expect to pay taxes on your annuity. Those taxes or fees you owe do not automatically disappear due to you living in a different country. Talk to a tax professional to identify the implications of your unique circumstances.

Read More: Reasons To Buy An Annuity

Editor Samantha Connell contributed to this article.

Please seek the advice of a qualified professional before making financial decisions.
Last Modified: August 7, 2023

3 Cited Research Articles writers adhere to strict sourcing guidelines and use only credible sources of information, including authoritative financial publications, academic organizations, peer-reviewed journals, highly regarded nonprofit organizations, government reports, court records and interviews with qualified experts. You can read more about our commitment to accuracy, fairness and transparency in our editorial guidelines.

  1. Van Dam, A. (2022, December 23). Why Have Millions of Americans Moved to These Countries Instead? Retrieved from
  2. Internal Revenue Service. (2022, May 16). The Taxation of Foreign Pension and Annuity Distributions. Retrieved from
  3. Creveling, A., & Creveling, P. (2015, March 2). Should U.S. Expats Buy Variable Annuities? Ask an Expert. Retrieved from