IRA for NRIs: Eligibility, Tax & Moving to India in 2026

What is an IRA and Why Does It Matter for NRIs?

An Individual Retirement Account (IRA) is a tax-advantaged investment account designed to help Americans save for retirement. Think of it as a container that holds your investments like stocks, bonds, mutual funds, and ETFs. The big advantage is that your money grows tax-deferred (or tax-free in the case of Roth IRAs), allowing your investments to compound faster than in regular taxable accounts.

For NRIs in the United States, IRAs serve as a critical pillar of retirement planning alongside employer-sponsored 401(k) plans. Whether you're planning to retire in the US, move back to India, or split time between both countries, understanding how your IRA fits into your overall financial picture is essential.

Traditional IRA vs Roth IRA: Key Differences

There are two main types of IRAs, and they work very differently when it comes to taxes.

Traditional IRA contributions are typically tax-deductible in the year you make them, reducing your current taxable income. Your money grows tax-deferred, meaning you don't pay taxes on gains until you withdraw. When you take distributions in retirement, the entire amount (contributions plus earnings) gets taxed as ordinary income. This makes Traditional IRAs attractive if you expect to be in a lower tax bracket during retirement than you are now.

Roth IRA contributions are made with after-tax dollars, so you don't get an immediate tax deduction. However, the payoff comes later. Your money grows tax-free, and qualified withdrawals in retirement are completely tax-free. To withdraw earnings without penalty, you must be at least 59½ years old and have held the account for at least five years. Roth IRAs are particularly attractive if you expect to be in a higher tax bracket in retirement or if you want tax diversification.

The choice between Traditional and Roth becomes more complex for NRIs because India doesn't always recognize the tax-free status of Roth IRA withdrawals. We'll explore this important distinction in detail later.

How IRAs Work for US-Based NRIs

If you're working in the US on an H-1B, L-1, or similar visa, or if you're a green card holder, you can open and contribute to an IRA just like any US citizen. You can have both a 401(k) through your employer and an IRA, maximizing your tax-advantaged retirement savings.

You can open an IRA through banks, brokerage firms like Fidelity, Vanguard, or Charles Schwab, or even robo-advisors. The account gives you control over your investment choices, and you can adjust your portfolio as your goals and risk tolerance change.

Many NRIs use IRAs as a supplement to their 401(k) or as a destination for 401(k) rollovers when changing jobs. The flexibility and investment options typically available in IRAs often exceed what's available in employer 401(k) plans.

2025 Contribution Limits and Recent Changes

For 2025, the IRA contribution limit is $7,000 per year for both Traditional and Roth IRAs combined. If you're 50 or older, you can make an additional $1,000 catch-up contribution, bringing your total to $8,000.

Recent changes under the Secure Act 2.0 have made IRAs even more attractive. Starting in 2025, individuals aged 60 to 63 can contribute an additional $10,000 annually in catch-up contributions to certain retirement accounts. The age restriction for Traditional IRA contributions has been eliminated, meaning you can now contribute at any age as long as you have earned income.

Required Minimum Distributions (RMDs) for Traditional IRAs now start at age 73 (updated from 72), giving your money more time to grow tax-deferred. Roth IRAs still don't require RMDs during your lifetime, making them excellent estate planning tools.

For NRIs specifically, understanding these limits matters because contribution eligibility depends on having US earned income after certain exclusions and deductions, which we'll cover next.

Can NRIs Contribute to an IRA?

Understanding Eligibility

This is where things get tricky for NRIs. The short answer is maybe, and it depends entirely on your specific tax situation.

The IRS has one fundamental rule for IRA contributions: you must have earned income to contribute. But for NRIs and US citizens living abroad, the calculation of eligible earned income becomes more complex due to foreign income exclusions and tax credits.

The US Earned Income Requirement

To contribute to an IRA, you need US taxable compensation. This includes wages, salaries, tips, professional fees, bonuses, and other amounts received for providing personal services. Investment income like interest, dividends, or rental income doesn't count as earned income for IRA purposes.

Here's the catch: if you're living and working abroad, you might be using the Foreign Earned Income Exclusion (FEIE) to reduce your US tax bill. While this is great for lowering your current taxes, it has a significant side effect on your IRA eligibility.

Impact of Foreign Earned Income Exclusion (FEIE) on IRA Contributions

The FEIE allows US citizens and green card holders working abroad to exclude up to $120,000 (for 2023, adjusted annually) of foreign earned income from US taxation. This is a powerful tax benefit, but there's a trade-off.

If you use the FEIE to exclude all of your income, you effectively have zero earned income for IRA purposes, making you ineligible to contribute. Let's look at an example:

Scenario 1: Priya works in Australia and earns $95,000. She uses the FEIE to exclude all $95,000 from US taxation. Because she has no income left after the exclusion, she cannot contribute to an IRA.

Scenario 2: Rajesh works in Singapore and earns $150,000. He uses the FEIE to exclude $120,000, leaving $30,000 of taxable income. Rajesh can contribute to an IRA because he has earned income remaining after the exclusion.

However, there's another option. Instead of using the FEIE, you can claim the Foreign Tax Credit (FTC). The FTC allows you to offset US taxes with foreign taxes already paid, but it doesn't reduce your earned income for IRA purposes.

Scenario 3: Priya (from Scenario 1) decides to use the Foreign Tax Credit instead of FEIE. Now her full $95,000 counts as earned income, making her eligible to contribute the maximum $7,000 to her IRA.

The key takeaway is that for NRIs living abroad, your IRA contribution eligibility depends on whether you have unexcluded earned income after applying the FEIE, or whether you choose to use the FTC instead.

Contribution Eligibility Flowchart for NRIs

Here's a simple decision framework:

Are you currently working in the US on a work visa or as a green card holder?

If yes, you can contribute to an IRA (subject to income limits for Roth IRA).

Have you moved abroad but still have US-sourced earned income?

If yes, you can contribute.

Are you working abroad and filing US taxes?

Check if you're using FEIE or FTC:

• Using FEIE and have income remaining after exclusion: You can contribute up to your remaining earned income or the annual limit, whichever is lower
• Using FEIE and excluded all income: You cannot contribute
• Using FTC instead: You can contribute (your full earned income counts)

Have you moved back to India and have no US earned income? You cannot make new contributions, but you can maintain your existing IRA.

The bottom line is that once you become an NRI without any US earned income (or with all income excluded through FEIE), you lose the ability to make new IRA contributions. However, your existing IRA remains yours, and you face no requirement to close it or withdraw funds.

What Happens to Your IRA When You Move to India?

One of the biggest concerns NRIs have is what happens to their carefully accumulated retirement savings when they decide to return to India. The good news is that you have options, and none of them require you to immediately cash out and face penalties.

Can You Keep Your IRA After Leaving the US?

Yes, absolutely. Your IRA doesn't disappear just because you're no longer a US resident. The IRS doesn't require you to close your account or withdraw funds when you leave the country. Your IRA continues to exist, and your investments continue to grow.

Most major financial institutions like Fidelity, Vanguard, Charles Schwab, and TD Ameritrade allow account holders to maintain IRAs even after moving abroad. However, policies vary by institution, and some may have restrictions on certain services for non-resident account holders.

The key things that change are your ability to make new contributions (as discussed above) and your compliance requirements for tax reporting in both countries.

Changing Your Address and Filing Form W-8BEN

When you move to India, you must update your address with your IRA custodian. This isn't just for receiving statements, it's crucial for proper tax withholding.

You'll need to submit Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting) to your financial institution. This form certifies that you are a non-resident alien for US tax purposes and establishes your eligibility for any applicable tax treaty benefits under the India-US DTAA.

Without Form W-8BEN, your IRA custodian may withhold taxes at the default rate of 30% on certain distributions, even if treaty provisions would allow for a lower rate or exemption. The form is valid for three years from the date you sign it, so you'll need to update it periodically.

Important note: Form W-8BEN is not filed with the IRS. You submit it directly to your broker or financial institution, and they keep it on file.

Options: Leave It, Roll Over, or Withdraw

Once you've moved to India, you have three main options for your IRA:

Option 1: Leave it as is. This is often the simplest approach. Your IRA continues to grow tax-deferred (for Traditional) or tax-free (for Roth), and you can withdraw according to the normal rules when you reach retirement age. This strategy works well if you don't need the money immediately and want to maximize tax-deferred growth.

The downsides include having to stay informed about US tax law changes, maintaining communication with your financial institution from India, and dealing with potential complications around estate taxes if you hold significant US assets.

Option 2: Roll over to another IRA. If your current IRA provider doesn't support international clients or you want more flexibility, you can roll over your IRA to another custodian that better serves non-resident clients. The rollover itself isn't a taxable event if done correctly as a direct trustee-to-trustee transfer.

Some NRIs also consider rolling over a Traditional IRA to a Roth IRA (a Roth conversion). You'll pay taxes on the converted amount in the year of conversion, but future qualified withdrawals will be tax-free in the US. However, remember that India may not recognize this tax-free status, so consult with a cross-border tax advisor before executing this strategy.

Option 3: Withdraw. If you need the funds for a home purchase, children's education, or other significant expenses, you can withdraw from your IRA. However, this option comes with significant tax implications that we'll explore in detail in the next section.

The best option depends on your age, financial needs, tax situation in India (whether you're RNOR or ROR), and long-term retirement plans. If you're planning to eventually return to the US or split time between countries, leaving the IRA intact often makes the most sense.

How is Your IRA Taxed in India and the US?

This is where things get complex, and understanding the rules can save you thousands of dollars in taxes. When you're living in India with a US IRA, you're potentially subject to taxation in both countries. However, the India-US Double Taxation Avoidance Agreement (DTAA) provides relief mechanisms to prevent you from being taxed twice on the same income.

US Taxation on IRA Withdrawals for Non-Residents

From the US perspective, your IRA withdrawals are generally taxable regardless of where you live. The taxation depends on the type of IRA and when you withdraw.

Traditional IRA withdrawals are taxed as ordinary income at your marginal tax rate. If you withdraw before age 59½, you'll also face a 10% early withdrawal penalty unless you qualify for an exception (such as disability, first-time home purchase up to $10,000, or qualified higher education expenses).

When you take a distribution as a non-resident, the IRS typically requires a 30% withholding on the taxable portion. However, if you've properly filed Form W-8BEN, you may be able to reduce this withholding rate under the DTAA provisions. You'll still need to file Form 1040-NR (US Nonresident Alien Income Tax Return) to report the distribution and calculate your actual tax liability, potentially claiming a refund if excess tax was withheld.

Roth IRA qualified withdrawals are tax-free in the US, even for non-residents. A qualified distribution means you're over 59½ and have held the account for at least five years. However, as you'll see shortly, India may not honor this tax-free treatment.

Required Minimum Distributions (RMDs) still apply to Traditional IRAs once you reach age 73. Even if you're living in India and don't need the money, you must take your RMD each year or face a hefty penalty (25% of the amount you should have withdrawn).

Indian Taxation: ROR vs RNOR Status

Understanding your residential status under Indian tax law is absolutely critical for determining how your IRA will be taxed. This is where many NRIs make costly mistakes.

Resident but Not Ordinarily Resident (RNOR) status is a transitional category that applies when you first return to India. You qualify as RNOR if you meet one of these conditions:

• You've been a non-resident in India for nine out of the ten preceding years, OR
• You've been in India for 729 days or fewer during the seven preceding years

RNOR status is powerful because your foreign income (including IRA distributions) is generally not taxable in India, as long as the income doesn't accrue or arise in India. This creates a valuable tax planning window, typically lasting 2-3 years after your return.

Resident and Ordinarily Resident (ROR) status kicks in once you no longer meet the RNOR criteria. At this point, your worldwide income becomes taxable in India, including your IRA withdrawals. This is when tax planning becomes crucial.

Let's look at a real example:

Amit returned to India in January 2023 after working in the US for 12 years. For FY 2023-24, he qualifies as RNOR.

If Amit withdraws $50,000 from his Traditional IRA during this year, this income is not taxable in India (though it remains taxable in the US). By FY 2025-26, Amit becomes ROR, and any IRA withdrawals from that point forward are taxable in India.

Understanding the India-US DTAA for IRAs

The Double Taxation Avoidance Agreement between India and the US prevents you from paying full taxes in both countries on the same income. The key provisions for IRA distributions fall under Article 20 (Private Pensions) and Article 23 (Other Income) of the treaty.

Under Article 20, private pensions and annuities are generally taxable only in the country of residence. However, the application to IRA distributions can be complex because the IRS may classify some distributions as "other income" rather than pensions, especially if you're taking lump sum withdrawals rather than periodic payments.

The DTAA provides two methods to avoid double taxation:

The Exemption Method: Income is exempt from tax in one country and taxed only in the other. This is rare for IRA distributions.

The Credit Method: You pay tax in both countries but claim a Foreign Tax Credit in your country of residence for taxes paid in the source country. This is the more common approach for IRA withdrawals.

If you're an ROR living in India and withdraw from your IRA, you'll typically:

1. Pay US tax (with withholding at source)
2. Report the income in your Indian ITR
3. Claim a Foreign Tax Credit using Form 67 for the US taxes already paid

The exchange rate for converting foreign taxes to rupees is calculated using the SBI telegraphic transfer buying rate on the last day of the month preceding the month in which the tax was paid.

Here's a practical example of how this works:

Example: Deepa, an ROR in India, withdraws 80,000fromherTraditionalIRA.TheUSwithholds30). Her Indian tax liability on this income is ₹19.92 lakhs (assuming 30% tax rate). She claims a Foreign Tax Credit of ₹14.94 lakhs (US tax of $18,000 converted to rupees), leaving her with an additional Indian tax liability of ₹4.98 lakhs. Her total tax paid is ₹14.94 lakhs + ₹4.98 lakhs = ₹19.92 lakhs, eliminating double taxation.

Section 89A and Form 10EE: Your Key to Avoiding Double Taxation

This is one of the most important provisions for returning NRIs, yet it's frequently overlooked. Section 89A of the NRI Income Tax Act, introduced in 2021, provides critical relief for NRIs returning to India with foreign retirement accounts like IRAs.

Here's the problem Section 89A solves: Without this provision, once you become an ROR, India would tax the annual growth in your IRA (the accrued income) every year, even though you haven't withdrawn anything.

Meanwhile, the US taxes you only when you actually withdraw funds. This creates a timing mismatch that could result in paying taxes on the same income in different years, or facing liquidity issues (paying Indian tax on growth you can't access without incurring US penalties).

Section 89A allows you to defer taxation on your IRA until you actually withdraw funds, aligning Indian taxation with US taxation. To claim this benefit, you must file Form 10EE electronically in the first year you become an ROR in India.

Here's how it works:

1. Year 1 (RNOR status): Your IRA grows from $500,000 to $550,000. No tax in India on this growth.
2. Year 2 (First year as ROR): You must file Form 10EE to elect deferred taxation under Section 89A. If you file this form, India won't tax the $50,000 growth that occurred in Year 1, or any future growth, until you withdraw.
3. Year 5: You withdraw $100,000. Both the US and India will tax this withdrawal in Year 5. You claim Foreign Tax Credit under DTAA to prevent double taxation.

Critical points about Form 10EE:

• Must be filed in the first year you become ROR
• The election is irrevocable, it applies to all subsequent years
• If you don't file Form 10EE, India will tax annual accruals on your IRA, creating the double taxation problem
• You need to provide details of your foreign retirement account, documentary evidence of how it's taxed in the foreign country, and reconciliation statements

Without Section 89A relief, you could face a situation where India taxes your IRA growth annually while the US taxes you on withdrawal, potentially resulting in tax on more than 100% of your actual gains when accounting for timing differences and exchange rate fluctuations.

The combination of DTAA benefits and Section 89A relief forms the foundation of tax-efficient IRA management for returning NRIs. However, navigating these provisions requires careful planning and documentation, which is why consulting with a cross-border tax specialist is highly recommended.

IRA Withdrawal Strategies When Living in India

Knowing when and how to withdraw from your IRA can make a significant difference in your tax bill and overall financial outcomes. The timing, amount, and method of withdrawal all have tax implications in both countries.

Before Age 59½: Penalties and Exceptions

If you withdraw from a Traditional IRA before reaching age 59½, you'll face a 10% early withdrawal penalty on top of regular income taxes. For NRIs living in India, this penalty can make early withdrawals particularly expensive.

Let's say you withdraw $50,000 at age 55. With 30% US withholding plus the 10% penalty, you'd lose $20,000 to the IRS, leaving you with $30,000.

If you're an ROR in India, you'd also owe Indian taxes on the $50,000 (though you can claim credit for US taxes paid under DTAA).

However, there are exceptions to the 10% penalty:

• Permanent disability
• Medical expenses exceeding 7.5% of your adjusted gross income
• First-time home purchase (up to $10,000 lifetime limit)
• Qualified higher education expenses
• Substantially equal periodic payments under IRS Rule 72(t)

For Roth IRAs, you can always withdraw your contributions (not earnings) tax-free and penalty-free at any age, since you already paid tax on that money. This makes Roth IRAs more flexible if you need emergency access to funds.

After Age 59½: Required Minimum Distributions (RMDs)

Once you turn 73, you must start taking Required Minimum Distributions from your Traditional IRA each year. The amount is calculated based on your account balance and life expectancy using IRS tables.

For NRIs living in India, RMDs create a planning consideration. You're forced to recognize taxable income in both countries annually, even if you don't need the money. The silver lining is that these mandatory withdrawals are often smaller than lump sum withdrawals, potentially keeping you in lower tax brackets in both countries.

Roth IRAs have a significant advantage here because they don't require RMDs during your lifetime. Your money can continue growing tax-free (in the US) for as long as you live, making Roth IRAs excellent for estate planning if you want to leave assets to heirs.

Lump Sum vs Periodic Withdrawals: Tax Implications

The way you structure your withdrawals can significantly impact your tax burden, especially in India.

Lump sum withdrawals mean taking a large amount all at once. While this gives you immediate access to funds, it can push you into higher tax brackets in both countries. The India-US DTAA classifies lump sum distributions under Article 23 (Other Income), and they're taxable in both countries with credit available for foreign taxes paid.

Periodic withdrawals spread your distributions over multiple years, potentially keeping you in lower tax brackets each year. Under certain circumstances, regular periodic payments may qualify for more favorable treatment under Article 20 (Private Pensions) of the DTAA, though the IRS definition of "periodic" is strict.

There's an important strategic consideration for the timing of withdrawals relative to your residential status in India:

During RNOR phase (typically first 2-3 years after return): Your IRA withdrawals generally aren't taxable in India. This creates a valuable window to take distributions that are only subject to US tax. Many returning NRIs strategically withdraw larger amounts during RNOR status to minimize overall lifetime taxes.

After becoming ROR: Withdrawals are taxable in India, but you can claim Foreign Tax Credit for US taxes paid. The effective tax rate depends on both countries' rates and exchange rates.

Real Scenario: Tax Calculation Example

Let's walk through a complete example to see how taxes work in practice.

Meet Kavita: She's 62 years old, returned to India in 2023, and is now an ROR (FY 2025-26). She has a Traditional IRA worth $400,000 and decides to withdraw $60,000 to purchase an apartment in Bangalore.

US Taxation:

• Withdrawal amount: $60,000
• US withholding at 30%: $18,000
• Net received: $42,000
• After filing Form 1040-NR, actual US tax liability: $13,500 (assumes 22.5% effective rate)
• US refund due: $4,500

Indian Taxation:

• Withdrawal amount in INR: ₹49.8 lakhs (at ₹83/$)
• Assuming Kavita's total income places her in the 30% tax bracket
• Indian tax on IRA withdrawal: ₹14.94 lakhs
• Foreign Tax Credit for US tax paid: ₹11.21 lakhs ($13,500 × ₹83)
• Net Indian tax payable: ₹3.73 lakhs
• Total tax paid (US + India): ₹11.21 lakhs + ₹3.73 lakhs = ₹14.94 lakhs
• Effective total tax rate: 30%

Net amount after all taxes: $60,000 - $13,500 (US tax) - ₹3.73 lakhs (approximately $4,494) = approximately $42,006

The key insight here is that through proper use of the Foreign Tax Credit under DTAA, Kavita pays tax at essentially her Indian tax rate, avoiding true double taxation. However, she must file returns in both countries and claim the credit properly using Form 67 in India.

Compare this to a scenario where Kavita had withdrawn the same amount during her RNOR phase two years earlier. She would have paid only the US tax of $13,500, saving approximately $4,500 in Indian taxes. This illustrates why the timing of withdrawals relative to your residential status matters significantly.

How Do IRAs Compare to Indian Retirement Accounts?

When you're planning for retirement as an NRI, it's helpful to understand how US IRAs stack up against popular Indian retirement savings options. Each has distinct features, tax treatments, and suitability for different situations.

IRA vs NPS (National Pension System)

The National Pension System is India's market-linked pension scheme, and it shares some similarities with IRAs while having important differences.

Investment approach: Both allow market-linked investments. NPS offers a choice between equity (up to 75%), corporate bonds, and government securities. IRAs give you complete freedom to invest in stocks, bonds, mutual funds, and ETFs of your choice.

Contributions: NPS requires a minimum annual contribution of ₹6,000 to keep the account active. IRAs have higher limits ($7,000 or $8,000 if over 50) but no minimum requirement.

Tax treatment: NPS offers triple tax benefits in India - contributions are deductible under Section 80CCD(1) (up to ₹1.5 lakhs under Section 80C) plus an additional ₹50,000 under Section 80CCD(1B), growth is tax-deferred, and 60% of withdrawals at maturity are tax-free. Traditional IRAs offer tax deduction on contributions (in the US), tax-deferred growth, but full taxation on withdrawal.

Liquidity: NPS has strict withdrawal restrictions until age 60, and even then, you must use 40% to purchase an annuity. IRAs allow withdrawals anytime (though with penalties before 59½), offering more flexibility.

Returns: NPS has historically delivered 9-12% returns over long periods, depending on asset allocation. IRAs' returns depend entirely on your investment choices - the S&P 500 has averaged about 10% annually over the long term.

Who should choose what: If you're settled in India long-term, NPS offers excellent tax benefits within India's system and is designed specifically for Indian retirement. If you're working in the US or may return there, IRAs provide more flexibility and higher contribution limits.

IRA vs PPF (Public Provident Fund)

PPF is one of India's most popular small-savings schemes, offering guaranteed returns with complete safety.

Risk profile: PPF is completely risk-free, backed by the government, currently offering 7.1% interest. IRAs can range from conservative (bonds, stable value funds) to aggressive (equity-heavy portfolios), with returns varying accordingly.

Tax treatment: PPF has EEE (Exempt-Exempt-Exempt) status in India - contributions are deductible (up to ₹1.5 lakhs under Section 80C), interest is tax-free, and maturity proceeds are tax-free. This makes PPF very attractive for conservative Indian investors. IRAs offer tax benefits primarily in the US, with Traditional IRAs being EET (Exempt-Exempt-Taxed) and Roth IRAs being TEE (Taxed-Exempt-Exempt).

Lock-in period: PPF has a 15-year maturity period with partial withdrawal allowed after 5 years. IRAs have no mandatory lock-in, though early withdrawals incur penalties.

Contribution limits: PPF allows ₹500 to ₹1.5 lakh per year. IRAs allow up to $7,000-$8,000, which is significantly more at current exchange rates (approximately ₹5.8-₹6.6 lakhs).

Who should choose what: PPF is ideal if you're risk-averse, want guaranteed returns, and are focused on India-centric retirement planning. IRAs are better if you want higher growth potential, need flexibility, or have cross-border financial interests.

IRA vs EPF (Employee Provident Fund)

EPF is India's mandatory retirement savings scheme for salaried employees, similar in some ways to the US 401(k).

Mandatory vs voluntary: EPF contributions (12% of basic salary each from employee and employer) are mandatory for eligible employees in India. IRAs are voluntary, though you obviously need earned income to contribute.

Employer contribution: EPF's biggest advantage is the matching employer contribution, effectively doubling your savings. IRAs don't have employer matching (that's the domain of 401(k)s).

Interest rate: EPF currently offers 8.25% annual interest, which is guaranteed and typically higher than fixed-income investments in the US. IRA returns depend on investment choices.

Tax treatment: EPF is EEE in India if you complete five years of service. In the US, EPF withdrawals by NRIs may be taxable, creating complexity.

Portability: EPF can be transferred between Indian employers using your Universal Account Number (UAN). IRAs are completely portable across institutions and remain yours regardless of employment changes.

Who should choose what: If you're working in India, EPF is mandatory anyway and offers excellent benefits. If you're working in the US, maximize your 401(k) first (especially to get employer match), then contribute to an IRA if you have additional savings capacity.

Conclusion

Managing an IRA as an NRI requires navigating two complex tax systems, but with proper planning, you can maximize your retirement savings while avoiding costly mistakes. Here are your key action steps:

If you're currently working in the US: Maximize your IRA contributions while you have earned income. Choose between Traditional and Roth based on your expected retirement location and tax situation. Keep excellent records of all contributions.

If you're planning to return to India: Understand your residential status timeline (RNOR vs ROR). File Form W-8BEN with your IRA custodian when you move. Consider strategic withdrawals during your RNOR phase when distributions face only US taxation.

If you've already returned to India: Verify that Form 10EE was filed in your first year as ROR. If not filed, consult a cross-border tax advisor immediately to assess your situation. Plan withdrawals to minimize lifetime tax burden using DTAA Foreign Tax Credit provisions.

Above all, remember that IRAs remain a powerful retirement savings tool even when you're living outside the US. Don't make rushed decisions out of confusion or fear. Take time to understand your options, and consult with professionals who specialize in cross-border taxation for NRIs.

Disclaimer: This content is for informational purposes only and should not be considered financial or tax advice. Tax laws vary by individual circumstances and are subject to change. Consult qualified cross-border tax professionals for advice specific to your situation, as IRA taxation for NRIs involves complex interactions between US and Indian tax codes.