Can I contribute to a Roth IRA while living abroad?

Yes, but with an important catch: you need earned income that is not fully excluded by the FEIE.

If you exclude all your foreign earned income using the Foreign Earned Income Exclusion (Form 2555), your taxable compensation becomes $0 — meaning you have no eligible income to contribute to a Roth IRA for that year.

Options available to expats:

1. Limit your FEIE claim: If your income exceeds the $126,500 exclusion limit (2024), remaining taxable earned income can support Roth IRA contributions up to $7,000 ($8,000 if 50+).

2. Use the Foreign Tax Credit instead: Claiming the FTC (Form 1116) rather than FEIE preserves your earned income for IRA purposes while still reducing or eliminating US tax — often to zero for expats in high-tax countries.

3. Roth conversions: Even in years you cannot contribute, you may be able to convert pre-tax IRA or 401(k) funds to Roth when your US taxable income is low.

Note: Roth income limits phase out at $146,000–$161,000 for single filers (2024), but the FEIE actually helps high earners stay under this threshold.