Expats: help with tax/retirement/college strategy

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Expats: help with tax/retirement/college strategy

Post by BeaverFood » Fri Jul 26, 2013 2:31 pm

removed personal information
Last edited by BeaverFood on Mon Apr 07, 2014 7:11 am, edited 1 time in total.

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Re: Expats: help with tax/retirement/college strategy

Post by Karamatsu » Sat Jul 27, 2013 7:52 am

The tax/IRA/529 complications are too much for me but in your situation I don't think I'd be comfortable with a three month emergency fund. It's one thing when you're in your own home in your own country, but being abroad, and with a family... these add extra complications to what might qualify as an "emergency," and you wouldn't want to be caught out. Remember that you might have to leave your host country in a hurry, which could create problems when trying to pull money out of accounts there. It might be good to maintain emergency funds in both countries. Just some ideas!

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Re: Expats: help with tax/retirement/college strategy

Post by dickenjb » Sat Jul 27, 2013 8:05 am

I would hit the 529 accounts hard. They can be thought of as "mini maxi Roth IRA's" as the money goes in after tax but comes out tax free if used for education purposes.

"mini" because it is only tax free growth for 18 years

But Maxi because you can put $28K per year into each, way more than a Roth.

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Re: Expats: help with tax/retirement/college strategy

Post by bpp » Sat Jul 27, 2013 8:14 am

Some questions:

--You say you are expats, and yet you have "residence" in Wisconsin. How does that work? Are you paying WI resident taxes? (And how does that interact with the FEIE?) Where is the home on which your mortgage is held?

--Perhaps most importantly, where do you expect to retire? The US, where you are now, somewhere else?

--These mutual funds you hold in a non-US brokerage, are they SEC-registered mutual funds? If not, are you aware of the PFIC rules?

--Where do you expect your kids to go to college?

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Re: Expats: help with tax/retirement/college strategy

Post by JD » Sat Jul 27, 2013 1:36 pm

BeaverFood wrote:
1. After maxing out his IRA contributions annually, what investment strategy would you suggest we pursue for retirement and/or college savings? Where should our money go next? For what it's worth, we're looking at having about $6,000 each month to work with if we do both TIRA and 529s for both kids.

2. We're having a debate on whether we need more in our emergency fund. Would love thoughts on whether it's sufficient or you'd suggest we should save more there and why.
1. After maxing out IRA, I would suggest that you invest in a taxable account in the USA since you still have a valid state address. You may choose Vanguard, Fidelity or discount brokerage firms to invest your money with and you may want to stay away if possible from foreign brokerage firms for various reasons such as high costs, less options, flexibility, etc.

We investigated 529s for our kids when residing abroad but decided not to invest in them, we put our money in a taxable low cost account in the US. Your circumstances may differ.

2. I believe 6 months are the standard but other may offer a better answer to this question.

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