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Old 05-21-2012, 09:23 PM   #21
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So apparently they closed my account after just 1 year and didn't bother to wait 5 years (which would be this coming September, wouldn't it?). Anyways, I was amused by the responses to my questions about this account because each one contradicted the previous response in some way.
Just a clarification. An account goes dormant when it's not had any activity, usually after one year. Five years after that date any monies go to escheatment. If you had any money in that account, you have until September 2012 to get it or then you have to deal with the state. That's when you find your name on the Unclaimed Property list the comptroller puts out every year. If you've never dealt with the comptroller on unclaimed property, it's quite the adventure.
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Old 05-21-2012, 10:46 PM   #22
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I got a different story form Vanguard. They told me I could buy and sell in my Vanguard account even if I have a foreign residence address.
I'm basing an inability to sell on our experience last time we were non-resident. Could sell all we wanted, but could not buy.
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Old 05-21-2012, 10:48 PM   #23
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Funny, I was able to get colones, from an ATM in Costa Rica with my VA card.
Interesting when I spoke with the CSR at Vanguard today he told me there would be no way to access the cash. He talked about transferring funds to another bank if I needed to access the funds that way. He mentioned that we could write checks as long as they were for over $250.
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Old 05-21-2012, 11:10 PM   #24
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The Vanguard Money Market funds are not the same as the Vanguard Advantage bank account which appears to be run by PNC. So I can see some reasons for confusion here.

Also it's hard to find on their web site: https://personal.vanguard.com/us/help/FAQVAAContent.jsp
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Old 05-22-2012, 12:38 AM   #25
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I am semi-retired and living overseas in Asia, but didn't see any particular advantage and some disadvantages in consolidating in one account:

1. I'm a bit worried about ATM and bank fraud abroad (and in the US too, for that matter).. You can't always be assured of internet security when traveling/residing abroad and card readers are sometimes inserted into ATM slots. I therefore keep a large chunk of accessible cash (several months work) in a separate checking account (actually two different accounts), both of which can receive electronic transfers from my investment accounts.

2. I keep my investment funds in accounts at Fidelity, TRowePrice and TSP ... didn't see any particular advantage in consolidating (and in any case can only transfer out of TSP, not in).

3. Despite my best efforts, I've occasionally had freezes placed on my credit card and ATM accounts because of "suspicious activity" as I've been traveling around. When that happens, it hasn't been much of a problem since I have access to other sources of funds (I also can usually clear it up pretty quickly since I'll get called on my Vonage phone which forwards messages via email even if I lack phone coverage....

All in all, combined with a good mail forwarding service it's worked out pretty well.
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Old 05-22-2012, 02:06 AM   #26
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I am a resident overseas and still contribute to my vanguard funds. In fact my company also uses vanguard for our 401k. The only thing they told me I could not do with them from overseas is have a true brokerage account and trade stocks or non-vanguard funds.
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Old 05-22-2012, 02:12 AM   #27
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I got a different story form Vanguard. They told me I could buy and sell in my Vanguard account even if I have a foreign residence address.
Yes, but they won't let you open a new account if you live abroad. Maybe a new kind of account will be available in the future or you want to open a Roth for conversion. Better not to tell VG that you are living abroad.

Much better to use USAA (everyone can since it is a bank, not a CU.) However, USAA will charge a 1% foreign transaction fee on foreign withdrawals. Capital One doesn't.
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Old 05-22-2012, 02:49 AM   #28
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As we expect to be resident outside the US I want to consolidate to one institution.
Consolidating is a bad idea if you are moving abroad. You should do just the opposite: open a number of brokerage, checking and credit accounts because you may or may not be able to open them once you are abroad. Particularly if you intend your move to be permanent, you need to have US accounts and the ones that are useful today may be less so in the future. While still in the US I opened an account at a credit union to get a good CD rate they insisted on a copy of my electric bill to verify that I was living in the US. So, I would not have been able to open that account after I left.

If you will be settling in one country, as opposed to being on the move, you should open a local bank account with a local ATM card. The ideal candidate is one that has a branch in the US. If it does, then you may be able to do a free ACH transfer from your US bank into your local account. USAA is ideal for this purpose because they do not charge for an outgoing ACH. The local bank may charge something to receive the ACH however. Here in Thailand I do transfers monthly from my USAA account to my local Bangkok Bank account via the New York branch of Bangkok Bank whose ABA number makes the ACH possible. This is cheaper than doing an international wire transfer. My local Bangkok Bank account allows me to make online payments here in Thailand for utilities, rent, etc. Because the impending FATCA provisions make opening accounts for Americans onerous, it's much safer to pick a bank that already has a branch in the US and is therefore invested in the US market.

You want to have credit cards that do not charge a foreign exchange fee (e.g. PenFed cards or Capital One.) If you can find an ATM card that does not charge a foreign exchange fee and reimburses the local ATM fee, that is ideal. I think only Cap One offers this now. Credit cards issued by foreign banks may not provide the same fraud protections as US cards. You need several credit cards because their terms may become unfavorable in the future and you may get frozen out while traveling on occasion. I was recently able to open a Capital One credit account because I have a US mailing address, which is a mail forwarding service. CapOne recognized the mail forwarder, but never asked for my residential address. I use the US mailing address as my address of record for all US bank and brokerage accounts. We are careful to use each credit card frequently to keep them all active.

Brokerage firms will either close your account when you move out of the country or restrict your activities. Since there is no upside to informing them, don't do it.
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Old 05-22-2012, 06:40 AM   #29
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Schwab offers free interest bearing checking that links to brokerage accounts.
ATM fees are waived - including international ones. (Up to a limit per month... 10?)

I've been really pleased with Schwab for both IRAs and banking. And we had no issues using the ATM in Europe.
Some of my grantees have used Schwab while here in China and have raved about them.

We have used a credit union account as our main US bank account for the ten years we have been living in China and have never had any problems. I can arrange a wire transfer to our China account (currently at Citi, since that is where we could get a mortgage most easily) over the phone, and it deposits the next day. $15 wire transfer fee per transfer, which is quite reasonable (commercial banks seem to charge a lot more). I let cash build up in our US accounts via our direct deposit arrangements -- I park at ING for higher interest rates in the accumulation phase, and then transfer back to the credit union shortly before I plan the wire transfer. I do those a couple of times a year for living expenses/mortgage payments (which are automatically withdrawn from the Citi account).

I track all accounts in yodlee moneycenter, and have never had a problem with suspicious activity, etc.

We don't use the credit cards as much because of the currency conversion/potential hassle factor (they often lock them, even if you have told them you are "on a business trip overseas" -- never tell them you've moved, by the way, or they might cut you off), but Capital One doesn't charge ridiculous surcharges for overseas use.
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Old 05-22-2012, 08:29 AM   #30
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I'm basing an inability to sell on our experience last time we were non-resident. Could sell all we wanted, but could not buy.
I was told that I could buy just as I do now by ACH transferring money from a US bank. I plan to combine my Vanguard account with HSBC accounts in US and UK when I move to the UK.
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Old 05-22-2012, 01:09 PM   #31
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Our situation is probably a bit different from others because we are Australian citizens in the US on green cards with no intent on retiring in the US. We are not sure where we will live, Australia is our fall back position, but DH has a European passport so we are looking at France and perhaps splitting time with an Asian country.

Reason I want to consolidate is it is a pain in the butt managing multiple accounts. I am so over remembering logins, when you need to call from overseas it is frustrating and getting the CSR to comprehend what you are on about is another thing. Last time we went back to Oz for a couple of years we had a ton of money in WF and getting it transferred out was impossible if we were not present to do the transaction. This was despite my getting detailed instructions from WF before we left the US and these details were total poppycock.

We are probably going to do what we need to do to maintain the green cards for the next couple of years, but once we are sure we have no desire to seek employment or live in the US again we will just let them expire. If it was not for our 401k accounts we would be on the verge of doing so now.

One other bank I am going to look at is HSBC because I could set up a US bank account and a European Euro account and they will transfer between the two.
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Old 05-22-2012, 08:33 PM   #32
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Our situation is probably a bit different from others because we are Australian citizens in the US on green cards with no intent on retiring in the US.
That puts you in a bind. If you indeed settle outside the US you will be carrying your assets in USD while your liabilities will be either in EUR or AUD. Generally this is undesirable although at the moment the USD is appreciating against both currencies. What is the advantage of holding the 401k once you have definitively left the US? Does the EU or Oz treat 401k distributions favorably? I don't suppose that you can make it a contribution to the superannuation scheme, can you? Is your goal to repatriate your US assets as soon as possible? Are you waiting until age 59 1/2 to avoid penalties.

I used HSBC premier accounts in New York and Bangkok for a while. The service was fine. There were no out-of-pockets costs, but a large opportunity cost since I had to maintain USD 100k in the NY account to qualify for the free transfer services. It worked well until HSBC sold off their entire Thailand operation. I read a lot of complaints about international transfers at Wells. I have had zero problems with USAA Bank, perhaps because their target clientele is military and ex-military for whom living abroad is not extraordinary.
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Old 05-22-2012, 10:13 PM   #33
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What is the advantage of holding the 401k once you have definitively left the US? Does the EU or Oz treat 401k distributions favorably? I don't suppose that you can make it a contribution to the superannuation scheme, can you?
You cannot do a rollover from a 401k to a non-US retirement account. Many tax treaties will recognize the tax free growth of US retirement accounts and if you are not a US citizen or resident income distributions will probably only be taxable in your country of residence. that's certainly the situation for the UK.

If you hold US retirement accounts, live in the EU and want to avoid currency issues you could invest in a European stock index fund, although you might have some other worries about those right now so keeping in US equities and bonds might be a good idea.
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Old 05-23-2012, 10:53 AM   #34
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I asked Vanguard about this and this is their reply this morning (bold is mine). It looks like, for a move to the UK, the only thing I would lose is the advice services I currently have as a Flagship customer.

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Foreign countries often have laws governing who can sell securities (such as mutual fund shares) to residents of their countries. To reduce the risk that Vanguard might violate these foreign securities laws and regulations, we have a Foreign Investor Policy. This policy outlines who can open an account, who can maintain an account and who is not permitted to invest in our funds. Clients with an existing account that are changing to a non-U.S. address, can continue to make additional purchases or open new account registration types unless they live in Canada or a sanctioned country. Our Advice Services Group, however, generally will not offer services to foreign investors. They offer service to persons who maintain a legal, permanent residence-in the United States. Permanent residents of the United States, regardless of citizenship can use advice services; conversely, people who live outside of the United States, even if they are U.S. citizens, generally cannot.
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Old 05-23-2012, 11:01 AM   #35
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DW is a Fidelity customer, here is their response, which indicates that we would not be able to continue using Fidelity.com as usual, otherwise no problems in buying and selling.

During our 7 months stay in the UK last year we used Fidelity.com many times, and it didn't detect and block our access, so I guess they are saying that it is not designed for overseas use. (so no promises it will always work as intended)

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Thank you for contacting Fidelity Investments. I am happy to help you with your questions regarding relocating to the UK.

You are able to contact Fidelity while in the United Kingdom by calling 00-800-544-66666. Financial Representatives are available 24 hours a day, 7 days a week, and would be able to assist you with buying and selling shares over the phone. Fidelity.com is only designed to be used for clients that are located within the United States, and not intended for use in other countries.

If you are interested in changing your current address to a United Kingdom address you are able to do so by contacting us back with the request through a secure email or chat or by calling 800-544-6666 to speak with a Representative while you are still in the United States.
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Old 05-23-2012, 11:06 AM   #36
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That puts you in a bind. If you indeed settle outside the US you will be carrying your assets in USD while your liabilities will be either in EUR or AUD. Generally this is undesirable although at the moment the USD is appreciating against both currencies. What is the advantage of holding the 401k once you have definitively left the US? Does the EU or Oz treat 401k distributions favorably? I don't suppose that you can make it a contribution to the superannuation scheme, can you? Is your goal to repatriate your US assets as soon as possible? Are you waiting until age 59 1/2 to avoid penalties.
We always knew there was a question mark over where we would settle so have never carried all our assets in one currency. We had our largest chunk of change in Australia earning 6%. However, with the Aussie dollar starting to fall, I have no real desire to take any US$ back there at this time. My strategy with the US$ is to live off them using our US credit cards which earn us points and have no foreign exchange fees.

The 401k presents a challenge. No way it can be expatriated without penalty. We would have another 10 years to wait to avoid penalties. Not sure how we are going to handle that one. All I know is we would like to untangle the web so we can lose any liability to the US for tax for any reason. The thought of having to pay any estate taxes making me want to puke. How many bites of the damn apple do they want?
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Old 05-23-2012, 01:13 PM   #37
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Interesting when I spoke with the CSR at Vanguard today he told me there would be no way to access the cash. He talked about transferring funds to another bank if I needed to access the funds that way. He mentioned that we could write checks as long as they were for over $250.
I have used my Vanguard Advantage card to withdraw $$ in Thailand, The Philippines and USA.
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Old 05-23-2012, 10:45 PM   #38
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The 401k presents a challenge. No way it can be expatriated without penalty. We would have another 10 years to wait to avoid penalties. Not sure how we are going to handle that one. All I know is we would like to untangle the web so we can lose any liability to the US for tax for any reason. The thought of having to pay any estate taxes making me want to puke. How many bites of the damn apple do they want?
The only way to avoid US tax on the 401k distributions is to become a NRA in a country with a tax treaty with the US that makes pension and retirement income payments non-US taxable. That's entirely possible, but you will have to wait until you are 59.5 or do a SEPP to avoid the 10% penalty which seems entirely right and proper as that's the way 401ks work. Also remember to fill out the 8854 expatriation form if you give up your Green cards.

On option that might work for you would be to rollover into a ROTH, this will produce a tax bill, but if you do it over a number of years you can limit the amounts due. ROTH gains and distributions are tax free in the US and also in some treaty countries, eg they are also tax free in the UK.
You will probably find yourself paying estate taxes wherever you live, unless you find some tax haven that will give you a break.
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