How is my 401(k) or IRA taxed if I live in Sweden?
Short answer: A 401(k) or IRA can generally stay invested and growing while you live in Sweden. Under the US–Sweden tax treaty, pension and annuity distributions are generally taxable in your country of residence, so withdrawals are typically Swedish-taxable once you are Swedish tax resident, with a US foreign tax credit available against double taxation. The account itself does not become Swedish-taxable before you draw from it.
Written and reviewed by Anthony Walsh, Selanis. Last reviewed 2026-10-09.
Why it works this way
The treaty's pension article is the mechanism that prevents the same withdrawal being fully taxed twice — the resident country generally gets first claim, and the other country's credit mechanism is meant to absorb the rest, but the credit must actually be claimed correctly on the US return.
A traditional 401(k) or IRA withdrawal is ordinary income in both systems once distributed; Sweden taxes it at its progressive rates, and the US taxes it too, relying on the treaty and credit to avoid double tax rather than an outright exemption.
Roth accounts are more exposed: the treaty does not clearly guarantee Sweden will treat Roth withdrawals as the US does, and Sweden has no domestic concept of a tax-free retirement account, so the Swedish treatment of a Roth withdrawal needs to be worked out deliberately rather than assumed.
The expensive mistake: Assuming a Roth stays tax-free just because it is tax-free in the US
Sweden has no equivalent to a Roth and no settled position guaranteeing tax-free treatment on the Swedish side. Decide the position with a Swedish-literate adviser before drawing it down, not after.
What to do
- Confirm your US custodian will keep a Swedish-resident account — Some providers restrict non-US addresses.
- Plan the treaty position before the first withdrawal — Know which country taxes first and how the credit is claimed.
- Treat Roth withdrawals separately — Get a documented Swedish tax position before relying on US tax-free treatment.