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Old 02-07-2015, 10:26 PM   #21
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Agreed, you seem to have some misconceptions LARS. The biggest hurdle would be getting residency, not healthcare. Nor do you have to renounce US citizenship anymore. The US gave up on that decades ago.

Having lived in the UK, for me there are two main negatives. The culture and by that I mean all that is negative in the culture, along with the weather. There's a very common saying in some parts of the UK, 'If we just got the weather', meaning somewhere might be very beautiful, scenic, etc. 'if we.............
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Old 02-07-2015, 10:30 PM   #22
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Paying taxes is a key question though.

I used to be enthusiastic about some of the EU countries offering retirement visas.

But there are horror stories about the bureaucracy of buying property. So for the taxes you'd pay, would the value of the benefits you'd get be worth more than paying for health care in the US?

I may try a long-term rental in one of these countries. Probably overpay because I wouldn't have to deal with getting bank accounts and utilities under my name, so it would basically be a vacation rental of some kind.

The temptation though would be to travel instead of "living" in one place for up to 3 months.
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Old 02-07-2015, 11:01 PM   #23
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I've spent long stretches (6+ mos) overseas and could easily end up expatriating at some point.

But one thing I marvel at is mono-lingual North Americans' willingness to buy property in non-English speaking countries. That means you're signing contracts you can't read under legal systems you very possibly don't understand.

They say find a good lawyer, but personally I wouldn't be comfortable unless he were my brother.

So for me it would be rent, rent, rent.
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Old 02-08-2015, 12:26 AM   #24
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I don't know about Ireland but if you are a tax paying resident you get full access to national health in the UK. No need to renounce US citizenship or become a UK citizen.

Am I entitled to NHS treatment when I move to England? - Health questions - NHS Choices
There's still no need to be paying tax to get NHS treatment....you just have to be resident.
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Old 02-08-2015, 12:32 AM   #25
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Paying taxes is a key question though.

I used to be enthusiastic about some of the EU countries offering retirement visas.
The big downsides for US citizens living overseas are investments and taxes.
US citizens are always taxed by the IRS on their worldwide income and if you live overseas you'll have to comply with local tax rules. Those might be minimal on a retirement visa in places like Thailand, but in European countries you will quickly have to learn about tax treaties, local laws and foreign tax credits.

Also investing and managing money locally will be complicated by FATCA and IRS regulations making many foreign investments complex and tax inefficient. The final issue will be restrictions imposed by US financial firms when dealing with people living outside the US.

The US expat retiree is also often paying for healthcare twice, once for Medicare and a second time for local insurance or out of pocket expenses.

Preparation and a good understanding of where you will be living are vital to success.
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Old 02-08-2015, 01:19 AM   #26
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This. I will, from time to time, think about moving to England or Ireland. Every time I do contemplate such a move, the obstacle of health insurance as you age seems to be a fairly high hurdle.

If you qualify for residency (thru investor exemptions) I assume that after getting residency status you can access national health, but I am not certain. Plus, it would mean having to renounce US citizenship.

So in the end spending twilight years abroad seem to be more of a pipe dream for me...
People who retire to Ireland are entitled to public health services on the basis of residency and means, irrespective of their citizenship. Private health services must be paid for directly or through private insurance, by all Irish residents, irrespective of citizenship. There would be no reason to renounce your US citizenship; in fact, you would need it until you were eligible to become an Irish citizen. Ireland allows dual citizenship and has a tax treaty with the U.S. Be aware that the cost of living in Ireland is quite high.

Entitlement to health services is primarily based on residency and means, rather than on your payment of tax or pay-related social insurance (PRSI). Any person, regardless of nationality, who is accepted by the Health Service Executive (HSE) as being ordinarily resident in Ireland is entitled to either full eligibility (Category 1; medical card holders) or limited eligibility (Category 2) for health services.


Entitlement to health services

Retiring to Ireland

http://www.citizensinformation.ie/en...alisation.html
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Old 02-08-2015, 09:15 AM   #27
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Good info on health insurance. Thank you all. Will delve deeper into it.
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Old 02-08-2015, 09:23 AM   #28
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Good info on health insurance. Thank you all. Will delve deeper into it.
In the UK you just have to be resident to get full access to the NHS. There is not requirement to renounce US citizenship and the US won't let you do that until you have another citizenship. However, the number of US expats renouncing has increased recently because of the local investment restrictions and tax complications caused by FATCA and greater IRS enforcement.
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Old 02-08-2015, 10:28 AM   #29
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I may try a long-term rental in one of these countries. Probably overpay because I wouldn't have to deal with getting bank accounts and utilities under my name, so it would basically be a vacation rental of some kind.

The temptation though would be to travel instead of "living" in one place for up to 3 months.
We've done both and loved it.

In 2013 we went to England in April for a wedding in the NE, then set off on our own. Stayed in a farmhouse doing B&B in Northumberland just off the Roman wall for a few days then rented an apartment in Yorkshire for a week and climbed the 3 peaks. Then to Ireland for 2 rented houses, staying 2 weeks in Donegal, and 2 weeks in Connemara. Then to Cornwall to a rented apartment for 2 weeks, then France for 2 different weeks in rented houses, then back to England for a week in a rented cottage on a farm on top of the cliffs near Dover. We finished the vacation with a 2 week cruise out of Edinburgh to Iceland and Norway.

Among the things we did last year was a 2 week rental of an apartment near Melbourne, a week in a B&B near Sydney and a month long rental of a condo near to Hobart, Tasmania. (no car needed in any of those places because of great public transportation).
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Old 02-08-2015, 10:47 AM   #30
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There comes a point in a discussion such as this where you move from questions you can reasonably expect to get answers to, to questions and topics that require an expert. Taxes is one of those subjects.

People may give well intentioned answers and still get it wrong. There are simply too many factors that can apply to any given individual. General answers may not be applicable to that individual.

For example, the IRS taxes Americans on their world wide income. Generally true but only if you are 'deemed to be resident for tax purposes'. I'm not an expert on the USA tax system but I can tell you that Canada also taxes anyone 'deemed to be resident for tax purposes'. I took me 3 years aftre leaving Canada to become, 'non-resident'.

Yes an individual might find themselves being taxed in two countries and yes an individual might find themselves paying for healthcare in two countries. Or they might not.

Once I became non-resident in Canada, I spent the next 15+ years paying no income tax in any country and also being eligible for free healthcare in the the 3 countries I lived in during those years.

Only after I returned to Canada and started collecting a government pension did I start filing income tax returns again. I had to, they knew they were paying me money. ;-)

Obviously, the financial aspects of 'should you retire overseas' are important but I think it is possible to discuss all the other aspects first and ONLY if you are getting to the point of saying, 'yes, I'm really interested in doing it', move on to the details where you will need to consult an expert. Like a tax accountant familiar with expat situations.
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Old 02-08-2015, 11:07 AM   #31
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T.

For example, the IRS taxes Americans on their world wide income. Generally true but only if you are 'deemed to be resident for tax purposes'.
US taxes on both residency and citizenship....therefore all US citizens must pay US tax on their worldwide income wherever they live. The only way for a US citizen to get out of the responsibility to pay US tax on their worldwide income is to renounce US citizenship.

Quote:
Yes an individual might find themselves being taxed in two countries and yes an individual might find themselves paying for healthcare in two countries. Or they might not.
A US citizen who is tax resident in another country will be liable to tax in the US and that other country so must reconcile two tax regimes. Double taxations is rare because of tax treaties, but the paperwork and intellectual burden can be considerable. It's not so bad if you you retire to somewhere like Thailand that has simple tax laws for people on retirement visas, but if you retire to any European country expect taxes compliance to require considerable time and effort.

The double charge for healthcare is again applicable to Americans who are on Medicare as if they opt out and then decide to return to the US their Medicare premiums are increased by 10% for every year they did not pay them. So many Americans choose to pay Medicare even though it does not cover them overseas.

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Once I became non-resident in Canada, I spent the next 15+ years paying no income tax in any country and also being eligible for free healthcare in the the 3 countries I lived in during those years.

Only after I returned to Canada and started collecting a government pension did I start filing income tax returns again. I had to, they knew they were paying me money. ;-)

Obviously, the financial aspects of 'should you retire overseas' are important but I think it is possible to discuss all the other aspects first and ONLY if you are getting to the point of saying, 'yes, I'm really interested in doing it', move on to the details where you will need to consult an expert. Like a tax accountant familiar with expat situations.
If you are not a US citizen it's quite easy to cut tax ties with a country. I'm British and in my 53 years I've never paid a penny in UK income tax. IMHO it's great to dream about retiring overseas, but doing it as an American requires far more financial planning than any other nationality because of how they are taxed, so they need to think about that more are earlier.
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Old 02-08-2015, 11:26 AM   #32
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Explanade, regarding long-term rentals, I have done that quite a few times in various places. I moved from living overseas to having a base in Canada and 'sojourning' (hence my handle for posting here) when and where we feel like it.

It is a separate topic from 'should you retire overseas' but obviously can be an alternative. It's fairly common for Canadians to live in Canada and spend winters in Florida for example. That's no different really than someone who maintains a base somewhere and then spends 3 months or more in another country and next year in yet another country etc.

I've found a few things worth keeping in mind when doing that. One is in season vs. out of season. You can decide you want to escape a cold winter and not necessarily need beach weather where you go, just milder weather than at home. That opens up the possibility of out of season locations. For example, you can rent a small studio apartment on a Greek island for 3 months out of season for perhaps half of what you would pay in season. Temperatures will not go down to freezing, it could be 70F on Xmas day or it could be pouring rain and 55F. But it will be better than at home.

Popular tourist destinations always have lots of rental possibilities that non-tourist destinations do not have. Looking for a 3 month rental in a 'normal' town in France might be difficult but finding one in Chamonix (year round tourist destination) will not.

When you say, "The temptation though would be to travel instead of "living" in one place for up to 3 months.", the primary factor is cost. It costs far less to live somewhere than to move from place to place. Alan for example describes some 'slow travel' over a period of around 3 months. Sounds like a great trip but the cost will have been a lot more than if they had stayed in one place for 3 months. I'd guess at least double. So the temptation depends on budget available.

For example, here is a place in the southern California desert where we have stayed for a longer term, twice, in season which are the winter months. (Not this exact unit but the same)The first time for 1 month and the second time for 2 months. If you put in May 1 for a month you will see they will rent it for $76 a night. If you put in May 1 for 3 nights they want $135 per night. Almost double.
Borrego Springs Vacation Rental - VRBO 410598 - 2 BR Deserts Condo in CA, Rams Hill Condo Casita 2 BR Renovated Condo Desert View# In fact, we negotiated with the owner for $2000 per month for 2 months which is $66 per night. The first time, there was some construction going on nearby and we were able to get it for $1500 for a month. That's only $50 per night. It could have as easily been somewhere in Europe or the Caribbean or wherever.
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Old 02-08-2015, 11:43 AM   #33
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I'm in London, I'll always keep my London property as my base. Yes the weather here is generally crap but it is a great location for world travel, you can get great deals travelling from London. Don't think I'd ever move abroad permanently, would much prefer to take extended trips abroad for say 3 months at a time especially during the winter time. There is no real benefit in owning property abroad, only risk IMO.
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Old 02-08-2015, 11:46 AM   #34
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When you say, "The temptation though would be to travel instead of "living" in one place for up to 3 months.", the primary factor is cost. It costs far less to live somewhere than to move from place to place. Alan for example describes some 'slow travel' over a period of around 3 months. Sounds like a great trip but the cost will have been a lot more than if they had stayed in one place for 3 months. I'd guess at least double. So the temptation depends on budget available.
Living in a place for 3 months is an option I would advise before moving there permanently, and that applies to somewhere else in the USA let alone abroad. Yes, it is an expensive trip but could save a load of money if you discover that the location really is not for you.

My wife and I are British by birth and once retired we seriously considered moving back to the UK, but we didn't know how it would be after all these years (28 years living in the USA). In 2011 we rented a house for 7 months in the town we would move back to, an unfurnished house, and furnished it ourselves mostly from charity shops. We didn't rent a car except on rare occasions so that we could see how we would manage with public transportation. I also kept a detailed budget so we would know the costs.

I can confirm Nun's comments above about the USA taxing its citizens regardless of where they live (Eritrea is the only other country in the world to do so). It is very well documented, and I have had estimates provided from a US/UK certified tax firm to do our taxes for the first year or 2 of a move.

Our experimental move proved to us that we do want to move back to the UK and over this last few years I have been adjusting our finances to minimize the tax hit once we start paying UK taxes and filing US taxes, applying UK credits for taxes paid against US taxes due. (we plan to move back next year)
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Old 02-08-2015, 11:49 AM   #35
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Sojourning: I re-read my co-worker's obituary. He retired in 1999 (or 2000) at the peak of the dotcom bubble at the age of 58 (or 59), which was VERY early for his career (tenured professor, every other ones retired after 70). The obituary says he was survived by his Thailand partner ***, and his brothers and sisters, no mentioning of any ex-wife or children. In his almost 15 years of retirement, he spent about half of his time in Thailand and half in the U.S. and traveled around the world.

When I was interviewed here in 1998, he was the only one person who did not talk to me about technical stuffs. He told me to get all possible airline miles and hotel points. When I told him that I might take different airlines and stay at different hotels, he told me to join all frequent flyer and hotel reward programs. I felt very strange at that time. But now, I consider him a great example of FIRE.

By the way, I had some personal opinion about his Thai partner. In my opinion, my co-worker was a handsome man even in his late 50s, his partner did not "match" him. But, that is just my opinion. He was very happy, that counts.
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Old 02-08-2015, 12:02 PM   #36
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Nun, as I wrote, I think it is possible to discuss all the other aspects first and ONLY if you are getting to the point of saying, 'yes, I'm really interested in doing it', move on to the details where you will need to consult an expert. Like a tax accountant familiar with expat situations.

As I also wrote, well intentioned answers may still be wrong. You wrote, "therefore all US citizens must pay US tax on their worldwide income wherever they live. The only way for a US citizen to get out of the responsibility to pay US tax on their worldwide income is to renounce US citizenship." That is simply not true. Or at least is too simple. They have to declare income but it does not mean they must pay tax to the USA.

A US citizen can for example apply for the 'Foreign earned income exclusion' and if their income is under 80k per year worldwide while living abroad, will pay no US income tax and will not have to give up US citizenship. In fact, they can even maintain a home in the US while doing that. Something I could not do in Canada. Here is an explanation.
Tax on Foreign Earned Income for US Citizens | Serbinski Accounting Firms

What they would have to do though is derive their income outside of the USA as it is 'foreign earned income' that the exclusion applies to. I have met US citizens living abroad who paid no income tax in the USA and did not renounce their citizenship.

Alan, I always advise living in a place for 1 to 2 years before deciding if you are likely to 'stick' or not. Three months is still well within the 'honeymoon period'.
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Old 02-08-2015, 12:25 PM   #37
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For those bloggers "retired" in Thailand, they withdraw cash from ATM to pay their bills. I do not remember any of them mentioned paying taxes in Thailand.
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Old 02-08-2015, 12:54 PM   #38
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As I also wrote, well intentioned answers may still be wrong. You wrote, "therefore all US citizens must pay US tax on their worldwide income wherever they live. The only way for a US citizen to get out of the responsibility to pay US tax on their worldwide income is to renounce US citizenship." That is simply not true. Or at least is too simple. They have to declare income but it does not mean they must pay tax to the USA.
Obviously DTAs and things like FEIE and FTCs can be used to defray US tax. But the US citizen will always be liable to US tax on their worldwide income and will have to file 1040s etc unless they are below the income filing threshold. I was addressing the comment in which you stated that

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T.

For example, the IRS taxes Americans on their world wide income. Generally true but only if you are 'deemed to be resident for tax purposes'.
This is incorrect as residency is not a factor in determining how the US taxes its citizens.

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What they would have to do though is derive their income outside of the USA as it is 'foreign earned income' that the exclusion applies to. I have met US citizens living abroad who paid no income tax in the USA and did not renounce their citizenship.
Paying no US tax is quite common for US expats.....however the requirement to file and comply with US tax law remains. The burden that falls on a US expat is rarely financial, it's usually more in paperwork and restrictions on the foreign financial services they can use and limitations on how they can manage their US accounts from overseas.

For US citizens these are very important considerations and should not be minimized as the US citizen is n a uniquely disadvantaged situation when living outside the USA. They are not unsurmountable barriers to retiring abroad, but the must be considered along with the visas, sea, sun and lifestyle.
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Old 02-08-2015, 12:56 PM   #39
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For those bloggers "retired" in Thailand, they withdraw cash from ATM to pay their bills. I do not remember any of them mentioned paying taxes in Thailand.
They only have to pay Thai tax if the had income earned in Thailand. It's a popular retirement destination because there's no tax on foreign pensions. That would not be the case in many countries.....certainly not the UK.
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Old 02-08-2015, 01:19 PM   #40
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First, wonderful observations being made. Certainly much appreciated by me.

Honestly, as I have thought about it over the years the conclusion I have come to as a Yank, married to a Yank, is that moving permanent overseas is a pipe dream.

What we are aiming for now is to sell big house. Buy a townhome that can easily be closed up for 3 to 4 months at a time and then rent in foreign destinations for extended periods (but no more than 4 months realistically at a crack).

In this scenario, what is the collective opinion on how to handle healthcare while abroad? Currently not on Medicare, but ACA...
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