Ryan’s Retirement Rules: Taxes while living outside the US

Today on Ryan’s retirement rules, Ryan explains how people get taxed on their assets when they live abroad.  Many of Ryan’s clients over the years have relocated to foreign countries for their retirement.  Some move out of the US because they are looking to enjoy a more comfortable climate.  Others are looking for a lower cost of living.  And some are going back to countries that they were originally from.  Regardless of why these clients decide to live outside of The States, they all face unique tax consequences because of their location.  Unfortunately, just because you do not live in the United States does not mean that you are not subject to United States taxes. Many clients ask Ryan If it is still necessary to pay taxes on their assets that are held in United States since they no longer live here. Ryan must break the difficult news and let them know that they are still subject to US taxes.

Do I have to pay taxes on assets held inside of the US, if I live abroad?

  • Yes, you still must pay taxes on assets held within the US regardless of where you live.
  • Whether or not you’re a US citizen, it wont impact your taxable liability.
  • Many people relocate outside of the US in retirement for nice weather, cheaper cost of living, and various other reasons.

Is it possible to avoid paying taxes on my money?

  • The short answer is NO.  You will pay taxes, and especially on funds held within a qualified retirement plan.
  • There are strategies that can reduce taxes, but it’s extremely unlikely that you could avoid paying taxes all together.
  • There are specific strategies, tools, and products that can be used to reduce taxes.

What advice does Ryan have for people looking to decrease their tax liability in retirement?

  • Make sure that you work with an accountant or CPA that can show you different strategies to reduce taxes and avoid breaking any laws.
  • Make sure that your tax specialist is working with your advisor to coordinate the best overall plan for you.
  • Run simulations on any “conversion” strategy to see what will happen if taxes change in the future.