Moving

Wish to Dwell Overseas? Make Certain Your Cash Is Prepared – San Francisco Bay Instances

By Brandon Miller, CFP

A Venn diagram of romantics and pessimists probably wouldn’t have much overlap, but both groups seem to dream of living abroad. Romantics read A Moveable Feast or The Motorcycle Diaries or Eat, Pray, Love and see themselves leaving familiar shores for more exotic places to call home. Pessimists don’t like the direction the country is headed in and dream of moving someplace cheaper and more in line with their views.

Whether you want to embrace a new country or run away from this one, moving abroad gives you lots to think through, including your housing, banking, and healthcare. Thorough planning can go a long way in making your transition to expat go more smoothly.

One thing many of my clients are surprised about is that Uncle Sam still expects some love come April 15. US citizens need to file a return and pay taxes on any worldwide income regardless of where they reside. Foreign financial accounts must be reported to the IRS, even if they don’t generate any taxable income.

Some other considerations before you start packing:

Will you live abroad all year or just part time? Living overseas doesn’t have to be all or nothing. As a part-timer, you may not need to sell your US house or buy a foreign one. Your current bank may have global partners that let you easily access your money when you’re out of the country. Health insurance is a different story, though, as Medicare, the ACA, and many domestic providers do not cover medical expenses outside the US You may need to get an international health insurance policy if the country where you live part-time does not provide public healthcare that you can access.

Living abroad fulltime generally requires more decisions. Should you sell your US house or rent it out for extra cash? Is it better to rent or buy a home (if possible) in your new country? You’ll most likely need to open an account at a bank where you’ll be living. Does it also make sense to hold onto an American bank account and credit card, as not all foreign banks offer the same amenities? And if your country of choice provides public medical care, should you supplement it with international health insurance for the flexibility to visit private hospitals and clinics?

What type of visa do you need? Your destination and the purpose of your stay will determine what’s required. An entry visa may suffice for students and tourists, while a resident visa may be needed to own property, get work, etc. If you plan to work while abroad, see if you qualify for a work visa. Better yet, get a company to transfer you to where you want to live and have them handle immigration details.

Permanent residency visas let you stay indefinitely in foreign countries that offer these. Just know that being able to show financial independence is a requirement for obtaining a visa for many countries, as they don’t want you moving there and becoming a burden on their system.

Do you want dual citizenship? Why forfeit your US citizenship when you can have your cake and eat it too? Some countries allow “golden passports” where you can buy your way into citizenship and others let you become a citizen if your ancestor was born there. Being a citizen of two countries can give you more flexibility and options when you travel. And hey, you’ll get another crack at taking a flattering passport photo.

Do you want to buy or rent? Your country of choice will determine if owning is even possible. If you’re able to buy, cash is king, of course. But if you need financing, know that foreign banks may require a steep downpayment and charge a much higher interest rate then what you see in the US You may also owe taxes when you buy the house and again if you sell, as well as having ongoing tax payments much like our property taxes.

The internet has lots of great tools to help you determine the rules and myriad requirements you’ll have to complete before booking passage to your new life. Just remember to do plenty of research before you go about fulfilling your expat dream or hitting the ejector button on your American life.

Brio does not provide tax or legal advice, and nothing contained in these materials should be taken as such. The opinions expressed in this article are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security. It is only intended to provide education about the financial industry. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. Any past performance discussed during this program is no guarantee of future results. Any indices referenced for comparison are unmanaged and cannot be invested into directly. As always please remember investing involves risk and possible loss of principal capital; please seek advice from a licensed professional.

Brio Financial Group is a registered investment adviser. SEC Registration does not constitute an endorsement of Brio by the SEC nor does it indicate that Brio has attained a particular level of skill or ability. Advisory services are only offered to clients or prospective clients where Brio Financial Group and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Brio Financial Group unless a client service agreement is in place.

Brandon Miller, CFP®, is a financial consultant at Brio Financial Group in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals.

Published on May 5, 2022

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