Life, financial and retirement planning for U.S. citizens abroad
If you want to remain a U.S. citizen and live outside the U.S., effective life and retirement planning will be much harder for you than for your non-U.S. neighbors.
As a U.S. person, you have three objectives:
1. Ensuring that you do NOT invest in financial products that will cause you U.S. tax problems (your U.S. citizenship will disable you from most things);
2. Ensuring that your financial objectives can be met.
3. Ensuring that the tax and overall compliance burdens of U.S. citizenship do not unduly impair the quality of your life.
U.S. citizens are just not like other people. Those who choose to live outside the U.S. must live subject to a large number of disabilities. If you keep your investments outside the U.S., the associated reporting requirements will make your life pure hell. The following video does a good job explaining why it may make sense for you to keep your investments in the U.S. The point is that you now longer have “offshore accounts”, “foreign trusts”, “PFICs” and the like. This will be easier for those who are living outside the U.S. on a temporary basis. Note that U.S. tax laws operate as a form of “capital control” – keeping money inside the U.S.
Bottom line: Financial planning for U.S. citizens is different.
The “Land of the free” allows you much less freedom than your neighbours have!