Avoiding Common Errors When Moving Overseas

The excitement of moving to a tropical paradise can sometimes cloud practical judgment. Retiring abroad is entirely achievable, but it requires methodical planning. Protect your financial security and emotional well-being by avoiding these frequent missteps.

• Buying property before renting: Never buy a home in a foreign country sight-unseen or immediately upon arrival. Renting for at least six to twelve months allows you to experience the neighborhood, understand the local property market, and ensure the climate agrees with you year-round.
• Assuming Medicare travels with you: A critical healthcare reality is that traditional Medicare does not cover medical care received outside the United States. You must budget for local private health insurance or out-of-pocket care. If you plan to return to the US frequently, you may want to review your options on Medicare.gov to decide whether maintaining Part B is worth the monthly premium.
• Ignoring US tax obligations: Moving abroad does not sever your relationship with the Internal Revenue Service. The United States taxes its citizens on their worldwide income, regardless of where they live. While mechanisms like the Foreign Earned Income Exclusion and Foreign Tax Credits exist to prevent double taxation, you must still file a US tax return every year.
• Overpacking and shipping everything: Shipping a container of furniture overseas can cost tens of thousands of dollars and subject you to complex customs import taxes. Most expats find it far more economical to sell their heavy furniture in the US and buy local, climate-appropriate furnishings in their new country.