Can U.S. citizens make sensible retirement plans while abroad?
Accidental Americans (perhaps born in the US but never lived or worked there) are still required to file U.S. tax returns in perpetuity.
One of the many problems with this is that tax deferred investment options in a U.S. citizens' resident country (i.e. outside the US) are not considered as such by the IRS.
Can a US citizen who lives and works abroad (and plans never to live or retire in the USA) therefore make sensible retirement planning decisions, and if so, how?
For example, could they contribute to a US-based tax deferred scheme like a 401K or an IRA without being resident in the USA or are there any other options available?
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You could definitely contribute to IRA if you have qualifying income.
You can also participate in local pension programs. Some countries (like Canada) have agreements that allow the same treatment to local tax deferral schemes as if they were a US qualified plan. Others don't. You'll need to check your country's tax treaty with the US. In any case, with proper planning you can still have tax deferred savings (even if the contribution itself is after-tax).
Talk to a local tax adviser who's familiar with the US tax law for expats (preferably a US-licensed CPA/EA).
You can, as mentioned in the comments, renounce your citizenship.
Or call your Congressman.
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