GC holder living abroad and investing in the US

[Filipok]

I have been a green card holder for about a year, but currently live abroad and have a reentry permit. I just came to the US for a few days three times - first to "activate" the green card, then to get reentry permit. I have a US checking account and a credit card.

Am I allowed to invest using Roth IRA or any other tax free investment schemes in the US? Can i start doing it while i stay abroad?

 

[Jackolantern]

Yes, as a permanent resident you can invest in a Roth IRA or any other US-based retirement plan, provided you meet the income limits and other eligibility criteria (e.g. for the Roth IRA your income must be less than $120K if you're single). But if you're spending most of the year outside the US, be aware that the country where you're staying may consider the interest, dividends, and other earnings within IRA's and other such accounts to be taxable.

 

[Filipok]

Jackolantern

Thanks for your answer. What happens to my retirement plan in case i lose my green card, for example, because I decide not to live in the US? Will i at least be able to withdraw the money tax free in this case?

 

[TheRealCanadian]

What happens to my retirement plan in case i lose my green card, for example, because I decide not to live in the US? Will i at least be able to withdraw the money tax free in this case?

From a Roth? Assuming the tax laws do not change, yes. You may be taxed by your country of residence, depending on their tax laws.

 

[Jackolantern]

You won't be able to withdraw the money tax free from a tax-sheltered retirement account before age 59.5 years (with the possible exception of a Roth IRA if it has zero or negative net gain), but after surrendering your green card you can leave the money in the account to grow tax free (and buy and sell stocks/bonds/funds within the account) until you withdraw in retirement. And of course, by "tax free" I'm referring only to US taxation, not whatever the other country might impose.