What to Know Before You Pack Your Bags & Move Abroad

Marguerita Cheng, CEO of Blue Ocean Global Wealth, shared that more of her clients are thinking about moving abroad due to a number of factors. Those include the current political climate in the U.S. and the rising cost of living. 

As an advisor, she focuses on understanding clients’ motivations for a potential move. She also makes sure they’ve thought through the major transition.

“If people are comfortable traveling and they have a history of traveling [to that country], it may be appropriate,” Cheng said. “It’s a matter of making sure that people are thinking through this. Have you only been there once, or during one season? There’s a difference between being somewhere for your vacation and retiring there.” 

“If a person is just frustrated by the results of the election, and they want to move to Costa Rica, they may want to visit there,” Cheng said. She added that individuals need to research what their lifestyle in that location will look like long-term. 

A recent survey of 2,000 Americans by Talker Research found that 17% of respondents would like to move outside of the U.S. in the next five years. The survey also found that 2% of respondents had already begun the process of relocating to another country within the next five years. 

Individuals planning to move abroad need to consider the support system they’ll have after moving. They also need to consider whether they can speak the language. Other factors they need to mull include their access to critical resources. Those include healthcare and banking and investment accounts, Cheng noted. 

“In Bali, there’s Bali International Hospital where you can get healthcare. There are direct flights there every day. If you need medical care, lots of people speak English. However, compared to the rest of Indonesia, it might be very expensive,” she said.

“Especially if you’re planning to retire there, you also want to think about healthcare [and your] access to it,” Cheng added. 

Individuals who won’t have family or friends in the place they’re moving to should consider if there will be a community of people there who are retired (if they are at retirement age), according to Cheng. Regardless of age, if one doesn’t speak the language, they’ll also need to consider if their social life will be limited to a closed group of English-speaking expats, she noted. 

“Some areas are going to be a little bit easier, because people [from the U.S.] have been going there for a long time and they have the infrastructure to support that,” Cheng said. This might include daily direct flights to one’s native country, should they need to reach family or vice versa. 

H. Jude Boudreaux, a New Orleans-based senior financial planner at The Planning Center, said those moving abroad need to think about what their tax and citizenship status will be.

“I think the first thing to remember is that, no matter where you are, as a U.S. citizen, you will pay U.S. taxes,” Boudreaux said. “The U.S. government will tax all of your income,” 

“If your income is from the U.S., the chances are most likely that where you are going may not care [or tax that income],” he noted.

“Most countries don’t care about income that comes from outside of their borders. If you plan to open a business in that country, however, you will be taxed on that income [by that country] as well as the taxes you pay on your U.S. income,” Boudreaux added.  He noted that the situation is nuanced. And that it depends on where the individual is moving and what they plan to do for work. 

For people relocating to another country permanently, Boudreaux recommends they get estate planning documents drawn up relatively soon upon arriving. 

“If you have minor children, especially, you need to think about your estate planning for those children,” he said. “Not to mention guardianship, [which would establish] who would be the temporary guardian of those children, [if something were to happen to you].” 

“It’s not something you want to deal with in two years. [You’d want to get your estate planning done] probably within 3 to 6 months [of moving],” Boudreaux said. “It’s in your best interest to have a consultation with an estate person, so you can be clear on how those rules [in both countries] will play together.” 

Cheng shared that expats will need to think about their ability to access their money. That includes any investment and retirement funds. 

“Once you permanently move, the first thing you need to think about is the ability to maintain your U.S. accounts. If they are investment accounts, you need to check with the custodian of your retirement or investment account. If you go overseas, some retirement or investment account providers will want a U.S. address — they may not want a P.O. box but a physical address,” Cheng explained. 

“Also, how are you going to transfer money? For people who have a golden visa, they need to make sure [the money being] deposited into a U.S. bank account can be transferred internationally,” Cheng said. 

Many countries have golden visa programs. These generally allow individuals to gain certain residence or legal rights if they provide a certain level of economic contribution to the country. Portugal, Greece, and Italy have popular golden visa programs. Many Americans have applied for these programs so they can gain access to certain business opportunities and healthcare and tax resources in those countries. 

“I have a few clients that have a Portuguese golden visa,”  Boudreaux said, noting that the program has changed in recent years, raising the minimum bar for investments to €500,000 via a qualifying Portuguese Investment Fund.

“Previously, you could invest about €350,000 into real estate and get a golden visa,” he said. 

“You didn’t have to be in Portugal a lot to use it. They wanted you to be there a minimum of one week out of the year. In 2023, they passed new rules. Those investments have different tax consequences now,” Boudreaux said. 

Individuals can also look into getting digital nomad visas, Cheng said. They are currently offered in more than 50 countries around the world. They give travelers legal rights to work remotely in a place that isn’t their country of permanent residence. 

“For people who aren’t retired yet, definitely try the digital nomad visa. A lot of the people who are content creators or part of the gig economy can work wherever they want,” Cheng said. 

A digital nomad visa may also be beneficial for someone who has visited a place briefly, to get a better idea of whether they’d want to live there permanently, Cheng explained. 

“Maybe try to be a digital nomad first to see if you really like it, before you pack up your bags and go all in,” Cheng said.

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