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retirement outside of the US?
have anyone looked into retiring outside of the US? Somewhere politically stable, quite with a good climate, where cost of leaving is cheaper? Instead of busting my ass for a long time to cover high costs and taxes of living in the US, I wouldn't mind leaving off small income coming from US investments. Of course, I'd need to save and invest first, though. How realist is this plan? Any good web resources on retirement overseas?
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Re: retirement outside of the US?
My dad is retired in sw Asia, but his wife is from there so it makes it easier. But, he likes it, no taxes.
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Re: retirement outside of the US?
If you remain a US citizen, provisions of the existing IRS code make you responsible to continue to pay US income taxes on income derived from US business / investments even if you no longer reside in the USA. To avoid this tax trap, one must be able to obtain citizenship of some country outside the USA and then renounce their US citizenship. Failure to do this can result in your being busted for tax evasion the minute your passport gets swept by US customs - meaning that if you can't obtain citizenship from a foreign country you can never return to the USA. Renouncing your US citizenship to avoid the US taxes while living in a foreign country, without being granted citizenship by another country, basically means you can never leave that country since you no longer will have a valid passport from ANY country.
Of course, if you measure up to Anna Nicole Smith, you can always sleep with the Bahamian Interior Minister in exchange for Bahamian citizenship !
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Re: retirement outside of the US?
I would like to keep my US citizenship once I get it (Don't have one yet) and I don't mind paying taxes. I was just wondering if anyone has been to other countries and went like "wow, I could have a great life here for so much cheaper". I know there are places like this out there, I guess I haven't traveled enough. And I am talking not soon but down the road. Perhaps I wouldn't even moved there permanently, but I'd love to experience living like a local in some tropical paradise for some time. Does it sound realistic?
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Re: retirement outside of the US?
Personally, Andorra or Malta do it for me, although they're not exactly tropical ! Belize is interesting as well.
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Re: retirement outside of the US?
Ahhhhh. My favourite topics ... money and travel.
There are about as many wonderful places as you can think of, many of which will offer advantages to expatriates. Much of southern europe has potential benefits = malta, cyprus, andorra, portugal, spain, italy and then much of the middle east would be low tax etc.
First, you need to travel and see some of the world and find out what floats your boat.
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Re: retirement outside of the US?
I'm ready to move back to Europe, sick of it here.....
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Re: retirement outside of the US?
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Originally Posted by
Melonie
Personally, Andorra or Malta do it for me, although they're not exactly tropical ! Belize is interesting as well.
Belize is nice as long as you avoid Belize City. Only a 2 hours flight from Houston, but it lands in Belize city...
All you need is a business in the US to get a permanent visa that allows you 180 or so days in the country (the US that is) a year without paying taxes, and you're golden (if you get Belize citizenship).
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Re: retirement outside of the US?
^^^ actually, the biggest worries about Belize are #1 that the country is surrounded by a bunch of unruly neighbors, and #2 that the country has demonstrated its lack of commitment in regard to Qualified Retired Persons (i.e. changing rules midstream) ! In the good old days, one could 'buy citizenship' for a one time $25k fee. But these days you can only 'rent legal resident status', and only as long as your income sources continue to provide you $25k a year in earnings from outside Belize that must be transferred into the country through Belizian bank accounts.
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Re: retirement outside of the US?
Thank you, all. Do you know any books that could guide through different aspects of retirement outside of US and also give a list of best places to retire?
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Re: retirement outside of the US?
^^^ actually, no ! The US ex-pat retirement picture is a situation which is constantly changing, both due to changing US laws, changing tax and 'immigration' laws of various foreign countries, and even the changing political / social acceptance of Americans in their midst by the citizens of foreign countries.
A recent example of this is the US Ethanol program's huge new demand for corn causing massive increases in Mexican tortilla prices - which in turn has severely affected the day to day personal economics of a lot of Mexican citizens. Some US ex-pats living in Mexico, who were formally viewed and treated reasonably well by their neighbors and ignored by much of the Mexican population, are now viewed by some Mexicans as the reason that their own families are now 'poorer' and 'hungrier'. Since these ex-pats are dependent on Mexican authorities to 'protect' them from any potential future 'hungry angry mob' action by their own citizens, many US ex-pats are now living a lot less 'comfortably' in Mexico than they were just last year.
On a somewhat similar angle, the Cayman Islands and Andorra used to be havens for more affluent US ex-pats due to their absolutely secret banking laws. However, about 4 years ago the US gov't began a very active program to clamp down on cash flows to terrorists, with one of the results being a treaty requiring many countries to share financial information about US citizens with accounts in their countries' banks. Cayman and Andorra refused to sign this treaty. As a result, the US gov't now basically considers any US citizen with accounts in Cayman or Andorran banks to be a probable tax evader at best, now subjecting the US derived incomes of these ex-pats to a near guaranteed annual audit, and potentially subjecting some of these ex-pats to immediate arrest for questioning (or worse) if and when they ever set foot on US soil again. For any US ex-pats now living in Andorra or Cayman who were unable to 'buy' citizenship when that was still possible, they are now at risk of having nowhere to go except potentially a US jail if Andorra or Cayman decide not to renew their visas.
And where Belize did sign the financial information sharing treaty re US citizens with bank accounts in their country, that country is now in the process of changing its 'foreign retiree' visa requirements ... to the point of now forcing ex-pats who did not 'buy' Belizian citizenship when it was still available to now physically leave the country of Belize every 6 months, and then apply for a new visa in order to be able to return to their Belizian 'homes'. So far this has been fairly quick and easy i.e. drive just over the Mexican border, turn around, pay Belizian customs the visa fee and fill out new paperwork, and then drive back to their house in Belize. However, with this precedent set, at any point in the future the Belizian gov't could decide to make this a much more 'painful' process.
The choice to live as an ex-pat now carries with it a large number of risk factors, the most serious being that ex-pats must live at the 'mercy' of whatever local gov't policies re immigration and taxation are currently in fashion inside their 'adopted' country. There is little that the US gov't can do to help them ... and in some cases the US gov't would like nothing better than to 'get their hands' on these ex-pats again to settle up re US tax evasion.
IMHO the only way to be reasonably secure as an ex-pat these days is to 'adopt' a country that is willing to grant citizenship to the ex-pat ... so that they have some assurance that they won't be 'thrown to the wolves' at some point in the future. Anna Nicole Smith understood this point well, which is undoubtedly the reason that she was f#$king around with the Bahamian interior minister !!! Besides 'doing' the gov't official responsible for the issuance of citizenship / passports, the other option is to attempt to 'buy' citizenship in those countries that will still allow this to take place. Needless to say, this is becoming increasingly expensive as well as increasingly difficult ...
for those that can afford it, there's
for those on a budget, theres
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Re: retirement outside of the US?
Austrailia or an southeast asian island is where id go....
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Re: retirement outside of the US?
A friend of mine mentioned the UAE. He's an expat, so he wouldn't have to pay taxes. He mentioned that international nurses do well over there. I don't know jack yet, but I'm looking into it.
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Re: retirement outside of the US?
Just be careful what you do with your money.
A lot of U.S. retirees who had moved to Mexico got in big trouble about a dozen years ago when Mexico devalued the peso and their nest eggs were suddenly 1/5 of the size they had been previously.
If you're going to live overseas, keep your money in U.S. Dollars, it's still the most stable currency in the world.
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Re: retirement outside of the US?
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If you're going to live overseas, keep your money in U.S. Dollars, it's still the most stable currency in the world.
well, I have no choice but to take issue with that comment ! At the moment the US dollar is 'falling off a cliff' in relation to many currencies, so the exchange rate problem cuts both ways.
However, the basic point is well taken ... that when one earns money in one currency but pays expenses in a different currency, as is usually the case for ex-pats, exchange rate risk can quickly turn a 'comfortable retirement' into a 'struggle'. Right now this situation is particularly important for US ex-pats living in Australia or an EU country, where the relative US dollar value has dropped like 15-20% in the past couple of years (which translates into a de-facto 15-20% increase in their local cost of living in terms of a 'fixed' US dollar denominated income).
Many would recommend that the best way to hedge against this risk is for the ex-pats to invest some portion of their retirement nest-egg in investments that are denominated in the same currency that they are paying their bills with on a daily basis. Leave another portion invested in US dollar denominated instruments. Perhaps invest yet another portion in world traded commodities like oil or gold which are more or less independent of specific currency valuations.
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A friend of mine mentioned the UAE. He's an expat, so he wouldn't have to pay taxes.
Not exactly true ... I believe that the foreign income exclusion for US ex-pats is $80k a year, which is NOT a lot of money in the UAE. Beyond that threshold, your ex-pat friend will be responsible for making tax payments to the IRS even though he is not living in the USA. If your friend chooses not to make those tax payments to the IRS, they certainly aren't going to go to the UAE and track him down. However, what WILL happen is that his passport will be flagged, such that if/when he returns to the USA US customs and the IRS will be waiting for him at the gate ! Also, there is no guarantee that the new Congress couldn't change the $80k a year foreign income exclusion in a minute if they run short of tax revenue.
Right now the UAE is actually a fairly good choice, since your friend's security is more or less guaranteed by a massive US military presence in that country. However, that situation could change in short order as well due to political changes in Washington DC. If that were to happen, your friend could very well become a 'high profile target' for his hotheaded and heavily armed neighbors almost overnight.
Economic and political 'stability' are something that most Americans take for granted. As soon as one becomes an ex-pat it's not something that can be taken for granted anymore. This is even more true if that ex-pat has made US tax decisions that prevent him from returning to the USA in times of 'instability'.
(snip)"But with new tax pressures facing American expatriates due to legislation enacted in Washington this year, some international tax lawyers say they detect rising demand from citizens to renounce ties with the United States — the only developed country that taxes it citizens while they are overseas. Americans abroad are also taxed in foreign countries where they reside.
"The administrative costs of being an American and living outside the U.S. have gone up dramatically," said Marnin Michaels, a tax lawyer with Baker & McKenzie in Zurich.
To date this year, the Internal Revenue Service has tallied 509 Americans who have given up their citizenship, said Anthony Burke, an IRS spokesman in Washington, although he added that the full figures were still being counted for "renunciants."
Applications are on the rise at the U.S. Embassy in Paris, according to an official who did not want to be named. In London, a U.S. Embassy spokeswoman, Karen Maxfield, said that the number of renunciations had remained stable for the last two years. Neither embassy disclosed the actual count of applications.
A Geneva-based tax lawyer, however, said that clients of his seeking to turn in their passports were facing far longer waits for appointments at the London embassy than in previous years.
Typically, Maxfield said, expats take the step "because they do not have strong ties to the United States and do not believe that they will ever live there in the future. All have two citizenships and generally say they would like to simplify their lives by giving up a citizenship they are not using."
Andy Sundberg, a director of Geneva-based American Citizens Abroad, has been tracking renunciations dating back to the 1960s through U.S. Treasury Department figures published yearly. He considers the numbers relatively low at this point, but he has also noticed a surge in interest among Americans in taking the ultimate step.
"I think the cup is boiling over for a number of people living abroad," Sundberg said. "With the Internet and the speed and the ubiquity of information, people are more aware of what's happening." With the changes in the tax laws, he said, some expatriates fear "they're heading toward a real storm."
He cites, for example, a survey released last month by the American Chamber of Commerce in Singapore, which polled its members in October and November and found that many were considering returning to the United States because of higher taxes.
Concern about taxes among expatriates has surged since President George W. Bush signed into law a bill that sharply increases tax rates for Americans abroad with income of more than $82,400 a year. The legislation also increases taxes on employer-provided benefits like housing allowances."(SNIP)
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Re: retirement outside of the US?
Quote:
Originally Posted by
Melonie
To avoid this tax trap, one must be able to obtain citizenship of some country outside the USA and then renounce their US citizenship. Failure to do this can result in your being busted for tax evasion the minute your passport gets swept by US customs - meaning that if you can't obtain citizenship from a foreign country you can never return to the USA.
It is possible to obtain dual citizenship. Whether or not this is a possibility for you depends on the countries in question and your situation/background. Dual citizenship is legal for Americans, and the easiest way IMHO, if this applies to you, is to obtain it jure sanguinis (through ancestry).
Go back through your family tree--which generation of your ancestors came to the US? When? From where? It can't hurt to find out, and do some research into the laws/policies of your ancestors' countries re: claiming citizenship through ancestry. If your grandparents were from Ireland, you could possibly be eligible to claim Irish citizenship. Italy has the most lenient policy, in that you can go back as far as you need to to find the ancestors that emigrated. Whereas with many Western European countries (and I think Canada as well, but don't quote me), you can only go back as far as two generations in order to claim citizenship (i.e. your grandparents must have been the ones that emigrated to the US, not your great-grandparents or anyone before them.)
(Disclaimer: I'm NOT suggesting that anyone attempt to claim dual citizenship in order to evade taxes, lol. But being a dual citizen has benefits, particularly if one of those countries is part of the EU. Especially if, like the OP, you're interested in retiring or living/working in another country. Being a citizen makes that MUCH easier.)
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Re: retirement outside of the US?
They've finally authorized dual citizenship between US and Ukraine. I think the closest one would be in Chicago. I'm not sure if there would be benefit of me getting dual. But Ukr is a beautiful country with lots of potential....
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Re: retirement outside of the US?
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Originally Posted by
Katrine
They've finally authorized dual citizenship between US and Ukraine. I think the closest one would be in Chicago. I'm not sure if there would be benefit of me getting dual. But Ukr is a beautiful country with lots of potential....
IMHO there's always a benefit to having options. If you qualify, why not get it? :)
Edited to ask: do you have any links to more information about this? I have a good friend who is Ukrainian and would be interested in hearing about this. I did a few google searches but didn't really find anything.
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Re: retirement outside of the US?
Costa Rica for me. Tropical, beautiful, relaxed lifestyle, cheaper living. And did I mention great weather year-round? :yes:
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Re: retirement outside of the US?
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Originally Posted by
Picaresque
IMHO there's always a benefit to having options. If you qualify, why not get it? :)
Edited to ask: do you have any links to more information about this? I have a good friend who is Ukrainian and would be interested in hearing about this. I did a few google searches but didn't really find anything.
Actually, my friend just got back from Ukraine and apparently Ukrainian government wants you to renounce other citizenships first. But she isn't a US citizen, so it might be different for me.
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Re: retirement outside of the US?
The above mentioning of Ireland and Italy isn't true any longer i'm afraid. Ireland had a referendum on the subject a couple of years ago and many of the passport rules have now changed.
As I understand it, Italy is little better. For a while I dated an Aussie and both her parents were Italians and she spoke fluent Italian but it still didn't swing it with the passport office. It seems that there is an age at which one must apply and after this age, you do not get another opportunity.
And to bradford ... don't get us started on the state of the US dollar, or we'll be here all year!!
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Re: retirement outside of the US?
^^^ Yup, there have been a ton of changes since 9/11 in the citizenship / permanent resident visa laws of most countries. This has quickly become a MAJOR consideration in regard to ex-pat living / retirement. It basically boils down to US tax laws which allow the US gov't to collect taxes on income earned by US citizens living outside the USA. If you wish to avoid this tax you must renounce your US citizenship. However, if you don't have a 'second' citizenship, renouncing your US citizenship can leave you as a 'stateless person', potentially subject to bullying by your adopted country, and potentially trapped in your adopted country as well.
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Re: retirement outside of the US?
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Originally Posted by
StuartL
For a while I dated an Aussie and both her parents were Italians and she spoke fluent Italian but it still didn't swing it with the passport office. It seems that there is an age at which one must apply and after this age, you do not get another opportunity.
It really depends on your situation, including the laws of your home country and sometimes, family history. In some cases it has nothing to do with your age, but rather has to do with when your parents became naturalized in their new country...bah, I could fill up ten posts with a million situations regarding Italian citizenship (I am a dual citizen of Italy and the US). I'm not familiar with Ireland's (or any other country's) current position...but if anyone wants more information about obtaining Italian citizenship via ancestry, feel free to PM me and I'll give you a load of good links and resources.)
By the way...does anyone know if they actually changed the residency requirements for Australian citizenship? I read that there was a possibility of them extending the required "permanent residency" time pre-citizenship-application by another two years.
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Re: retirement outside of the US?
Melonie- the freedom ship idea is intriguing. Alas, this was on the website:
Misperception: The ship is a tax dodge.
Facts: The Freedom Ship community has not been conceived as a tax haven. While the community itself will levy no taxes, citizens of countries such as the USA would not realize any income tax savings by residing in or running businesses in the community, at least at the federal level, since American citizens are taxed on their worldwide income. USA citizens living abroad are given tax deductions, but not if they reside on a ship. Citizens of certain other countries may realize tax savings by residing in or running businesses in the Freedom Ship community, as they would by residing in or running businesses in any country outside their own. Nonetheless, that is not one of the reasons the project was conceived.
Oh well for all of us USer's...
On another note- my parent's next door neighbors just bought property in belize and plan to move there permanently in another two or three years when they retire.
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Re: retirement outside of the US?
Quote:
Originally Posted by
Melonie
If you remain a US citizen, provisions of the existing IRS code make you responsible to continue to pay US income taxes on income derived from US business / investments even if you no longer reside in the USA. To avoid this tax trap, one must be able to obtain citizenship of some country outside the USA and then renounce their US citizenship. Failure to do this can result in your being busted for tax evasion the minute your passport gets swept by US customs - meaning that if you can't obtain citizenship from a foreign country you can never return to the USA. Renouncing your US citizenship to avoid the US taxes while living in a foreign country, without being granted citizenship by another country, basically means you can never leave that country since you no longer will have a valid passport from ANY country.
Of course, if you measure up to Anna Nicole Smith, you can always sleep with the Bahamian Interior Minister in exchange for Bahamian citizenship !
You also can't legally do that (renounce American cit. without a backup)... BUT... if you renounce American citizenship you also cannot EVER return to America. Only America and, I think, Japan do this... but they consider you a traitor and you can't return.
Also, you need a certain number of $$$ in the bank to prove you're retiring and get a retirement visa. Might be hard to immigrate, especially at a larger age.