When considering retiring abroad or investing in real estate abroad, Financial planning issues, including taxes, insurance, investments, and estate plans. has to be boarded before leaving the shores of America.
Here are some things to consider when looking to retire abroad and abroad:
EXPERT ADVICE: The first thing that is required is to find experts who can help you with the questions you have, as well as help you with the questions you need to ask. With an expert who has experience in real estate and tax law for expatriates..
Taxes can be complicated, so it is wise to meet with a tax advisor who has experience in foreign tax matters. This is especially true if the person plans to work part-time and has a potential tax liability both in the US and in their new country of residence. “
TAXES: Assuming you haven’t renounced your U.S. citizenship, there will still be two certainties in your life-death and taxes. Regardless of where you live, as long as you are a U.S. citizen, you will continue to owe income tax on all income earned. However, the good news is that certain tax treaties and foreign earned income deductions and exclusions are available, but for most it is difficult to figure out and use these deductions correctly without help.
The US grants a foreign tax credit to mitigate, at least partially, the double tax burden of paying taxes to a foreign government and to the US, however you will likely still owe US taxes. Even if you retire abroad, you may still owe state taxes. But if you have established a residence in a tax-free state before moving abroad, it could position itself to save thousands. Also check if interest paid on foreign property is tax deductible in the US.
HEALTH INSURANCE: How you will pay for health care is also a concern. Most employer-provided retiree health plans do not have or have very limited overseas coverage, and Medicare does not provide coverage for US citizens living abroad.
That just means you will need to self-insure, buy coverage in your new country, or buy an international policy. There’s good news on this front too: In many destinations, you can buy health insurance that’s as good or better than your current provider and get it for a fraction of what you pay now.
For example, in many destinations, Americans will have access to excellent healthcare services, provided by trained doctors in the US or Europe. Your health care could cost you about half or less than what you pay today. Also, because a visit to the doctor in, say, Panama or Ecuador will only cost you around $ 25-50, many will simply choose to pay out of pocket.
In less developed countries, the quality of your medical care will obviously have to be considered. Although expats are eligible for Social Security benefits that can be directly deposited into a U.S. bank account, Withdraw May incur certain fees for transferring money to a foreign bank account and converting US dollars to local currency. There are some costs, but in most cases, you can have your Social Security forwarded overseas.
INVESTMENTS: Because taxes on investments in a foreign country can be complicated and some countries completely prohibit the ownership of foreign citizens, retired planning to invest in property or securities in a foreign country should consider working with a reputable attorney and others. financial professionals.
Most countries don’t have strong regulatory agencies like we have here in the US Agencies like the ‘Financial Industry Regulatory Authority’ and the ‘Securities and Exchange Commission’ … so you need to be very careful if you plan to invest in the country in which you reside:
REAL ESTATE: One issue that seems to take many Americans by surprise is the different property rules in foreign countries. Many Americans falsely assume that the right to own property is the same elsewhere as it is here in the US It is not true. For example, in Central America, what people may consider real property may actually be shares in a corporation. In that case, there is no real estate ownership, so if the corporation fails, the entire investment may be lost.
A good rule of thumb for those wishing to retire abroad is to determine how easy it is for an American to sell a property abroad. Some governments are happy that Americans are investing, but they are not happy to allow the profits to be “exported,” so they impose restrictions on the transfer of cash and other assets from the country. Investing abroad can be a pleasant experience. Basically, it is about knowing the rules, laws and regulations of the foreign country.
REAL ESTATE PLANNING: US courts generally do not have jurisdiction over the transfer to the next generation of a foreign asset owned by a US citizen Trusts drawn up in the US generally cannot contain foreign assets. Retirees should consider working with a local probate attorney for proper asset transfer as well as estate planning. One must understand whether existing wills, durable powers of attorney, and health care advance directives are recognized by the foreign government.
In order to provide the distribution of both any US property and your foreign property. An update to your wills is a good idea, especially if you own real estate abroad. You may even need a foreign will to manage your foreign assets, or simply adjust your US will to dispose of your foreign assets. Have a local attorney review your ‘powers of attorney’, especially as it will be the local hospital which will take into account the medical power of attorney if you become incapacitated.
ALTERNATIVES: For those who want to move to an exotic location but not deal with tax issues or potential estate planning issues, you may want to consider Panama, Ecuador, Guam, Puerto Rico, and the US Virgin Islands. Things are less complicated for people planning to retire there, and a growing number from other countries offer incentives for retirees aged 65 and over, including Asia.
Panama offers discounts on doctor bills and has cheaper mortgages. Ecuador treats its retirement community with great respect by offering sales tax refunds, half-price bus and plane tickets, and front-line privileges at places like the bank, airport customs, and others. Some governments, like the Philippines, have simplified their visa process and introduced low monthly income requirements to make it easier to move to their country.
Panama offers a ‘friendly nations’ visa that grants full residency to foreigners from other countries, as well as many other financial incentives.
It is a symbiotic relationship. Older people can further stretch their savings with lower health care and living costs, and the developing country can enjoy an economic boost from retiree spending.
The programs appear to be working with 50,000 retired workers and their spouses receiving Social Security benefits in South and Central America, as well as in the Caribbean. Meanwhile, every 100,000 retirees and their spouses received social security in Asian countries … an increase of more than 200% since 2003.