Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 12-08-2014, 11:53 AM   #121
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 20,063
Quote:
Originally Posted by theOAP View Post
Given your situation, that's a very good quote. I assume most funds will remain in the States, and few 8938's will be required. Advisors have been taking advantage of permanent residents with most of their funds abroad by charging for each 8938. The price escalates quite quickly. I also assume you'll be doing your own FBAR?
I exchanged a few emails and then an advisor called me and we talked over our exact circumstances, so I'm hopeful that the verbal estimates are fairly accurate.

I will continue to do our FBAR filing myself, and I don't expect we will meet the requirement for form 8938 anytime soon as that threshold is pretty high for married couples ($150k at any time during the year or $100k at end of year), because we don't intend moving loads of money to the UK as we won't be buying a house.
__________________

__________________
Retired in Jan, 2010 at 55
Now it's adventure before dementia
Alan is online now   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 12-08-2014, 12:01 PM   #122
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 20,063
Quote:
Originally Posted by papadad111 View Post
Further you will most likely avoid state income tax when living abroad.
Depends on the State. I've heard ex-pats say that it is really hard to keep California from chasing them for taxes.

I live in Texas and haven't set foot in Louisiana in 5 years but I have a pension paid by my former Louisiana employer, and Louisiana withholds taxes forcing me to file every year to claim the excess back. I pay just under $500/year and I can't see escaping that just because I live in another country. (I've completed the State W4 to minimize withholding, and talked to both my former employee and LA IRS)
__________________

__________________
Retired in Jan, 2010 at 55
Now it's adventure before dementia
Alan is online now   Reply With Quote
Old 12-08-2014, 12:15 PM   #123
Thinks s/he gets paid by the post
 
Join Date: May 2008
Posts: 3,082
Hmm, a shame about Australia taxing people on retirement income from assets held outside of Oz.
__________________
explanade is offline   Reply With Quote
Old 12-08-2014, 12:35 PM   #124
Thinks s/he gets paid by the post
nun's Avatar
 
Join Date: Feb 2006
Posts: 4,792
Quote:
Originally Posted by explanade View Post
Hmm, a shame about Australia taxing people on retirement income from assets held outside of Oz.
Taxation of foreign sourced income by the country you live in is very common. It stems from that country having primary taxation authority over your money. The US does this because of residency or citizenship, almost all other countries do it on the basis of residence. There are sometimes some exclusions that depend on the exact nature of residence or whether you bring the income into the country, but if you are in a country with a tax treaty with the US expect to navigate the cross border tax rules to avoid double taxation.
__________________
“So we beat on, boats against the current, borne back ceaselessly into the past.”

Current AA: 60% Equity Funds / 20% Bonds / 10% Stable Value /5% Cash / 5% TIAA Traditional
Retired Mar 2014 at age 52, target WR: 0.0%,
Income from pension and rent
nun is offline   Reply With Quote
Old 12-08-2014, 12:39 PM   #125
Thinks s/he gets paid by the post
 
Join Date: May 2008
Posts: 3,082
Yeah a lot of European countries offer retirement visas but it sounds like if you wanted to buy a property, the tax laws could be draconian to navigate.

Less headaches staying the max 3 months at a time but it may not be easy to rent housing on favorable terms for only 3 months at a time.
__________________
explanade is offline   Reply With Quote
Old 12-08-2014, 12:48 PM   #126
Thinks s/he gets paid by the post
eta2020's Avatar
 
Join Date: Sep 2013
Posts: 1,248
Quote:
Originally Posted by explanade View Post
Yeah a lot of European countries offer retirement visas but it sounds like if you wanted to buy a property, the tax laws could be draconian to navigate.

Less headaches staying the max 3 months at a time but it may not be easy to rent housing on favorable terms for only 3 months at a time.
I don't think so. No country can join European Union unless they allow free ownership of property.

That means anybody can buy house in any EU country.

Now to get residency you may need to demonstrate some income
__________________
eta2020 is offline   Reply With Quote
Old 12-08-2014, 12:51 PM   #127
Thinks s/he gets paid by the post
eta2020's Avatar
 
Join Date: Sep 2013
Posts: 1,248
Quote:
Originally Posted by nun View Post
Taxation of foreign sourced income by the country you live in is very common. It stems from that country having primary taxation authority over your money. The US does this because of citizenship, almost all other countries do it on the basis of residence. There are sometimes some exclusions that depend on the exact nature of residence or whether you bring the income into the country, but if you are in a country with a tax treaty with the US expect to navigate the cross border tax rules to avoid double taxation.
US is exception to tax based on Citizenship instead of based on Residency. I don't know any other country that does that.

That is one thing I don't like about US Citizenship.
__________________
eta2020 is offline   Reply With Quote
Old 12-08-2014, 12:54 PM   #128
Thinks s/he gets paid by the post
nun's Avatar
 
Join Date: Feb 2006
Posts: 4,792
Quote:
Originally Posted by explanade View Post
Yeah a lot of European countries offer retirement visas but it sounds like if you wanted to buy a property, the tax laws could be draconian to navigate.

Less headaches staying the max 3 months at a time but it may not be easy to rent housing on favorable terms for only 3 months at a time.
Yes the exact nature of residence is crucial.....and of course benefits like health insurance often only come with a type of residence that will demand you pay more tax locally.

Countries like Thailand have visas that exempt a lot of foreign income from taxation, but you still have to pay US taxes and deal with the issues of living in a developing economy. Also, if you have money in US accounts you will have to deal with the increasingly restrictive rules that US investment firms have for foreign residents......it will probably be best to keep a US address in a state with no income tax.
__________________
“So we beat on, boats against the current, borne back ceaselessly into the past.”

Current AA: 60% Equity Funds / 20% Bonds / 10% Stable Value /5% Cash / 5% TIAA Traditional
Retired Mar 2014 at age 52, target WR: 0.0%,
Income from pension and rent
nun is offline   Reply With Quote
Old 12-08-2014, 01:00 PM   #129
Thinks s/he gets paid by the post
eta2020's Avatar
 
Join Date: Sep 2013
Posts: 1,248
Quote:
Originally Posted by nun View Post

Countries like Thailand have visas that exempt a lot of foreign income from taxation, but you still have to pay US taxes and deal with the issues of living in a developing economy.
From travel experience to me it looks like it is no great life to retire in developing country. I would rather stay in US or retire in UK like Alan.

Looks like people do it to save money. But you get what you pay for. Yes we need to pay taxes to have good roads, public safety, street lighting at night etc etc and if I can get good deal in developed country then it really is good deal

No offense to people who like to live in Thailand. I guess it may be adventure for some but is not for me.
__________________
eta2020 is offline   Reply With Quote
Old 12-08-2014, 01:44 PM   #130
Thinks s/he gets paid by the post
 
Join Date: Feb 2013
Posts: 4,890
I put 4K for our taxes because of our businesses and business retirement plan. It was expensive in the U.S. when we used a CPA, and I don't know if we could learn to do our taxes ourselves with the current set up for two different countries.

Between that and paying for Medicare it does make moving less financially attractive than it would seem at fist blush, at least for us if we continue to work part-time. Plus some countries have restrictions on working even if it just lap top type work not really taking a job away from a local.
__________________
daylatedollarshort is offline   Reply With Quote
Old 12-08-2014, 01:52 PM   #131
Thinks s/he gets paid by the post
 
Join Date: Feb 2013
Posts: 4,890
Quote:
Originally Posted by eta2020 View Post
From travel experience to me it looks like it is no great life to retire in developing country. I would rather stay in US or retire in UK like Alan..
There are some EU locations in the Caribbean. Have you considered that as an option?
__________________
daylatedollarshort is offline   Reply With Quote
Old 12-08-2014, 02:11 PM   #132
Moderator
 
Join Date: Oct 2007
Posts: 4,929
Quote:
Originally Posted by eta2020 View Post
US is exception to tax based on Citizenship instead of based on Residency. I don't know any other country that does that.

That is one thing I don't like about US Citizenship.
The USA is in fine company , as Eritrea also collects international taxes based on citizenship. They also use fairly aggressive means to collect such taxes.
__________________
M Paquette is offline   Reply With Quote
Old 12-08-2014, 02:39 PM   #133
Thinks s/he gets paid by the post
 
Join Date: May 2008
Posts: 3,082
OK I just FIRE'd this year so I haven't done taxes without earned income yet.

What do you mean by paying for Medicare? Do you pay Medicare taxes on dividends, interest, cap gains, distributions?
__________________
explanade is offline   Reply With Quote
Old 12-08-2014, 02:45 PM   #134
Thinks s/he gets paid by the post
nun's Avatar
 
Join Date: Feb 2006
Posts: 4,792
Quote:
Originally Posted by explanade View Post
OK I just FIRE'd this year so I haven't done taxes without earned income yet.

What do you mean by paying for Medicare? Do you pay Medicare taxes on dividends, interest, cap gains, distributions?
You don't pay Medicare taxes on the things you mention.....but you do have to choose whether or not to pay Medicare Part B when you reach 65.
__________________
“So we beat on, boats against the current, borne back ceaselessly into the past.”

Current AA: 60% Equity Funds / 20% Bonds / 10% Stable Value /5% Cash / 5% TIAA Traditional
Retired Mar 2014 at age 52, target WR: 0.0%,
Income from pension and rent
nun is offline   Reply With Quote
Old 12-08-2014, 02:58 PM   #135
Thinks s/he gets paid by the post
 
Join Date: May 2008
Posts: 3,082
Medicare Advantage or those supplementary plans?
__________________
explanade is offline   Reply With Quote
Old 12-08-2014, 03:15 PM   #136
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 20,063
Quote:
Originally Posted by explanade View Post
Hmm, a shame about Australia taxing people on retirement income from assets held outside of Oz.
My brother was complaining about this to me this summer when we were staying with them. He is 57 and receiving a private pension from the UK, but is a very high earner and in the top Australian tax bracket (47%?). When I asked him if he could have let the UK pension grow until he retired and was in a much lower bracket, rather than taking it when he did at 55, he said he could have let it grow but wanted to get his hands on it in case anything bad happened. (The UK has the equivalent of PBGC so losing it isn't really a big concern).
__________________
Retired in Jan, 2010 at 55
Now it's adventure before dementia
Alan is online now   Reply With Quote
Old 12-09-2014, 03:18 AM   #137
Thinks s/he gets paid by the post
 
Join Date: Jun 2005
Posts: 1,145
Quote:
Originally Posted by eta2020 View Post
From travel experience to me it looks like it is no great life to retire in developing country. I would rather stay in US or retire in UK like Alan.

Looks like people do it to save money. But you get what you pay for. Yes we need to pay taxes to have good roads, public safety, street lighting at night etc etc and if I can get good deal in developed country then it really is good deal

No offense to people who like to live in Thailand. I guess it may be adventure for some but is not for me.
Having lived in four developing countries, I think I can provide some perspective on this. People retire to developing countries for all sorts of reasons. And one reason many do it is for a lower cost of living but this is just one reason among many. In fact, I count quite a few multi-millionaire friends in my social group here in the Philippines. But I have friends clustered around both ends of the spectrum -- even within the same social group. It is one of the fun things about living abroad.

An American friend is on his way to my place right now -- he is living on around $26,000 per year (retired military) although that will go up to about $34,000 when he turns 62 in a year. And he only has a high school education. I think very highly of him and he is one of the reasons I originally stayed here. Another close friend just flew in this morning, he has a fabulously successful business in the USA that only requires his attention half the year. So he lives here half time, has well over $3 million assets invested and is raking in money from his part-time business. Still, he plans to retire in the next couple of years and just end the business (it's hard to sell). Another close friend was president of two different universities, one in the USA and one in Europe -- and he is a silent partner in some businesses here. But he lives near me in a small-ish rented apartment that has a great location and he completely remodeled. Except for his new SUV, one would never really know that he had that much money. My American neighbor is a chiropractor but his American mom regularly sends him money to keep his young family afloat. I play a regular game of cards every weekend pool-side in the mansion of another friend who lives here full-time.

What I learned early on with living abroad is that there are all types. Some are running or escaping from something back home. Some came for the lower cost of living. Some come for the adventure and to try something different. Some come for a better climate or for beach/island living or to find a younger woman to start another life with. Some come to establish a base for travel. All kinds of reasons -- but definitely not always or even mostly for a lower cost of living.
__________________
kramer is offline   Reply With Quote
Old 12-09-2014, 05:28 AM   #138
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
braumeister's Avatar
 
Join Date: Feb 2010
Posts: 7,349
Quote:
Originally Posted by kramer View Post
Having lived in four developing countries, I think I can provide some perspective on this.
...
All kinds of reasons -- but definitely not always or even mostly for a lower cost of living.
Great summary, kramer.
And perfectly in tune with the American expats I knew when I lived in Brazil.
__________________
braumeister is online now   Reply With Quote
Old 12-09-2014, 06:57 AM   #139
Thinks s/he gets paid by the post
eta2020's Avatar
 
Join Date: Sep 2013
Posts: 1,248
Quote:
Originally Posted by kramer View Post
Some come for a better climate or for beach/island living or to find a younger woman to start another life with.
I like this one
__________________
eta2020 is offline   Reply With Quote
Old 12-09-2014, 08:01 AM   #140
gone traveling
 
Join Date: Oct 2007
Posts: 1,135
Quote:
Originally Posted by braumeister View Post
Great summary, kramer.

And perfectly in tune with the American expats I knew when I lived in Brazil.

+2

Great post Kramer. Consistent with the expats that I've encountered living across 5 developing economies since late 1980's. Most do it for way more than financial reasons. That may be an incremental motivator but most often not the primary reason someone sets out to live in emerging environments in retirement. At least half that I know do it for the sense of adventure and/or desire for younger spouse and re-booting their life.
__________________

__________________
papadad111 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
First year in Retirement garrynky FIRE and Money 4 03-22-2007 03:44 PM
Retirement Accounts and Early Retirement heebygeeby Young Dreamers 9 03-14-2007 03:56 PM
A New Vision of Retirement hocus Young Dreamers 17 02-08-2005 07:29 AM
Great American Retirement Quiz sgeeeee Life after FIRE 0 01-05-2005 12:11 PM
Tax Policy Promotes "Early" Retirement REWahoo FIRE and Money 10 12-19-2004 07:25 PM

 

 
All times are GMT -6. The time now is 08:31 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.