Self-employed nomads have no employer plan and no company match, so saving for retirement is up to them. The steps below cover how to set a savings target, pick an account, and handle the tax rules that affect Americans abroad. Options for nomads from the UK, Canada, Australia, and Nigeria are included too. All figures are for 2026 and were checked on October 18, 2026.
How to Save for Retirement, Step by Step
1. Set a Target as a Share of Your Income
An easy target is a fixed share of what you earn. Fidelity suggests saving at least 15% of pre-tax income each year. Its guideline assumes retirement at age 67 and counts any employer match. A self-employed person has no match, so all 15% comes from the nomad.
Fidelity also publishes milestones as multiples of yearly salary:
- Age 30: 1x salary
- Age 40: 3x salary
- Age 50: 6x salary
- Age 60: 8x salary
- Age 67: 10x salary
Here is a worked example. A nomad with a $60,000 net profit would save $9,000 a year at 15%, which is $750 a month. The age 40 milestone for that income is $180,000.
Fidelity says people who plan to retire before 67 will likely need to save more than 15%. The milestones also assume typical retirement spending. A nomad who plans to live in one of the lowest-cost nomad cities may need less, although healthcare and exchange rates can change the total.
2. Choose an Account (US Citizens)
Three accounts suit most self-employed Americans. The right one depends on how much you plan to save.
- Solo 401(k): The 2026 employee limit is $24,500. The plan can also take an employer contribution of up to 20% of net earnings after half of your self-employment tax. The total cannot pass $72,000. People aged 50 or older can add $8,000, and people aged 60 to 63 can add $11,250.
- SEP IRA: The limit is the lower of 25% of pay or $72,000. For a self-employed person, this works out to about 20% of net earnings. A SEP IRA allows no catch-up contributions.
- Traditional or Roth IRA: The limit is $7,500, or $8,600 for people aged 50 or older. Direct Roth contributions phase out between $153,000 and $168,000 of income for single filers.
Using the same $60,000 net profit, self-employment tax is about $8,478. Half of it, $4,239, comes off first, which leaves net earnings of $55,761. The employer share at 20% of that amount is $11,152.
Adding the $24,500 employee limit, a Solo 401(k) could take up to about $35,652 for the year. A SEP IRA would cap at $11,152, and an IRA at $7,500. The $9,000 target from Step 1 fits inside a Solo 401(k) or a SEP IRA. An IRA alone tops out at $7,500.
A sole proprietor or single-member LLC can open a Solo 401(k) if the business has no employees other than a spouse. All of these limits depend on taxable earned income, which Step 3 covers.
3. Check How the Foreign Earned Income Exclusion Affects You
The Foreign Earned Income Exclusion lets qualifying Americans leave up to $132,900 of foreign earnings out of US income tax in 2026. Taxes for Expats notes that excluded income does not count as earned income for IRA purposes.
Solo 401(k) rules look similar. Creveling & Creveling report that the IRS told them a taxpayer who excluded all earned income cannot contribute to a Solo 401(k). One provider, Carry, argues that self-employment earnings can still support the plan because the exclusion does not lower self-employment tax. Sources disagree, so an expat tax preparer should confirm the answer before any contribution.
Two routes can keep contribution room open:
- Foreign tax credit: This leaves your earned income intact, so contribution room stays available.
- Partial exclusion: Earnings above the limit, or the part you choose not to exclude, can still support contributions.
With the $60,000 profit from Step 2, a full exclusion leaves $0 of eligible earned income for IRA purposes, and most sources say Solo 401(k) room disappears too. Claiming the foreign tax credit instead leaves all $60,000, so all three accounts in Step 2 stay open.
The exclusion may still save more tax overall. MyBankTracker notes that skipping a larger tax saving only to make a contribution may not be worth it. Switching also has limits, since revoking the exclusion generally blocks you from claiming it again for five years.
4. Open the Account From Abroad
Brokers treat clients who live abroad in different ways, according to Taxes for Expats:
- Schwab International: Serves US citizens abroad in countries where Schwab operates.
- Interactive Brokers: Applies country-by-country rules and accepts clients in many countries.
- Fidelity: Limits mutual fund purchases for customers outside the United States and may not open new accounts from a foreign address.
- Vanguard: Generally asks for a US mailing address on new accounts.
Rules change often, so a call to the broker before moving money is worthwhile. Opening the account before leaving the United States may also be easier.
Some nomads receive statements through a mail forwarding service. A mailing address alone does not decide where a broker thinks you live, so the account should show your real country of residence. US-listed funds and ETFs also help avoid the extra US reporting that foreign funds can trigger under the PFIC rules.
5. Pay Yourself First and Watch the Deadlines
Irregular income makes fixed monthly transfers hard. Moving a set share after each client payment can work better, and a variable income budget helps find a share that is realistic.
The 2026 deadlines depend on the account:
- Solo 401(k): The plan generally needs to exist by December 31, 2026 for employee deferrals, according to Beancount.io. SECURE 2.0 lets a sole proprietor open a brand-new plan and make first-year deferrals up to the tax return due date, without extensions, according to NAPA.
- SEP IRA: A SEP IRA can be opened and funded up to the filing deadline, including extensions.
- IRA: Contributions for 2026 are due by the April filing deadline, and an extension adds no time.
About ten weeks remain in 2026, so opening a plan soon is the safer choice.
6. Keep Building Social Security Credits
The exclusion does not reduce self-employment tax. Americans owe 15.3% on 92.35% of net earnings once those earnings reach $400, made up of 12.4% for Social Security and 2.9% for Medicare.
A totalization agreement can prevent paying into two systems. Under these agreements, self-employed workers pay into only one country, and a certificate of coverage proves it, according to the Social Security Administration. Without an agreement, US self-employment tax applies even if you also pay locally, according to Greenback Tax Services.
- Credits: In 2026, one credit costs $1,890 of earnings, and $7,560 earns the maximum four. Retirement benefits need 40 credits, according to AARP.
- Payments abroad: US citizens can generally receive benefits abroad, but the SSA cannot send payments to some countries, including Cuba and North Korea. Checking the SSA country list before choosing a retirement base is wise.
For more detail, see our guide on how to keep paying into Social Security while abroad.
7. Options for Nomads Who Are Not American
Other countries use different plans. Options for four common passports are listed below.
- United Kingdom: The full State Pension needs 35 qualifying years, and at least 10 years are needed for any amount. The 2026/27 full rate is £241.30 a week, according to Titan Wealth International. From April 6, 2026, voluntary Class 2 contributions are no longer available for time abroad, according to GOV.UK. Class 3 contributions cost about £957 a year, according to PensionBee, and need 10 years of UK residence or 10 years of contributions. Tax relief on a personal pension may depend on your UK tax residency.
- Canada: The 2026 RRSP limit is the lower of $33,810 or 18% of your 2025 earned income, according to Fidelity Canada. Room builds from income reported to the CRA, so the Notice of Assessment shows what is available. Your Canadian tax residency status also affects how you file while abroad.
- Australia: Sole traders have no employer making super payments, so they make personal contributions and claim a tax deduction. The concessional cap was $30,000 for 2025-26, according to the Australian Taxation Office, and is reported to be $32,500 from July 1, 2026.
- Nigeria: PenCom runs a voluntary Micro Pension Plan for self-employed people. The contributor chooses how much to pay and how often. A draft PenCom framework required contributors to live in Nigeria, so nomads abroad should confirm eligibility first.
One Mistake to Watch For
Excluding all foreign income and finding out later that no contribution room exists is an easy error to make. A nomad who files this way for many years may reach age 50 with no tax-advantaged retirement savings. Two habits can prevent this:
- Run both versions: Compare the exclusion and the foreign tax credit before the tax year ends.
- Open the plan early: Setting up a Solo 401(k) before December 31 keeps the option available.
The information here is general and is not legal, tax, or financial advice. Rules differ by country and change often, so a tax professional who works with expats can check the details for your situation.
Conclusion
Retirement saving is easier when your monthly costs stay low. Anyone choosing a next base with that in mind can search flights to a lower-cost base on FlyBibe and compare routes to cities where income stretches further. Opening an account and choosing a savings share can both be done in a few weeks, and the steps above show the order to follow.