Expat Banking Issues - Any Suggestions?

[ncaraway]

We'll be retiring in about 3 years and one of the issues I've been unable to resolve is how to deal with banking and transferring assets from retirement accounts.

As mentioned in an earlier post, my wife and I will retire to her home country, Taiwan. We don't own property in the US so we will have no physical address here once we make our move. Banks, it seems, don't like that.

I contacted our main bank, ING Direct, and got the following response:

"Additionally, we do not accept international addresses for home or mailing addresses. If you are planning to move overseas, it may be best for you to close your accounts."

Close our accounts?! That doesn't seem like a reasonable solution to me. I will probably continue to do some consulting via the Internet and would like to keep a US account open.

Our retirement assets are mostly held at Vanguard. I contacted them to ask about accessing funds while living abroad and got this answer:

"Vanguard's electronic bank transfer option is for U.S. banks only. However, you can sell shares of Vanguard money market or bond funds and have the proceeds wired to a foreign bank. Please note that the minimum amount you can wire is $1,000."

I've looked into some offshore banks but they typically require you to keep a large balance (paying almost no interest) and are not FDIC insured.

The only solution I've come up with so far is to maintain a US address using a mail forwarding service (e.g., Mail Forwarding and US Address Solution from US Global Mail, International Mail Forwarding). I don't know if that would be acceptable for ING or not.

Does anyone else have experience with this dilemma, and if so, have you found any solutions?

 

[oilspill]

Without a US address, you'll find it difficult to open new bank accounts or credit card accounts in the future.

Do you not a have a friend or relative who will let you use their address?

 

[Rambler]

I have a BAC account, a WFA account and a JPMC acct with an overseas address. Maybe want to check with these banks and see what they say. My Schwab account is addressed to my US post office box. I don't know if they accept foreign addresses. Hope this helps.

R

 

[Ed_The_Gypsy]

Mail forwarding services work. You get a US address. RV'ers use them.

 

[kramer]

Yes, mail forwarding addresses work well, I use one for all my financial stuff (perhaps 8 financial institutions plus IRS). And they can be quite inexpensive. Many have inexpensive scanning available so if you get something that looks important you can get it scanned and read it the next day (like a letter from the IRS). Most things you can just ignore and then just forward a couple of times per year (to get credit/debit cards, etc.).

As US citizens, we take the responsive, efficient, and inexpensive banking services for granted. Yes, even my Canadian friends are envious. You will appreciate maintaining your US connections in this respect.

Kramer

 

[kramer]

accessing funds while living abroad

This is generally pretty easy. You will just transfer funds to your local bank in Taiwan (if I recall, that is where you are going).

Some ways to do this:

* Set up a wire transfer from your US bank

* Some international banks have branches in the USA. You can actually do an ACH transfer to the bank then, and it will soon appear in your local account. For instance, Bangkok Bank works this way for Thailand expatriates, they have one branch in the USA. You get that day's exchange rate minus about a 0.25% fee, if I recall.

* Surprisingly, you can sometimes write a check. Some countries and banks will have a dollar dominated account available. You just write a check and a month later the check has cleared and the money is there. Then you transfer the money within that bank to your local currency account. Generally, this is actually the cheapest way to send money.

For smaller amounts and international travel, you may want to use the debit card available on your US bank, which will offer a 0% transaction fee and reimburse all bank fees. If you don't already have such an account, open one or two before you leave the USA.

Kramer

 

[Onward]

Yes, mail forwarding addresses work well, I use one for all my financial stuff

Kramer, mind telling us which service you use, how it works, and what it costs?

Some countries and banks will have a dollar dominated account available. You just write a check and a month later the check has cleared and the money is there. Then you transfer the money within that bank to your local currency account.

So you write a check from your US acct and deposit it into the dollar-denominated acct in your foreign bank? Does it really take a month to clear?

 

[tulak]

For smaller amounts and international travel, you may want to use the debit card available on your US bank, which will offer a 0% transaction fee and reimburse all bank fees. If you don't already have such an account, open one or two before you leave the USA.

I opened a bank account at Schwab for these purposes. They reimburse all ATM fees and I think the debit card doesn't charge currency conversion fees.

I also have their credit card with 2% cash back and no fees. I know this one doesn't charge currency conversion fees. I know they stopped offerring this card, but they might have an alternative that doesn't charge fees.

I also reiterate what Kramer said about our banking services in the US being cheap. We are downright spoiled. We have a good chance of spending a lot of time outside of the US when we retire, but I would never move our finances out of the US. It would be too costly.

 

[FIREd]

As US citizens, we take the responsive, efficient, and inexpensive banking services for granted. Yes, even my Canadian friends are envious. You will appreciate maintaining your US connections in this respect.

Ain't that the truth! I currently pay over $12 a month just for the privilege to keep a checking account and debit card active in my home country! It's a racket.

 

[kcowan]

Ain't that the truth! I currently pay over $12 a month just for the privilege to keep a checking account and debit card active in my home country! It's a racket.

That seems excessive. Have you shopped around?

 

[FIREd]

That seems excessive. Have you shopped around?

I had 2 accounts in 2 different banks when I left my home country. This bank was the cheapest. Now that I live abroad, it's impossible for me to open a new account in another bank (proof or residency required), so I have to suck it up.

 

[kramer]

Kramer, mind telling us which service you use, how it works, and what it costs?



So you write a check from your US acct and deposit it into the dollar-denominated acct in your foreign bank? Does it really take a month to clear?

I have been happy with usa2me.com. You get an email each time you receive snail mail along with a description. They can scan mail contents for you. So far, they have been super reliable for me. They are in Houston, Texas. They did move once and change addresses, which was a drag. I visited their previous location, just to kick the tires, and they were totally legit and professional.

I have heard about 3.5 weeks on average to clear. I may be opening an account on my next Asia adventure, I'll let you know But if you are ever on a long trip and might be somewhere long enough to open a local account, don't forget to bring a few paper checks along.

Kramer

 

[Onward]

I have been happy with usa2me.com.

Thanks for the link. I have a feeling I'll need it at some point.

 

[dex]

I have been happy with usa2me.com. You get an email each time you receive snail mail along with a description.

Do they open and read your mail? If not, how do they give you a description?

 

[ncaraway]

Without a US address, you'll find it difficult to open new bank accounts or credit card accounts in the future.

Do you not a have a friend or relative who will let you use their address?

I don't anticipate needing to secure any more credit cards and I was hoping that our current bank account would be sufficient. I'm looking into HSBC as they have a presence in Taiwan. It's not clear to me, though, whether an account in the US would be link-able to an account held in Taiwan. I've been reluctant to stop by the local branch out of fear of having to sit through a strong-arm sales pitch.

As to friends/relatives letting us use their address, yes, we could do that. However, given that we'll be living overseas for many years - decades - I'd rather not place that kind of burden on anyone. The service I linked to (and ones like the one Kramer posted) cost about $100/year.

 

[dex]

I've looked into some offshore banks but they typically require you to keep a large balance (paying almost no interest) and are not FDIC insured.

Look into the IRS reporting requirements also. I think you have to file some forms.

 

[kramer]

Do they open and read your mail? If not, how do they give you a description?

Dex, they tell you who sent it, what it is (envelope, package), and how much it weighs. You get notified on the same day it arrives.

For scanning, they open it and scan each page, and put it online and send you the link (about a 24 hour process). I used it twice this year since I got two letters from the IRS (which were both good news). The cost for each scanning was $2.

So far in ER, I have spent less than $100 per year total on all mail forwarding costs, including the cost of occasional forwarding to a USA address. If I had to forward overseas, it would cost more.

To get the account started, you need to fill out some paperwork including an affidavit form that the Post Office provides and you need to provide plenty of identification. After all this paperwork, they can also sign for certified and registered letters for you.

 

[kramer]

ncaraway, you can send money from basically any US bank to any Taiwan bank. You do this via wire transfer which entails a fee, usually at both ends, but more on the sending end (although I have no experience with Taiwan, in particular). Also, you need to make sure they are giving you a good exchange rate, which is usually decided by the receiving bank, according to my understanding.

For security reasons, it can take a bit to set it all up, like a week or several. Then you prime the pump with a small transfer by testing it once, seeing what exchange rate you get, make sure money arrives, etc.

The total fees added up on both ends might typically be something like $35, and additionally you might take a 0.2% hit in the exchange rate. So it is best to transfer large sums, like say a year's living expenses at a time or something like that.

My experience with HSBC is that their USA accounts are not connected to other worldwide banks. The way to get this service is if you are one of their Premier customers (100K plus assets with them), and then you get a number of benefits including some kind of asset transfer service, lower fees, etc.

 

[Lancelot]

We'll be retiring in about 3 years and one of the issues I've been unable to resolve is how to deal with banking and transferring assets from retirement accounts.

As mentioned in an earlier post, my wife and I will retire to her home country, Taiwan. We don't own property in the US so we will have no physical address here once we make our move. Banks, it seems, don't like that.

I contacted our main bank, ING Direct, and got the following response:

"Additionally, we do not accept international addresses for home or mailing addresses. If you are planning to move overseas, it may be best for you to close your accounts."

Loyal, patriotic US citizens have the decency to remain in the US. If I were the king, I would dramatically increase the number of US security agencies that could readily detect US citizens even contemplating about applying for a US passport. Then after the traitors were summarily hung, drawn and quartered...

OK, OK, sorry for the rant. I'm not criticising the OP, just venting on the idiotic restrictions against US citizens that chose to live abroad If ING's actions were definsible (debatable) then perhaps they are do to the myraid of new laws restricting private transfers of funds abroad and limiting banking services to persons domiciled in the USA.

Back on topis, Kramer and other posters have offered good advice. Do you have a trustworthy friend or relative who will allow you to us their US address? Remember that the real reason companies are insisting on US addrress is for CYA; they simply don't want to put up withthe additional administrave burden of servicing clients with official foreign addresses.

Also don't hesitate to contact the company and request that your replacement ATM/Credit card be sent to your foreign address. Just remember to tell them that you are on an extended trip abroad but you have every intention of returning to your US address. If the customer service representative is uncooperative, just fire off a letter (paper is better) to the CEO. Most CSR's could care less where your replacement card is sent; they are simply covering their kiesters

Bottome line, yes, you can still do business with your US financial institutions while living abroad, you just need to be a little creative

Lance

 

[ncaraway]

ncaraway, you can send money from basically any US bank to any Taiwan bank. You do this via wire transfer which entails a fee, usually at both ends, but more on the sending end (although I have no experience with Taiwan, in particular).

My experience with HSBC is that their USA accounts are not connected to other worldwide banks. The way to get this service is if you are one of their Premier customers (100K plus assets with them), and then you get a number of benefits including some kind of asset transfer service, lower fees, etc.

ING says the following:

"At ING DIRECT USA, funds can only be transferred to banks chartered within the United States. In addition, we can only accept United States currency and do not process Euro conversions or international wire transfers."

I guess that's what I get for banking with a no-frills bank in return for the "high" interest rate of about 1.1%. We also have an account at Wachovia (soon to be Wells Fargo). It pays no interest, but we get use of their services - which I'm pretty pleased with. I will investigate that as an option.

Thanks for the input in HSBC. They market themselves as a bank catering to expats but I noticed the $100k minimum.

 

[dex]

Dex, they tell you who sent it, what it is (envelope, package), and how much it weighs. You get notified on the same day it arrives.

Thanks, I appreciate you sharing your experience.

 

[kramer]

ncaraway, it sounds like you would be wiring funds from Vanguard which is permissible. I admit, I am very surprised by ING's policy. My only suggestion is to be sure they also don't permit wiring funds abroad, which is different than an ACH "electronic transfer". Usually, the banks want to get the wire fees.

Actually, you have gotten me interested, and I am going to check up the specifics on my financial institutions.

One thing I have found is the need to diversify financial institutions. Policies change, there are problems, etc. Having a number of accounts has held me in good steed.

Lancealot's idea of using a relative/friend is a good one. I didn't have any relatives in Texas, and just didn't want to bother anyone with mail. Plus, having the online overview of mail received, ability to scan cards, etc., is nice. I would be paying anyone that did that for me, anyway. My case is different than your's because I still want to maintain a US driver's license, US bank accounts with their excellent value debit cards for extensive travel abroad, etc.

Another thing you will find useful is to read expat forums specific to Taiwan and find out how other expats handle their banking.

Kramer

 

[nun]

Look into the IRS reporting requirements also. I think you have to file some forms.

FYI as a US citizen you still have to file a 1040 every year and report any foreign accounts over $10k to the treasury. Vanguard etc will probably with hold 30% tax automatically from funds they send abroad unless you file a specific IRS form to tell them not to. Make sure you talk to a Taiwan/US qualified accountant before you move as you will have to comply with both places wrt taxation.

FYI maintaining US bank accounts and addresses can also open you up to continued state taxation.

 

[kramer]

FYI as a US citizen you still have to file a 1040 every year and report any foreign accounts over $10k to the treasury. Vanguard etc will probably with hold 30% tax automatically from funds they send abroad unless you file a specific IRS form to tell them not to. Make sure you talk to a Taiwan/US qualified accountant before you move as you will have to comply with both places wrt taxation.

FYI maintaining US bank accounts and addresses can also open you up to continued state taxation.

I have only heard of that withholding being levied on non-resident non-US citizens. All sorts of expats routinely pull money abroad without an issue, at least the ones I have talked with. They do report any money movement of $10K or higher to the IRS as required by law.

Yes, one must report foreign accounts if they total above $10K at any point during the year. Also, there is a separate reporting to do now, different than the one you do on your taxes, and it is due earlier than before (recent rule change).

You won't pay state taxes even by keeping an address in that state, if you don't return to live there or pop up on their radar (like applying for a driver's license at a later date). On your last year, file a non-resident form and use your foreign address. Even New York and California won't tax you in this situation.

Kramer

 

[nun]

I have only heard of that withholding being levied on non-resident non-US citizens. All sorts of expats routinely pull money abroad without an issue, at least the ones I have talked with. They do report any money movement of $10K or higher to the IRS as required by law.

Yes, one must report foreign accounts if they total above $10K at any point during the year. Also, there is a separate reporting to do now, different than the one you do on your taxes, and it is due earlier than before (recent rule change).

You won't pay state taxes even by keeping an address in that state, if you don't return to live there or pop up on their radar (like applying for a driver's license at a later date). On your last year, file a non-resident form and use your foreign address. Even New York and California won't tax you in this situation.

Kramer

Many financial companies will automatically withhold 30% if the payment is made to a foreign address, you have to make sure that they understand you are a US citizen and eligible for zero withholding by giving them a W-9

For some states that tax on domicile rather than residence (like MA) having an address in the state may well trigger a tax bill.