What is fraught with moving from the USA to another country after retirement - ForumDaily
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What is the risk of moving from the USA to another country after retirement?

In the summer of 2012, Brad Johnson and his wife joined thousands of Americans who decided to move abroad after retirement.

Фото: Depositphotos

They rented out their home in Phoenix, Arizona, got a six-month tourist visa to Mexico, which they expected to renew indefinitely, packed their two cars and headed south to Puerto Vallarta, he writes. Time.

The Johnsons traveled to Mexico before and were happy to have the opportunity to settle in the place they liked, but with a lower cost of living than in the United States. This solution allowed them to stretch their savings for a longer period.

More and more American retirees choose life abroad: as of August, around 680, 000 beneficiaries received pension payments at foreign addresses. However, many of those who moved after some time decide to return back to the United States, as happened in the case of the Johnsons.

Less than two and a half years after moving to Mexico, the couple returned to the US, living between Phoenix and Stockton (California), because Brad Johnson's 90-year-old mother-in-law needed their help.

Four years after their return to the United States, they have more reasons to stay in their home country, including two grandchildren. This changed the Johnsons' retirement plans.

“We had a lot of things planned, but it didn't work out for my wife, who knew her mom needed help in Stockton,” Johnson said.

Despite the huge amount of advice for retirees who decide to go abroad, there is very little information on how to act if you had to return, and a backup plan for this case should be prepared before departure.

According to David Kuenzla, the founding partner of Thun Financial Partners’s financial counseling company, many retirees do not plan their return when leaving, which is a mistake, because what has been right for you in 60 or 70 years can be completely inconvenient in 80 or 90 years. Over time, retired people who have relocated face health problems and return to the US for treatment or decide that they want to be closer to friends and family in the last years of their lives.

Johnsons are lucky. Despite the fact that they did not prepare any plans for return, the circumstances were such that they could return without any special financial losses. They left for only two years, and during this period they did not dare to sell their house in Phoenix. They returned every six months to renew their Mexican tourist visas and, therefore, retained their social connections in the United States. Moving back might have spoiled their dreams of retirement in Mexico, but did not become a financial disaster.

Don't forget about "Uncle Sam"

Some other families were much less fortunate. Late enrollment fees for Medicare are one potential financial threat to repatriates. For example, you move to Costa Rica at age 65 with the intention of living there for the rest of your life, so you don't sign up for Medicare. But later you move back - perhaps you are widowed and don't want to live alone in a foreign country, or perhaps you need medical services that you cannot get in another country - and then when you sign up for Medicare Part B, which covers outpatient services, you will have to pay a 10% penalty for each year you miss after retirement for the rest of your life.

Many financial advisors recommend enrolling in Medicare for 65 years, even if you plan to move abroad, and support this insurance just in case. This was not a problem for the Johnsons, as they have separate medical insurance for retirees, which they received through the work of Yvonne in the federal government.

Also, do not forget about your tax liabilities. Wherever you are in the world, you will have to file an annual tax return with the IRS, documenting all your income in any part of the world: your pension payments, investment income and any income you get if you work in another country.

There are special benefits for people working abroad: you do not have to pay tax on the first 104 100 dollars earned in another country.

Also do not forget about state taxes.

Don't burn bridges

You shouldn’t make hasty decisions—you don’t need to immediately sell your house in the United States after moving and immediately buy a new one in another country.

Selling a home in another country, if you decide to move, may be fraught with many problems that you do not know about, and this process may not be quick. Therefore it is worth living the first few years abroad, renting housing.

Your finances are also worth keeping in American banks, it will greatly simplify the situation if you decide to go back.

In addition, there are cultural and psychological problems that you may encounter upon returning to the United States from another country. Life may seem completely different to you, as staying in another country may have changed your attitudes and needs. It will affect everything: from the house in which you live to your interaction with your former social circle. Therefore, when returning you need to be ready for this.

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