Written by Christie Crawford
Clarksville, TN – In Part 1 of our article Packing It Up, we discussed reasons for relocating outside the US, countries looking for American immigration, and places that are a perfect match for retirees. In Part 2 we discuss Visa considerations, dual citizenship, and all other considerations for making your move abroad.
So what is the catch to moving abroad? There can be quite a few, depending on where you choose to relocate. The first is the immigration process, which can be quite lengthy. If you have deep pockets, this may not be an obstacle due to the global citizenship programs or its nickname the “Golden Visa”. In simple terms, you invest your way in. Countries, in exchange for a minimum investment, offer residency rights. These rights allow travel freedom, access to healthcare and less restrictions on taxes or business dealings. For example. to obtain Italian residency, you will need to purchase 2,000,000 Euros in government bonds.
But what if you can claim dual citizenship? Most countries have rules as to whom can live and work within their borders. Obtaining a second passport can be a way to live, work, or study without strict visa requirements or having to leave if the situation demands it. Getting an additional passport is not easy, and it’s best to consult an immigration attorney before embarking on this path. The additional passport process can be document intensive, expensive, and lengthy in time, with administrative hurdles and thousands in fees. Some countries prohibit additional passports or make it extremely difficult to get one. Others require long residency requirements or language fluency before consideration.
Still, there are some that require direct descent or as mentioned previously large investments through the Golden Visa program. Egypt is one of the few countries that allow citizenship through direct investment rather than preferred visa status. Ireland and Italy are two countries that allow for citizenship through proof of lineage. About 10% of all US citizens have Irish ancestry, and another 5% have family hailing from Italy. Others include Germany, Poland, France, India, Spain and Mexico.
Given that you’ve made it through the many barriers to allow your residence outside the US, what else do you need to consider to have a reasonable lifestyle?
Banking: You may need to have dual bank accounts at least while getting started. Finding local banking institutions to be be able to handle your local expenses and cash needs can be tricky. IRS rules on banking outside the US require reporting overseas accounts on an annual basis or being faced with penalties, especially for accounts with over $10,000. Accessing these accounts without triggering fraud claims need to be considered, so check the rules carefully. And don’t forget about currency fluctuations, which may work for or against you.
Taxes: Double taxation may be a risk to you as your host country may require payments, and in the US, citizenship, (not residency), dictates whether taxes may be levied. Your state may even require filing if income taxes are normally paid. It’s best to speak with a tax consultant familiar with international tax issues.
Health Care: Depending on what country you choose, you may qualify for national health care. But, if you are at retirement age and Medicare eligible, note that overseas expenses are not covered by regular insurance; however, Part A and B coverage could still be applicable. And you will still need to sign up at 65 regardless of where you reside if you are a US citizen. If private insurance is your choice, note that Aetna, Blue Cross Blue Shield, and Cigna offer coverage to overseas residents. So, be sure to take your health records, including immunizations, or have access to them on the internet.
Estate Planning: Should something happen to you while you are abroad, you will need to put into place a will that accommodates the rules of estate inheritance and asset distributions in your choice of country. Some states and even countries recognize an international will so you will need to do your research. Consult an attorney familiar with your countries’ estate planning wills to avoid the disaster of high taxes and unplanned transfer of assets.
The Little Things: The emotional stress of moving to another country without family, friends or even common language is a big challenge. In recent news, San Francisco residents Joanna McIsaac-Kierklo and her husband Ed moved back to California from France after an experience they coined as “too much grief and not enough joy.” The Kierklos were experienced travelers and even lived a time in London, but found the French Visa process exhausting, getting a French bank account very difficult and even simply transporting their cat expensive, costing them an extra $5,000. Finding a doctor proved challenging, as well as finding comfort foods other than cheese and bread.
The hardest of all was their struggle with language and cultural customs, which created barriers to new relationships. Added to that was the French bureaucracy which is what the Kierklos were supposedly moving away from. Luckily they had an alternative plan, which was an available apartment in San Francisco to which they will be moving back. Not all moves end up in misery as the Kierklos, but it does give one pause to pack it all up. Or at least incentive have a Plan B.
