Does FBAR Include Retirement Accounts? + FAQs

Yes – foreign retirement accounts do count for FBAR reporting. If you’re a U.S. person with retirement savings or pension funds in foreign accounts, they likely fall under FBAR requirements.

According to a 2024 Greenback Expat Tax Services survey, 77% of U.S. expats reported significant stress over complex tax and account reporting obligations (like FBAR) – highlighting how crucial it is to understand these rules. This in-depth guide answers the question “Does FBAR include retirement accounts?” with clear examples, legal insights, and expert tips for all audiences, from everyday taxpayers to seasoned professionals.

🏦 All Types of Retirement Accounts Covered: Learn which retirement plans (401(k), IRAs, foreign pensions, Roth accounts, employer plans, etc.) must be declared on FBAR – and which are exempt under U.S. law.
⚖️ Federal vs. State Rules: Understand the federal laws driving FBAR (and why states don’t have their own FBAR), plus how treaties and IRS guidance shape reporting of foreign pensions.
🔍 FBAR vs. FATCA – Key Differences: Discover how FBAR compares to FATCA Form 8938 reporting – different thresholds, overlapping requirements, and why you may need to file both for your overseas nest egg.
💡 Avoid Costly Mistakes: Uncover common traps to avoid, from misjudging the $10,000 threshold to assuming “tax-deferred” means “no reporting.” Real case examples show how to stay compliant and sidestep penalties.
📊 Expert Insights & FAQs: Get Ph.D.-level analysis distilled into simple tables, pros & cons, definitions of key terms, and an FAQ section (yes-or-no answers) tackling real questions Americans ask about FBAR and retirement accounts.

FBAR 101: Does It Include Retirement Accounts?

FBAR – the Report of Foreign Bank and Financial Accounts (FinCEN Form 114) – absolutely can include retirement accounts, as long as those accounts meet FBAR’s criteria. FBAR is a federal reporting requirement that applies to U.S. citizens, residents, and certain entities who have foreign financial accounts exceeding $10,000 in aggregate value at any point in a year. The term “foreign financial accounts” is defined broadly under federal law. It’s not limited to checking or savings accounts – it includes bank accounts, brokerage accounts, insurance policies with cash value, mutual funds, and retirement accounts held with foreign financial institutions.

Put simply, if you have a retirement account located outside the United States, it is generally considered a foreign financial account. This means if the total value of that account (combined with any other foreign accounts you hold) exceeds $10,000 at any time during the year, you are required to report it on an FBAR. Whether it’s a foreign employer’s pension plan in Germany, a personal retirement savings plan in Canada, or a self-funded pension in Australia, these are all within FBAR’s scope.

Important: U.S.-based retirement accounts (like your 401(k) or IRA held with an American financial institution) are not foreign accounts. They do not go on an FBAR because the FBAR only concerns accounts in foreign institutions. Additionally, there are specific exemptions in the FBAR rules for certain U.S. retirement vehicles – more on those shortly. But don’t be fooled: just because something is called a “retirement account” doesn’t automatically exempt it. If it’s foreign, and you have a financial interest or authority over it, FBAR rules likely apply.

What Counts as a Foreign Financial Account?

Under federal regulations, a foreign financial account includes virtually any account maintained by a financial institution outside the United States. The location of the account is what matters – not the currency or the citizenship of the institution. Key examples of reportable accounts are:

Foreign bank accounts: Savings, checking, deposit accounts in banks overseas.
Foreign securities and brokerage accounts: Accounts with foreign stockbrokers or investment firms.
Cash-value insurance or annuities: Foreign life insurance policies or annuities that have a cash surrender value (common in some retirement or endowment plans).
Mutual funds or pooled funds: Foreign mutual funds, pension funds, or similar pooled investments available to the public.
Any other account at a foreign financial institution: This is a catch-all category – if it functions like an account and it’s with a foreign financial service, it counts.

👉 Examples: A Canadian Registered Retirement Savings Plan (RRSP) or Tax-Free Savings Account (TFSA) in Canada, a UK Self-Invested Personal Pension (SIPP), a Mexican AFORE retirement account, or an Australian superannuation fund – all are considered foreign financial accounts. Each of these is held by a foreign bank, brokerage, or plan administrator, so they must be reported on FBAR if you meet the $10,000 aggregate balance threshold. Even if you consider them “retirement” funds, U.S. authorities consider them foreign accounts no different from a bank account in Switzerland or a brokerage in Hong Kong.

The $10,000 Threshold: FBAR isn’t required for every foreign account – only when the combined highest balance of all your foreign accounts exceeds $10,000 at any point in the calendar year. It’s crucial to note this is an aggregate threshold. For example, if you have a foreign pension worth $8,000 and a foreign bank account worth $4,000 at their highest points, your total foreign holdings are $12,000 – above the threshold. Both accounts must be reported, even though each one individually is under $10k. Many FBAR mistakes occur because people mistakenly think they can ignore small accounts; the law says otherwise.

Retirement Accounts Are Financial Accounts (No Automatic Exclusion)

Foreign retirement accounts often feel “different” to people – after all, they’re for long-term savings, sometimes with restricted access until retirement age. However, from an FBAR perspective, they are not different at all. If your name is on that foreign account (or you have beneficial ownership through a plan), the U.S. government generally treats it as a reportable account.

If you worked abroad and have an employer-sponsored pension in that country, that pension account is likely in your name (or allocated to you) and managed by a financial institution. It doesn’t matter if you can’t freely withdraw the money until retirement – the account exists and holds assets for you. It must be reported on FBAR once you cross the $10k total balance threshold.
If you set up an individual retirement plan overseas (similar to an IRA but in a foreign country), that too is a foreign financial account. Examples might include personal retirement investment accounts in countries without employer plans, or voluntary contributions to foreign pension schemes. These are reportable just like any bank account.
Even certain foreign social security–style funds can be considered accounts if they operate like individual savings. Many countries have hybrid systems where a government-mandated retirement fund is managed like an account with contributions from you and your employer (examples: Singapore CPF, Hong Kong MPF, Indian EPF). These typically are reportable on FBAR. You have a vested balance in a fund managed by a financial entity, so from the U.S. perspective, you have a foreign account.

Contrast with U.S. Social Security: A purely governmental pension program (like U.S. Social Security) isn’t an “account” in your name – it’s a statutory benefit. Similarly, if a foreign country has a 100% government-backed, unfunded pension where individuals have no separate accounts or current balances (a classic defined benefit plan run by the government), that might not be considered a reportable account. For instance, the “first pillar” of some countries’ retirement system (general state pension) is often not an account you control, so it’s not reported on FBAR. However, many foreign pension plans, even government-sponsored ones, do have individual account components or lump-sum values. When in doubt, it’s safer to treat it as reportable, because the U.S. definitions lean broad.

Bottom line: Foreign retirement accounts are usually treated as foreign financial accounts for FBAR. The nature or purpose (retirement saving) doesn’t exempt them. Unless a specific exception applies, assume you must include that account on your FBAR if you meet the filing threshold.

Key Exceptions: U.S. IRAs and Qualified Plans

While foreign retirement accounts generally must be reported, U.S. regulations carve out a couple of important exceptions for certain U.S.-based retirement arrangements:

IRAs (Individual Retirement Accounts): If your IRA (traditional or Roth) holds a foreign investment account, you as the IRA owner are not required to file an FBAR for the IRA’s foreign account. In other words, an IRA is a trust account that stands on its own. The IRS and FinCEN do not treat the IRA’s holdings as your personal foreign account for FBAR purposes. For example, suppose you have a self-directed IRA that invested in a bank account in Europe – you, the individual, do not report that European account on FBAR. (The IRA custodian might have other reporting duties, but you have an explicit exemption.) This exception recognizes that an IRA is a tax-exempt trust distinct from your personal assets.
Tax-Qualified Employer Retirement Plans (401(k), 403(b), etc.): Participants or beneficiaries of a U.S. tax-qualified retirement plan – such as a 401(a) plan (which includes 401(k)), a 403(a) annuity, or a 403(b) TSA – are not required to report foreign accounts held by or on behalf of the plan. If your U.S. employer’s qualified pension plan or thrift savings plan had assets in foreign accounts, the plan (as an entity) might handle any reporting, but you do not list those on your personal FBAR. Most often, these plans’ custodians are U.S. institutions anyway, but this rule is there for clarity. Essentially, if it’s a U.S. qualified retirement trust, the government doesn’t burden individual participants with FBAR reporting for plan assets.

These exceptions are very specific and apply only to U.S.-based retirement structures under the Internal Revenue Code. They do not cover foreign retirement accounts. A foreign pension plan, even if similar in concept to a 401(k), is not a “401(a) plan” under the U.S. Internal Revenue Code – it’s governed by foreign law and doesn’t fall under this exemption. So, be careful: just because you’re a participant in a foreign employer’s pension plan does not mean you get the same treatment as a participant in a U.S. 401(k). The exemptions only apply to U.S. IRAs and U.S. tax-qualified plans.

Examples:

You have a 401(k) with a U.S. brokerage that offers some international mutual fund options. The 401(k) trust might even hold assets overseas. But you do not list your 401(k) on an FBAR – it’s a U.S. account (not foreign) and it’s a qualified plan. No FBAR needed for that.
You rolled over an old 401(k) into a traditional IRA at a U.S. broker, then used a self-directed IRA custodian to invest in a rental property in France and a French bank account for that property. Under FBAR rules, you personally don’t report that French bank account – because it’s held inside your IRA (a tax-qualified trust). The law treats the IRA’s foreign account as the IRA’s responsibility, not yours individually. (Do note: the IRA custodian still has to abide by any IRS rules, and you must report income from the property, etc., but FBAR isn’t filed by you for it.)
By contrast, if you moved to the UK and have a UK workplace pension account managed by a British financial institution, that is not a U.S. qualified plan. It’s your foreign retirement account. So if that UK pension and any other foreign accounts exceed $10k, you must include it on FBAR.

FBAR Rules Under Federal Law (and Why They Matter)

Let’s delve a bit deeper into the federal law backdrop. FBAR reporting is mandated by the Bank Secrecy Act (BSA), a federal law aimed at combating tax evasion, money laundering, and use of offshore accounts for illicit purposes. The enforcement arm for FBAR is the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Treasury. FinCEN receives the FBAR forms, but the IRS is authorized to enforce FBAR compliance and assess penalties. This means that even though FBAR isn’t an IRS tax form (it’s not filed with your 1040), the IRS can come after you if you fail to file it when required.

Under federal law (31 U.S.C. §5314 and associated regulations), any “U.S. person” with foreign financial accounts exceeding the threshold must file an annual FBAR. A “U.S. person” for FBAR includes U.S. citizens, U.S. residents (including green card holders and those meeting substantial presence), and domestic entities like corporations, partnerships, trusts, and estates. So an American expat in Paris, a dual citizen living stateside with accounts abroad, or even a Delaware LLC with a foreign bank account all meet the definition.

Relevant Entities & Relationships:
This framework creates interplay between various entities:

FinCEN (Treasury) sets the rules and collects the data.
IRS (Internal Revenue Service) actively checks compliance and issues penalties. The IRS often learns about foreign accounts from multiple sources (FBAR filings, FATCA reports from foreign banks, tax return disclosures) and will compare them.
Foreign Financial Institutions (banks, investment firms overseas) may report U.S. account holders to the IRS under FATCA agreements (more on FATCA soon). So even if you don’t self-report via FBAR, the IRS could learn of your foreign retirement account through data exchanges.
Retirement Plan Administrators: If it’s a U.S. plan, the administrator/custodian might handle certain reporting, but as noted earlier, foreign plan administrators are not beholden to U.S. reporting except via FATCA. So the onus is on you to file FBAR for a foreign retirement account; your foreign employer or plan manager likely won’t do it for you.

Why This Matters: FBAR compliance is a big deal. The federal government uses FBARs to trace funds and ensure U.S. persons aren’t hiding money offshore (even if it’s legally earned). Many taxpayers have gotten in trouble simply because they didn’t realize a foreign pension or retirement savings account counted as “reportable.” But ignorance is not a defense under these laws. Penalties for failing to file can be draconian (we’ll cover that in detail later), so understanding that FBAR includes retirement accounts in many cases can literally save you tens of thousands of dollars in fines.

To summarize federal law so far:

Threshold: >$10,000 aggregate in foreign accounts = must file FBAR.
Includes: Virtually all foreign accounts (including retirement accounts, foreign pensions, etc.), unless a narrow exemption applies (like IRAs or U.S. plans as discussed).
Who files: Any U.S. person with such accounts.
When: Annually by April 15 (automatic extension to Oct 15). The FBAR for 2024 (reporting 2023 data) is due April 15, 2025, for example. It’s filed electronically through FinCEN’s system, not with your tax return.
Why: It’s the law – meant to increase financial transparency and prevent offshore evasion.

State Tax Nuances: Do States Care About FBAR?

FBAR is a creature of federal law. Individual U.S. states do not have separate FBAR reporting requirements. So, you won’t file anything like an “FBAR” on your state tax return. States generally focus on income taxable by the state and do not require disclosure of foreign accounts independently.

However, there are a couple of points to be aware of at the state level:

Taxation of Retirement Income: If you eventually receive distributions or payouts from a foreign retirement account, those might be taxable on your state tax return (just as they could be on your federal return, unless a treaty or foreign tax credit offsets it). Each state has its own rules on pension income, but broadly, if the income is included on your federal return, states with an income tax will include it too. Unlike federal law, some states don’t exempt foreign pensions or may not honor certain U.S. treaty provisions that exempt retirement income. High-tax states might fully tax a foreign pension withdrawal even if the IRS gave it favorable treatment under a treaty.
No State Penalty for No FBAR: States won’t fine you for not filing an FBAR – that’s strictly a federal enforcement issue. But, if failing to file FBAR signals unreported taxable income (e.g., unreported interest from a foreign account), then state tax authorities could get involved indirectly by auditing the unreported income. Generally though, FBAR is not on their radar directly.
Community Property States: One quirky nuance – if you live in a community property state and you or your spouse have foreign accounts, sometimes questions arise about who “owns” the account for reporting. For FBAR (federal), each spouse may need to file if both have ownership interest under community property. While that’s a federal decision, understanding your state’s property law could affect how you approach jointly held foreign accounts in marriage.

In summary, states do not impose FBAR-type filings, and nuances are more about tax treatment of the underlying retirement income. Always ensure your foreign retirement distributions are properly accounted for on both federal and state returns. But for the act of reporting the account existence and balances – that’s purely a federal matter via FinCEN/FBAR.

FBAR vs. FATCA: Reporting Foreign Retirement Accounts Twice?

U.S. taxpayers with foreign assets often encounter not just FBAR, but also FATCA reporting. FATCA stands for the Foreign Account Tax Compliance Act, a law that introduced additional reporting (Form 8938 for individuals) starting in 2011. If you have foreign retirement accounts, you may wonder how FATCA reporting differs and whether you need to do both. In many cases, the answer is yes – you might have to report the same retirement account on both FBAR and Form 8938, because these are separate requirements.

Let’s compare these two in the context of retirement accounts:

Thresholds & Scope: FBAR’s threshold is a flat $10,000 (aggregate) for all U.S. persons, regardless of income or filing status. FATCA Form 8938, however, has higher thresholds that vary. For instance, a single person living in the U.S. files Form 8938 only if their total specified foreign financial assets exceed $50,000 on the last day of the year or $75,000 at any time in the year. Those thresholds double for married joint filers in the U.S. ($100k/$150k). And if you’re an expat living abroad, the thresholds are even higher ($200k/$300k for singles, double for joint). Bottom line: You can easily trigger FBAR filing with, say, $15,000 in a foreign pension, but that alone might not trigger Form 8938 if you’re under FATCA’s higher limit. Conversely, very wealthy expats might trigger both.
Which Assets to Report: FBAR covers accounts – which, as we know, include retirement accounts held at foreign institutions. FATCA Form 8938 covers a broader category: “specified foreign financial assets.” This includes foreign financial accounts (like your foreign retirement account) and other foreign financial assets outside of accounts (for example, ownership of a foreign stock directly or interest in a foreign partnership). But importantly, foreign retirement accounts are generally part of what FATCA wants reported. The IRS explicitly includes foreign pension and retirement accounts in Form 8938 reporting if you meet the thresholds. So that Canadian RRSP, German employer pension, etc., should be reported on Form 8938 as well, not just on FBAR.
Exclusions and Overlap: There are some technical exclusions in FATCA’s regulations for certain accounts if they are already reported on other forms or if deemed low risk in intergovernmental agreements. For instance, some foreign employer retirement accounts might be excluded from the definition of a financial account for FATCA purposes under a treaty or IGA. However – and this is crucial – the IRS requires that if you’re filing Form 8938, you still must include those retirement accounts even if a U.S. agreement excluded them from foreign bank reporting. In other words, individuals must report their foreign pensions on Form 8938 regardless of whether the foreign bank had an exemption under FATCA. FBAR, on the other hand, has no such exclusions: if it’s a foreign account you own or control, and you cross $10k, you report it, period.
Filing Mechanism: FBAR is filed online through FinCEN’s BSA e-filing system, separate from your tax return. Form 8938 is part of your annual income tax return (Form 1040), filed with the IRS. Failing to file Form 8938 when required can result in a $10,000 penalty (and additional penalties if the failure continues after IRS notice), but it’s a different penalty structure than FBAR’s. Notably, Form 8938 does not replace FBAR – you must do both if both apply. There is no “double jeopardy” relief here; it’s two parallel obligations. The government’s view is that FBAR (BSA law) and FATCA (tax law) serve slightly different enforcement goals, so they make individuals disclose assets in two places. It can feel redundant (indeed, you might list the same account on an FBAR and again on Form 8938), but compliance means satisfying both sets of rules.
Information Reported: On FBAR, you report each account’s maximum value during the year, account number, financial institution, etc. Form 8938 asks for the highest value as well, plus additional details like interest earned if any, and whether the asset was income-producing. Form 8938 also asks about other assets like foreign stock or interests in foreign entities – things not captured by FBAR. For retirement accounts, typically you’d report the account value on both forms, and maybe any distributions as income on your 1040.
Enforcement Differences: The IRS is the one who checks Form 8938 since it’s part of your tax return. The IRS also can access your FBAR filings (they share info with FinCEN internally). A notable difference is in penalties: An unfiled Form 8938 has a $10,000 starting penalty (tax-related), whereas an unfiled FBAR has a separate $10,000 penalty for non-willful violations (under Title 31). These can stack. However, unlike FBAR, FATCA penalties don’t escalate per asset; and FBAR penalties can get far, far higher in willful cases (more on that later).

In practice: Many expats or taxpayers end up filing both forms. For example, an American living in France with a French bank account ($20k) and a French employer pension account ($50k) at year-end. Suppose they are single. They must file an FBAR (since $20k + $50k = $70k > $10k). Must they file Form 8938? The threshold for a single expat is $200k year-end or $300k anytime, so actually no – they’re under that, so no Form 8938. But flip the scenario: someone in the U.S. with a large foreign pension worth $600k. That person would file both FBAR (over $10k) and Form 8938 (over $50k threshold for domestic filer). Both forms would list the pension account details.

To avoid confusion: Always evaluate FBAR and FATCA separately. Being compliant with one doesn’t exempt you from the other. If in doubt, consult a tax professional, because the thresholds and definitions can be tricky. But remember – foreign retirement accounts are squarely within the scope of both FBAR and FATCA Form 8938.

(Quick note: Other forms might come into play with foreign retirement plans too, such as Forms 3520/3520-A if a foreign pension is considered a trust, or Form 8621 if it holds PFIC investments – those are beyond our main topic but worth being aware of. The IRS has provided some relief (e.g. Rev. Proc. 2020-17) to exempt certain tax-favored foreign retirement trusts from those particular forms. However, that relief does not waive FBAR or FATCA requirements. In short: even if you don’t have to file a trust form for your foreign pension, you still file FBAR and possibly 8938.)

Common Scenarios: Retirement Accounts and FBAR Implications

Retirement arrangements come in many forms. Let’s break down three common scenarios involving retirement accounts and see whether FBAR reporting applies in each:

Retirement Account Scenario	FBAR Reporting Requirement
1. U.S.-Based Retirement Account (401(k), IRA at a U.S. institution) Example: 401(k) with Fidelity or IRA at Vanguard holding domestic funds.	Not reportable on FBAR. These accounts are with U.S. financial institutions, so they are not “foreign.” Additionally, U.S. IRAs/401(k)s are tax-qualified plans, and individuals are exempt from reporting the plan’s holdings.
2. Foreign Employer Pension or Foreign Retirement Savings Account Example: Company pension in Germany, Canadian RRSP, UK pension scheme, Australian Superannuation.	Reportable on FBAR if > $10k (aggregate). You have a financial interest in an account at a foreign financial institution. Even if you can’t access funds now, it’s in your name. Must be reported once the threshold is met.
3. Self-Directed IRA Holding Foreign Assets Example: A self-directed IRA owns an LLC that holds a foreign bank account or real estate escrow abroad.	Not reportable by the IRA owner on FBAR. The IRA is the owner of the foreign account, not you personally. FBAR rules exempt IRA owners from reporting assets held inside their IRA. (The account exists, but it’s the IRA’s account.)

As you can see, the critical factor is whether you as an individual hold a foreign account or have signature authority over it. In Scenario 1, your retirement accounts are domestic – no FBAR. In Scenario 2, they’re clearly foreign and tied to you – yes FBAR (assuming the value plus any other foreign accounts > $10k). Scenario 3 is a bit tricky but highlights that ownership matters: the U.S. treats an IRA as a separate entity for FBAR purposes, removing the burden from you.

Let’s explore a few real-world examples in narrative form to solidify this:

Case Study 1: The Overseas Employee with a Foreign Pension

Situation: Maria is a U.S. citizen who worked in the UK for several years. Her UK employer provided a defined contribution pension plan through a British investment company. Each year, Maria and her employer contributed to this plan, which now has a balance equivalent to $85,000. Maria also has a UK bank account where she keeps about $5,000 for local expenses.

FBAR Analysis: Maria’s foreign accounts are (1) her UK pension account ($85k) and (2) her UK bank account ($5k). Aggregated, that’s $90,000 at peak – well above $10,000. She must file an FBAR. On the FBAR, she will report both the pension plan account and the bank account, providing the British financial institutions’ details and the maximum value of each account during the year. Even though she can’t freely withdraw all her pension money until retirement age, it’s her account and it’s with a foreign institution – it squarely falls under FBAR. Maria was savvy and also checked whether she needs Form 8938: since she lives in the U.S. now and her foreign assets are $90k, yes – that’s above $50k, so she’ll also file Form 8938 with her tax return.

Outcome: Maria files FBAR each year reporting her UK accounts. By doing so, she stays compliant and avoids penalties. She also notes that under the US-UK tax treaty, her pension growth may be tax-deferred until distribution – but that treaty benefit has no effect on the requirement to file FBAR. The IRS and FinCEN still expect the account to be reported annually.

Case Study 2: The U.S. Expat with “Social Security” Abroad

Situation: John is a dual U.S.-Canadian citizen living in Canada. He has a Canadian RRSP (Registered Retirement Savings Plan) worth $60,000. He also accrues Canadian “Old Age Security,” which is a government pension (more like U.S. Social Security) with no individual account – it’s just a promise of future monthly payments from the government. He has no other foreign accounts besides a small checking account with $2,000.

FBAR Analysis: John’s RRSP is a foreign retirement account held at a Canadian financial institution (e.g., a bank or investment fund company). That is a reportable foreign account. His Canadian government pension, however, is not an account he controls – it’s akin to Social Security. There’s no account number or balance he could list, and no financial institution – it’s just the government’s program. So the OAS pension isn’t reportable on FBAR. However, his RRSP is reportable, and because the RRSP $60k plus $2k checking = $62k total foreign assets, he crosses the $10k threshold. He must file FBAR and include the RRSP and the bank account.

John remembers hearing about an IRS provision where Canadian RRSPs got special tax treatment (indeed, there’s an election under the treaty to defer tax on RRSP growth, and Form 8891 used to be required in the past). But again, that’s a tax issue; for FBAR, the RRSP absolutely needs reporting. It’s also worth noting John might file Form 8938 if required (threshold for him as a Canadian resident and U.S. taxpayer would be $200k; he’s under that, so only FBAR in this case).

Outcome: John files his FBAR. By doing so annually, he keeps the IRS off his back. If he didn’t, the IRS could easily find out about the RRSP anyway – Canadian banks now report U.S. account holders to the IRS under FATCA. If John were to ignore FBAR, he could face penalties even if he owes no U.S. tax on that RRSP (due to treaty deferral). Compliance ensures he can sleep at night.

Case Study 3: High-Net-Worth Individual with Offshore IRA LLC

Situation: Leslie is a high-net-worth U.S. investor with a self-directed Roth IRA. She formed a special IRA-owned LLC (often called a “checkbook IRA”) and had the LLC open a brokerage account in Switzerland to diversify her retirement portfolio internationally. The Swiss account, owned by the LLC, holds $500,000 in stocks. Separately, Leslie personally also has signature authority on a foreign account: she’s a co-trustee of a foreign trust that holds $200,000 for her aging parent.

FBAR Analysis: This scenario is complex. Leslie’s Roth IRA LLC brokerage account in Switzerland – does she report it on her FBAR? Surprisingly, no, not in her personal FBAR. Why? The account is legally owned by the IRA’s LLC, which in turn is owned by her IRA (a U.S. retirement plan). The FBAR instructions specifically exempt IRA owners from reporting accounts held in their IRAs. So even though she knows about and even manages that Swiss account, it’s not considered her account for FBAR. (If FinCEN ever changes this rule it would be big news, but as of now, that’s the rule.)

However, Leslie’s signature authority on the foreign trust’s account does trigger an FBAR requirement. Even though she doesn’t own that $200k personally, she has control over it (signature authority as trustee). The FBAR rules say that if you have signature authority over a foreign account, you generally must report it as well – unless you fall into a narrow exception for corporate officers of U.S.-listed companies, etc., which she doesn’t. So Leslie would file an FBAR to report the trust’s account under her name (disclosing she’s not the owner but has control). Since the trust account $200k > $10k, threshold is met easily. She would not list the Roth IRA’s Swiss account on her FBAR due to the exemption, which is a nuance many would miss without expert knowledge.

Outcome: Leslie files FBAR to report the account where she has signature authority. She correctly omits the IRA-owned account from FBAR. She also ensures her CPA reports the Swiss account on the IRA’s filings if required (though IRAs don’t file FBAR, any income from that IRA investment will eventually be reported in her retirement distributions). This example shows the interplay of ownership and authority rules in FBAR – and why careful analysis is needed for high-net-worth strategies.

Pros and Cons of Using Foreign Retirement Accounts (as a U.S. Taxpayer)

Many U.S. individuals, especially expats and international investors, weigh the idea of keeping retirement funds abroad versus in the U.S. There are valid reasons to have foreign retirement accounts, but one must balance them against compliance burdens. Here’s a quick look at advantages and disadvantages of having foreign retirement accounts when you’re subject to U.S. tax laws:

Pros of Foreign Retirement Accounts	Cons of Foreign Retirement Accounts
Global Diversification: You can diversify currency risk and invest in international opportunities not readily available in U.S. accounts. Local retirement plans may offer assets tailored to that economy.	Complex U.S. Reporting: You face extra paperwork – FBAR, FATCA, possibly other IRS forms – every year. Compliance costs (time, accounting fees) increase with each foreign account.
Local Tax Benefits: Many countries give tax-deferred growth or employer contributions to their retirement plans. You might enjoy immediate tax relief abroad (even if the U.S. taxes it currently, some treaties help defer U.S. tax).	Double Taxation Risk: Without careful planning or a treaty, you might be taxed by the U.S. on income in the account (e.g. foreign mutual fund gains) even if it’s tax-free locally. U.S. PFIC rules can turn foreign pension investments into tax nightmares.
Convenience for Expats: If you live overseas, using local retirement vehicles can make sense for your long-term financial integration in that country (and sometimes it’s mandatory).	Penalties for Mistakes: The stakes are high. A simple oversight – like forgetting to file an FBAR – can lead to hefty penalties. Willful FBAR violations can even lead to criminal charges.
Employer Matching: If you work abroad, not participating in a foreign employer’s pension plan could mean leaving free money on the table (from employer matches or contributions).	Access and Complexity: U.S. rules might make it complex to access or transfer foreign retirement funds. Rolling a foreign pension into a U.S. IRA, for example, is usually not possible, and cashing out can trigger both U.S. tax and foreign taxes/penalties.

As this table shows, there are compelling reasons expats or international professionals end up with foreign retirement accounts – and that’s fine. The key is to manage the cons by staying compliant and planning for the U.S. tax implications. With the right advice (using treaties, credits, or strategic choices), one can mitigate double taxation and handle reporting. But one should never ignore the compliance side, because the cost of non-compliance often outweighs the benefits.

Avoid These Mistakes: FBAR Traps with Retirement Accounts

When it comes to reporting foreign retirement accounts, even savvy individuals and tax professionals can slip up. Here are some common traps and mistakes to avoid:

Assuming “Retirement” Means “Exempt”: Don’t fall into the trap of thinking a foreign pension is like U.S. Social Security and not reportable. Almost all foreign retirement accounts are reportable on FBAR. The name or purpose of the account doesn’t matter – if it’s with a foreign financial institution and you own or control it, it counts. Many have learned the hard way that their pension or retirement annuity overseas needed to be reported annually.
Ignoring Small Accounts Due to the $10,000 Threshold: Remember that the $10k threshold is for all accounts combined. A frequent mistake is, “My foreign retirement account was only $5,000, so I didn’t think I needed to file.” But if you had any other small accounts (say a $4,000 foreign bank account and a $3,000 investment account), together they put you over the limit ($12k). Then all must be reported. Always sum up the highest balances of all your foreign accounts for the year – if that total exceeds $10,000, you’re in FBAR territory, even if each account is modest on its own.
Missing the Deadline or Assuming It’s Tied to Tax Filing: FBAR has an April 15 deadline, but with an automatic extension to October 15. This often confuses people. It’s not filed with your 1040, and it doesn’t get formally extended when you extend your tax return (the extension is just automatic for everyone). A mistake is either forgetting to file because you extended your taxes (FBAR still due Oct 15!), or assuming no extension exists and panicking after April 15 (when in fact you have until Oct 15). Mark your calendar and file electronically on time.
Not Keeping Records or Using Wrong Valuations: You need to report the maximum value of each foreign account during the year, in U.S. dollars. A trap here is failing to check the account’s peak balance (maybe it spiked when a deposit was made or currency fluctuated). Also, you must use the Treasury’s year-end exchange rates for consistency. Some filers mistakenly use average rates or day-of value; others don’t document how they arrived at the USD value. Keep records of your account statements and the exchange rate used. If you can’t determine an exact max value (common with some pensions), use a reasonable estimate and document your method (e.g., highest known contribution plus growth). It’s better to over-report a bit than under-report.
Thinking FATCA Form 8938 Replacement or Exempts FBAR: A dangerous misconception is “I filed Form 8938, so I don’t need to file FBAR” or vice versa. In reality, you often need to file both. They are separate legal requirements. We discussed the differences earlier; the key point is one does not satisfy the other. The IRS has penalized folks for failing to file FBAR even when they reported accounts on 8938. Both forms target foreign assets but through different channels – always evaluate each on its own.
Believing Non-Taxable = Non-Reportable: Just because your foreign retirement account might not generate taxable income currently (for example, it’s tax-deferred until withdrawal, or covered by a treaty until you take distributions) doesn’t mean it’s invisible to FBAR. FBAR is not about whether something is taxed – it’s about the existence and value of the account. So even a zero-income account (like a pure savings pension) must be reported if it hits the threshold. A related mistake is assuming that if you didn’t profit or you actually lost money in the account, you can skip FBAR – wrong. Reporting is required regardless of gain, loss, or income, purely based on account values.
Not Considering Signature Authority Accounts: If you have signing authority on a foreign account that isn’t yours (maybe you’re a treasurer for a relative’s account, or an employee with authority on a corporate account), you might need to file FBAR for those even if you have no personal financial interest. There are specific exceptions for certain employees of banks or publicly traded companies, but for most people, if you can direct the spending of a foreign account, you are expected to report that account on your FBAR. Don’t overlook accounts where you’re an authorized signer or co-owner.
Ignoring FBAR Because “IRS Will Never Know”: With global data-sharing (FATCA agreements, etc.), the IRS has a lot more information about Americans’ foreign accounts than ever before. Many foreign banks now automatically report U.S. customers. The days of assuming an offshore account is secret are gone. Not filing an FBAR is a huge gamble. If the IRS catches it (and they have a long statute of limitations on FBAR violations, 6 years, and no statute at all for willful failures), the penalties can be crippling. Simply put, don’t risk it. Compliance is the much safer path.

By steering clear of these mistakes, you can handle your foreign retirement accounts with far less stress. If you realize you’ve made some of these errors in the past, consider consulting a tax professional about options like the IRS Streamlined Filing Compliance Procedures, which allow non-willful offenders to catch up on missed FBARs with reduced penalties. The worst thing to do is ignore the problem – it only gets worse with time.

Penalties, Enforcement, and Recent Developments

No FBAR discussion is complete without addressing what happens if you don’t comply. The prospect of penalties is one major reason why understanding FBAR’s scope (including retirement accounts) is so important.

Civil Penalties: The civil penalties for failing to file FBAR can be broadly separated into two categories – non-willful and willful violations:

Non-Willful Penalty: If you simply didn’t know or made an innocent mistake, the law provides for a penalty up to $10,000 per violation (per year). Importantly, a recent U.S. Supreme Court decision in 2023 (Bittner v. United States) clarified that for non-willful cases, this $10,000 applies per FBAR form, not per account. This was a taxpayer-friendly outcome: in that case, a taxpayer who missed five years of FBARs (with dozens of accounts) faced $2.72 million in penalties under the government’s per-account theory, but the Supreme Court held it should be $50,000 ($10k x 5 forms) instead. This ruling means if you inadvertently forgot multiple retirement accounts on your FBAR, you won’t be fined $10k for each account for non-willful failures – it’s capped at $10k per year. However, $10k per year is still a lot of money, and the IRS often uses discretion to apply lesser amounts for non-willful cases, especially if you voluntarily come forward before they find you. It can even be as low as a warning letter in perfect cases. But assume worst-case $10k/year could apply.
Willful Penalty: If the IRS establishes that you willfully failed to file (meaning you knew you should and chose not to, or you were recklessly indifferent to the requirement), the penalties skyrocket. The law allows a maximum willful penalty of the greater of $100,000 or 50% of the balance of the account per violation (per account per year). That’s right – in the worst case, they can take half of the highest balance of each unreported account, for each year it was unreported, if willfulness is proven. This can lead to astronomical penalties, sometimes exceeding the value of the account (multiple years at 50% can go beyond 100% of the account!). This isn’t common for retirement accounts specifically, but the rules don’t differentiate – willful is willful. In practice, willful penalties often get negotiated down or end up at 50% of the account as a whole via settlement, but one should never flirt with willfulness. Willful cases can also lead to criminal prosecution, since knowingly failing to file an FBAR is a felony. People have gone to prison in egregious fraud cases involving hidden offshore accounts.

Criminal Enforcement: While rare for the average expat or person with a foreign retirement account, it’s worth noting: if you deliberately conceal foreign accounts and fail to file FBARs, especially along with other fraudulent behavior (like not reporting income), the DOJ can pursue criminal charges. Conviction can carry up to 5 years in prison (or more if other laws are involved). High-profile cases (usually involving large sums and clear intent to deceive) have seen such outcomes. The IRS often reserves criminal FBAR cases for those who they believe intentionally hid money offshore (think numbered accounts in tax havens, etc.). Having an unreported foreign retirement account because you didn’t know the rule typically wouldn’t land you in criminal court – that’s what the civil non-willful penalty is for. But it underscores why compliance is critical.

Recent Developments: The FBAR landscape evolves, albeit slowly:

The Bittner case (2023) we mentioned was a significant taxpayer win, limiting non-willful penalties. It provides some peace of mind that if you inadvertently screw up multiple accounts, you won’t be fined into oblivion as long as it wasn’t willful.
FinCEN has proposed expanding the definition of accounts to include things like cryptocurrency exchanges in the future, but as of now, crypto accounts are generally not reportable unless they hold fiat or other reportable assets. Retirement accounts in crypto are rare, but watch for rule changes.
The IRS and Treasury continue to refine guidance on foreign retirement trusts and plans. As noted, Rev. Proc. 2020-17 now exempts many foreign pension plans from trust tax filings (Forms 3520) to reduce duplicative reporting. There are even proposed regulations to solidify those exemptions. This is a nod to the complexity people face – the government is saying, “We won’t double-report you on trust forms if it’s a bona fide foreign retirement plan.” However, they left FBAR and FATCA in place. So, the burden of FBAR remains unaffected by those changes.
Enforcement focus: Tax advisors report that IRS auditors do ask about foreign accounts and FBAR filing during exams, even if the exam started over a different issue. The IRS also gets data on Americans’ foreign accounts from FATCA and from whistleblowers or leaks (like the Panama Papers). Each year, FinCEN receives over a million FBAR filings, and that number grows. While not every omission is caught, the risk of being identified is increasing as data analytics improve.

If You Missed FBARs: The best approach is usually to come into compliance voluntarily. The IRS’s Streamlined Compliance procedures allow many non-willful folks to file past-due FBARs (and tax returns if needed) with reduced or no penalties (for expats, often no FBAR penalty at all; for stateside folks, typically a $10k total penalty for FBAR under the streamline). There’s also a delinquent FBAR submission procedure if you don’t owe any tax and have reasonable cause. The worst thing is to wait until the IRS contacts you; at that point, the generous programs might be off the table.

In summary, the enforcement regime around FBAR is strict. Foreign retirement accounts are not immune – if you don’t report that Swiss pension or Australian superannuation and the IRS finds out, you could face the same penalties as if it were a hidden bank account. The good news is, if you do follow the rules, you can retain your foreign retirement savings and sleep well knowing you’re on the right side of the law. And with major recent clarifications like the Bittner ruling, the fear of multi-million dollar fines for innocent mistakes is somewhat allayed. Still, it’s best never to find out what the penalty letter looks like – file those FBARs!

Key Terms and Concepts Defined

To wrap up our deep dive, let’s clarify some key terms and concepts that have been mentioned, in one easy list:

FBAR (FinCEN Form 114): The annual Report of Foreign Bank and Financial Accounts. Required under the Bank Secrecy Act, it must be filed by U.S. persons with over $10,000 aggregate in foreign financial accounts. It is filed separately from your tax return (electronically to FinCEN). Despite not being a tax form, failure to file can lead to heavy fines.
FinCEN: The Financial Crimes Enforcement Network, a bureau of the U.S. Treasury Department. FinCEN’s mandate is to safeguard the financial system from illicit use. It’s the agency that collects FBAR data. They share information with the IRS for enforcement. FinCEN sets FBAR regulations and can propose changes (like including crypto accounts in the future).
Foreign Financial Account: Any financial account located outside the U.S. This includes bank accounts, brokerage accounts, investment funds, insurance policies with cash value, annuities, retirement accounts, etc., held with a foreign institution. The definition is broad – basically, if an institution is holding money or assets for you abroad, it’s likely a foreign financial account.
Financial Interest: You have a financial interest in a foreign account if you are the owner of record or have legal title, regardless of whether the assets actually belong to someone else economically. You also have financial interest if the account is held by an entity you control (over 50% ownership of a corporation, partnership, or trust can attribute the account to you). In the context of retirement accounts, if the account is in your name or a trust for you, you have financial interest. If it’s your company’s plan but not segregated by name and you have no control, maybe not – but when in doubt, if it’s allocated to you, consider it a financial interest.
Signature Authority: The authority to control the disposition of assets in an account by direct communication to the institution. In simple terms, if you can direct transactions (withdrawals, transfers) in a foreign account even though it’s not yours, you have signature authority. People who often fall here are those with power of attorney, company executives on corporate accounts, or trustees/agents. FBAR generally requires reporting of accounts you have signature authority over, even if you have no financial interest, unless a specific exemption applies (like officers of a U.S. listed company, as discussed in FinCEN’s rules).
Aggregate Threshold: For FBAR, the $10,000 threshold applies to the combined total of all your foreign accounts. It’s not a per-account minimum. “Aggregate highest balance” means you figure out the highest value each account reached during the year (in its currency), convert to USD, sum them all up. If that sum > $10,000, you must report all those accounts (even ones with just $5). It’s a low threshold intentionally – capturing fairly small accounts if you have multiple.
FATCA (Form 8938): The Foreign Account Tax Compliance Act individual reporting form. It’s a tax return form where specified foreign financial assets are reported above certain thresholds (much higher than $10k). Overlaps with FBAR on many accounts. FATCA also refers to the broader law that compels foreign banks to disclose U.S. account holders to the IRS. FATCA and FBAR are separate; compliance with one doesn’t excuse the other.
PFIC: Stands for Passive Foreign Investment Company – a tax concept often relevant to foreign mutual funds (including those inside foreign retirement accounts). We mentioned it briefly because many foreign retirement plans invest in what the U.S. calls PFICs, leading to possibly complex U.S. tax reporting (Form 8621) and punitive taxation. While not directly about FBAR, if you have foreign funds in your retirement account, be aware of this term. The IRS has given relief for some retirement plans from PFIC reporting, but income might still be taxed if not treaty-protected.
U.S. Tax Treaty: The U.S. has tax treaties with many countries. Treaties often have provisions to avoid double taxation of retirement income (e.g., allowing deferral of pension taxation until distribution, or taxing it only in one country). However, no tax treaty overrides FBAR. Treaty deals with how income is taxed, not whether an account must be reported to Treasury. People sometimes incorrectly think a treaty-exempt account doesn’t need reporting – it does.
Foreign Trust (Form 3520): Some foreign retirement accounts technically meet the definition of a foreign trust with U.S. beneficiary. Historically, that meant you might have had to file Form 3520/3520-A. IRS has eased this for many retirement plans, as mentioned (Rev. Proc. 2020-17 excludes many foreign retirement and education trusts from those forms). The reason to know this term is that foreign pensions inhabit a gray area between trust law and account law. For FBAR, though, even if it’s a trust, if you have a >50% beneficial interest or otherwise an account, you report. The 3520 exemption does not exempt FBAR.

Armed with these definitions, you’re better prepared to interpret guidance and have informed conversations with advisors. It’s the language of international tax compliance that every cross-border individual should know at least at a high level.

Conclusion: Stay Compliant and Proactive

In closing, the question “Does FBAR include retirement accounts?” is answered with a resounding yes for foreign retirement accounts. U.S. law does not give a free pass to your overseas nest egg – if it’s in a foreign account, it’s generally subject to the same reporting as any foreign bank account. We’ve covered how federal rules require disclosing these accounts, the rationale behind it, and the consequences of non-compliance. The goal for any U.S. individual with international ties should be to integrate compliance into their financial planning. This means keeping track of your account balances, filing required forms on time, and seeking out tax treaty benefits or credits to avoid paying more tax than needed – all while meeting every reporting duty.

For professionals and high-net-worth individuals, the stakes are even higher; but at the same time, resources and expertise are available to manage the complexity. For the average expat or immigrant with a modest foreign pension, don’t be intimidated. Yes, it’s another form to file, but once you understand the rules, FBAR filing can become a routine part of your yearly tax prep. The peace of mind is well worth it. And remember, thousands of people come into compliance each year through IRS amnesty programs – so if you’re late to the game, it’s better to start now than never.

Your retirement accounts are supposed to provide comfort in your golden years, not unexpected compliance nightmares. By staying informed (as you’ve done by reading this guide) and proactive, you can ensure those accounts remain a source of future security, not present stress. In the end, knowledge and compliance are the best safeguards for your hard-earned retirement savings across borders.

FAQ: Common Questions about FBAR and Retirement Accounts

Q: Do I need to report my foreign pension or retirement account on FBAR?
A: Yes. If you’re a U.S. person and the total value of your foreign accounts (including retirement accounts) exceeded $10,000 at any time in the year, you must include the foreign pension on your FBAR.

Q: Do I include my U.S. 401(k) or IRA in the FBAR filing?
A: No. U.S.-based retirement accounts (401(k), IRA, Roth IRA, etc.) held with U.S. financial institutions are not foreign accounts, so they are not reported on FBAR.

Q: If I file FATCA Form 8938 for my foreign retirement accounts, do I still need to file an FBAR?
A: Yes. FBAR and Form 8938 are separate requirements. Even if you report a foreign account on your tax return (Form 8938), you must file an FBAR for it as well if it meets the FBAR threshold.

Q: Is a foreign employer pension considered a “foreign financial account” for FBAR?
A: Yes. In most cases a foreign employer’s pension plan in your name is a financial account at a foreign institution. It counts toward the $10,000 aggregate threshold and is reportable on FBAR.

Q: Do I have to report a foreign retirement account on FBAR if I can’t access the funds until I retire?
A: Yes. Even if the account is locked in or you’re not yet vested, as long as it’s an account held for your benefit by a foreign institution, it must be reported if you meet the filing criteria.

Q: Are there penalties for not reporting a foreign retirement account on FBAR?
A: Yes. Failure to report any foreign account (retirement or otherwise) can result in penalties ranging from up to $10,000 per year for non-willful cases to much higher amounts (or even criminal charges) for willful failures. It’s crucial to file FBARs timely to avoid these fines.