Expat Checklist: Financial Checklist Tips for U.S. Expats Moving Abroad

Don’t Move Overseas Before Taking Care of These Financial Tasks

If you’re considering a move overseas, it’s important to be financially prepared. As a U.S. expat living abroad, you’ll still need to file taxes in the United States, but that’s not your only financial consideration. The following moving abroad checklist can help prepare your finances before moving internationally.

Accounts and Investments

• Before you move abroad, make sure your bank and investment companies will still work with you while you have a non-U.S. address. Contact your financial institutions to notify them of the move and ensure you can continue using your existing accounts as an U.S. expat living overseas.
• Many brokerage firms will freeze and eventually liquidate your accounts if they find out you’re living overseas. To avoid this, establish a brokerage account with a U.S. custodian that’s friendly to U.S. expats.
• If you’re moving overseas for work, ask your employer for help establishing a local bank account in your country of residence.
  • Maintain an account in local currency.
  • Transfer a couple months of living expenses to your local account as an emergency fund.
  • Understand FBAR reporting requirements and plan accordingly.
• Alert your credit card companies that you will be living and spending in a different country.
• Confirm whether you’ll be paid in U.S. dollars or local currency.

Housing

• Research housing options before relocating.
  • Establish a housing budget.
  • Research neighborhoods for safety, proximity to work, public transportation options, etc.
  • Determine how you’ll get around in your new city.
• Break your state residency in order to avoid paying state income tax while living overseas.

Taxes

• Understand whether foreign income, such as S.-sourced investments, will be taxed in your new country of residence.
• Understand the details of any tax treaties between your new country of residence and the United States.
• Understand the tax rates in your new country of residence to determine what your net income will be. You may want to pay a local tax advisor to do a tax pro-forma to understand your local tax liability.
• Don’t forget to file your U.S. tax returns! As a U.S. citizen, you’re required file taxes in the United States even if you live in another country — now with many additional forms you haven’t filed previously (learn more about expatriation and tax considerations that affect U.S. citizens). Work with your U.S. tax preparer to determine whether you should use the foreign earned income exclusion (FEIE) and/or foreign tax credits to reduce your tax liability.
• Work with local tax advisors to determine if contributions to U.S. retirement accounts will reduce your local tax liability.

Retirement and Benefits

• If your overseas employer provides a company-sponsored retirement plan, confirm whether it’s covered by U.S. tax treaties. This is an important move, because you don’t want to invest in foreign mutual funds unless you’re covered by a tax treaty.
• Research information on your local employer-sponsored benefit plan.
• Contact your existing retirement plan providers to ensure you’re able to maintain your accounts while living abroad. Consult with an advisor that can help maintain your accounts.
• Establish an employer-sponsored retirement plan with your new employer, if necessary.
• If you’re retiring abroad, determine whether you want Social Security benefits paid into a U.S. or local account.
  • Create a profile at gov to make sure you can keep track of your Social Security benefits and apply when necessary.
• Confirm what local insurance may be available to you. Does your new country of residence offer national healthcare coverage?
  • If so, confirm your eligibility and enroll in the program.
  • If not, research and inquire about private healthcare coverage.
  • Make sure you refill any needed medications prior to moving.
• Research how your new country of residence will tax U.S. retirement distributions. For example, some countries tax Roth IRA distributions, which is an important consideration if you’re drawing on your retirement assets (watch our explainer video on considerations for U.S. expats when investing in IRAs and Roth IRAs).

Estate Planning

• Work with local estate planning lawyers to create an estate plan that will cover worldwide assets, which may include ancillary wills.
• More detailed planning may be appropriate depending on the size and complexity of your worldwide estate.

Physical Documents

• Keep in your possession any original copies of important documents, including your:
  • Birth certificate
  • Social Security card
  • Passport
  • Estate planning documents

Professional Advice

• Establish a team of qualified professionals who can navigate the intricacies of living abroad as a U.S. expat. These professionals should have experience navigating the specific complexities of your new country of residence. Your team should include:
  • A financial advisor
  • Tax advisors in both countries
  • An estate planning attorney

Other Considerations

• Consult an immigration professional and gather any necessary documentation. This professional will help you understand timelines, deadlines and customs.

If you’re considering moving overseas, Creative Planning International is here to help you navigate every aspect of your financial life. We work with Americans abroad and cross-border families to help ensure their finances remain on track while they’re living in a foreign country. We can help you maximize your wealth and avoid costly mistakes. For more information about our services for U.S. expats, request a meeting with a member of our team.