Investment Planning [Germany ex-pat in US]

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Investment Planning [Germany ex-pat in US]

Post by Morgi87 » Mon Apr 08, 2019 9:38 am

Hi Team Boglehead,

I came along this forum just recently a few month ago and I'm very grateful to have it as a source for our financial planning. Since my family and I have a bit of a unique situation, I decided to bring up our case and ask for some more advice directly here in the forum.

Here are some facts to our situation:

Our family consists of my wife (31), myself (32), our son Neo (18month) and our 2.son to be born in June. We are living in NYC for since 2015.
My wife is an American Citizen (originally from Bulgaria), I am a Green Card Holder with German citizenship.
I am running my own business and my wife is supporting me, while we are taking care of our two chilren.
End of last year, I have opened an individual 401k's, roth 401k's and roth IRA's for our business and opened accounts for my wife and myself. F

My original idea was to max out all potential retirement investment options based on Bogle's investment strategy. Our accounts are with TD Ameritrade, so our portfolio is built with the offered fee free etf funds and bonds: SPTM, SPTW, SPAB, SPEM.

After maxing out the retirement accounts, the plan is to either invest more money into an investment account, maybe an UGMA for our children, and putting money aside for a potential house purchase.

Here is the dilemma in my thought process:

We are very uncertain about where we want to be in 5, 10 years or in our retirement at this point. Potentially, we would like to see our children grow up in Germany to some degree and with that move in the next 5-10 years. On the other hand, if my work continues to go well, and we are building everything around here in NYC, it will also be hard to leave everything behind and start from Scratch again.

However, one of my thoughts would be to build financial freedom through the next 10years, move with that asset to Germany and then rebuild a similar busines without much financial pressure (+ having the benefits of our educational and health system in Germany). In that particular case, it would be probably a bad idea to continue putting money into retirement accounts. At the same time, if that idea/plan doesn't work out, we lose all the tax benefits of the retirement accounts in iterim.
I also thought through the scenario of splitting investment money into retirement acc's and normal investment acc, once we leave to Germany use the money from the investment account and let the retirement acc's grow until retirement. However, if we then decide not to retire in the United States, will still lose the tax benefits, since Germany does not accept those retirement accounts.

Also, in addition, I haven't my decision yet, if I should apply for American citizenship or not (mostly based on tax reasons in case we would move back to Germany). With that in mind, and considering the fact, that there is also a risk of divorce, no American citizenship and living back in Germany only, without the flexibility of coming to USA, I am a bit confused what the right option in regards to retirement might be.

There are many different scenarios, and maybe we can go through them more in detail at some point. For right now, I would be happy to hear if someone has been in a similar situation or knows similar cases and to hear their stories.

I hope it was not too confusing and I'm happy to respond to any follow up questions.
Thanks to all of you for your help.


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Re: Investment Planning [Germany ex-pat in US]

Post by Morgi87 » Thu Apr 11, 2019 9:08 am


Anyone some thoughts on this, some advice or a link to a helpful thread?

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Re: Investment Planning [Germany ex-pat in US]

Post by prudent » Mon Apr 15, 2019 6:32 pm

Hi and welcome. I wonder if there are so many variables in your question (as you stated, "many different scenarios") that it is difficult for someone to offer guidance.

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Re: Investment Planning [Germany ex-pat in US]

Post by QuantOfAsia » Mon Apr 15, 2019 8:09 pm

Dear Morgi87,

Sounds like an exciting though complex set of "good choices" ahead of you whether to spend more of your future in the US vs Germany vs elsewhere.

The good news is that US 401(k) plans are some of the best and most cost effective retirement structures on the planet. If you do go back to Germany (or another country), I would double-check the tax treaty on how US pensions would be treated / taxed in your country of residence at that time. I haven't checked Germany's recently, but in most cases I've seen it worthwhile to keep investments in the 401(k) even after moving outside the US until at least age 59 1/2, and often beyond that.

Even more important than the tax planning, it seems you have the healthy habit of saving and buying world class index funds regularly.

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