Moving abroad is a big financial and lifestyle commitment. Planning ahead for relocation costs, taxes, visas and potentially overseas retirement can help you make sure that everything runs smoothly when it’s time to fly away.
Is relocating abroad right for me?
Before deciding to move abroad, it’s a good idea to visit the place you plan to live to make sure you like it as much in person as you do in pictures. Consider spending a few weeks there, and take classes if you don’t speak the local language.
You’ll also need to make sure you’re financially stable enough to handle any snags that might come up when moving overseas. Consider consulting a financial planner or accountant to set a budget for the move, monthly living costs and emergency expenses.
It’s also a good idea to learn about what taxes you’ll be expected to pay in both the US and your new country of residence before deciding to relocate.
What upfront costs should I budget for?
Upfront costs will vary greatly depending on where you’re moving to and your personal situation. Costs to consider include:
Rental deposit or home down payment
Buying a car
Decorating your new home
Daily living expenses if you need a new job
Documentation and permissions
Passports and visas when relocating abroad
Before making your international move, you’ll need to first secure a passport and a visa — or possibly more than one.
US citizens must carry and present their passport when leaving and entering the US. Note that it can be difficult to travel if your passport expires in less than 6 months, and it’s more difficult to renew when you’re overseas. If you need to apply for a new passport or renew your current one, do this early on in the process. It takes the government approximately 6 weeks to process your passport request.
You’ll need to obtain a visa from the country that you intend to move to. Keep in mind that a visa that allows you to take up residence in that country doesn’t necessarily grant you permission to work in the country, so it’s important to explore the rules and requirements for the country that you wish to relocate to. Your pets also need to have proper documentation.
Why you should register your travel
STEP: The Smart Traveler Enrollment Program
The US government encourages its citizens to register with its STEP service when traveling or moving abroad. It allows US citizens to enroll with the nearest US embassy or consulate. With STEP you will:
Receive safety and security information for your destination country.
Provide the US embassy with the info they need to contact you in case of an emergency, such as a natural disaster, civil unrest of a family emergency.
Receive security and emergency updates from the US embassy, as well as travel warnings and alerts.
Citizenship/nationality and your rights and obligations
US citizens are only permitted to hold dual nationality if it is granted automatically through the laws of a different country. For example, if a US citizen couple gives birth to a child while abroad and that country automatically grants that child nationality, that baby would hold dual nationality for the US and the foreign country. If a US citizen acquires a second nationality through marriage, dual nationality may also be possible.
However, the U.S. does not permit dual nationality if it is acquired by choice. This means that if you apply to be a citizen of a foreign country, you’ll likely lose your US citizenship.
Moving overseas and voting
If you do not intend to relinquish your US citizenship when you move to another country, you can continue to participate in elections by voting with an absentee ballot.
Almost all citizens 18 years or older who reside outside the United States are eligible to vote absentee for candidates for federal offices in US primary and general elections. In addition, some states allow overseas citizens to vote for candidates for state and local offices, as well as for state and local referendums. Check with your state for specifics.
Paying taxes when you move abroad
All US citizens and resident aliens must file a tax return, whether they are living in the United States or in another country. Your income is subject to US income tax no matter where you are living. You can file your tax return electronically or through the mail.
Unfortunately, you will also be required to file income taxes in your new country of residence. But keep in mind that although the requirement to file your taxes is the same no matter where you live, the amount that you pay could be very different. You may be eligible for the foreign earned income exclusion and/or the foreign tax credit to reduce the amount you owe in the US. Learn more about it from the IRS.
Your Social Security benefits
If you plan on retiring abroad, whether permanently or temporarily, you will most likely be able to receive Social Security benefits. It all depends on which country you will be retiring to. Use the Social Security Administration’s Payments Abroad Screening Tool to find out if your country of choice is included in the list.
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Some health insurance providers will cover medical care while living and traveling overseas. But many do not. Contact your health insurance provider to find out if you are covered in another country, and exactly what the coverage entails.
If your health insurance does not offer you coverage while abroad, there are many US-based and international providers from which you can purchase health insurance
Medicaid and Medicare
Neither Medicaid nor Medicare is available to US citizens living overseas. These programs only cover medical costs within the US.
As with health insurance, your policy may transfer with you when you relocate. You may only need to provide your insurer with a change of address. Be sure to check with your provider to confirm that you will receive the same coverage and benefits. If your provider does not cover you while living in another country, there are plenty of life insurance companies that offer coverage. Search around for the best quote.
Moving abroad requires a lot of planning, but getting everything lined up in advance can help make sure things run smoothly when it’s time to head to your new home. To get started, consult a professional to go over your finances, research visas and tax laws for the country you’re planning to move to and compare money transfer companies to help move your finances to an overseas account.
Frequently asked questions
Before you leave the US, it’s a great idea to contact your real estate agent and ask them for a reference. This reference can explain how you always paid your rent on time, kept the property in excellent condition and were generally an excellent tenant. A solid recommendation, even from a real estate agent on the other side of the world, can bolster your tenancy chances.
When you leave the US to live in a different country, it’s natural to feel disoriented, overwhelmed, lonely and confused when you try to adapt to a new culture. If you stay overseas long enough, you could experience similar feelings of homesickness when you return to America.
The cost involved in shipping items overseas can be a great motivator to help you decide what you really need to take with you and what can be left behind. Be ruthless with your culling and leave as many bulky items behind as possible — it will save you a sizable amount of money.
You’ll need to get in touch with your provider to diagnose the problem. Sometimes an account may have been closed due to inactivity. If calling your provider is not an option, in most cases they will provide an online inquiry form on their website.
It depends. You’re technically eligible to get a credit card if you’re on a temporary or working visa in most countries. But your US credit score might not mean much, so you may need to prove that you’re responsible with your finances in your new country of residence before you’re approved.
Most banks will let you open a bank account before you arrive in the country. You can approach an international bank such as HSBC or Citibank to open an account issued by the country that you’re traveling to. This can be done over the phone or visiting your local branch.
Kelly Waggoner is the US editor-in-chief at Finder. She's worked with publishers, magazines and nonprofits throughout New York City, including ghostwriting a how-to on copyediting for the Dummies series. Between projects, she toys with words, flips through style guides and fantasizes about the serial comma's world domination.
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