Summer is a common season for people to make the transition overseas. Whether this is your first time or 10th time, I hope this moving overseas checklist focusing on personal finance helps you get organized before heading to your next destination.
The checklist is designed for globetrotters who have permanent ties with the US, although some general principles may apply if you are transitioning between other countries.
You can now download a copy in pdf format with checkboxes to help you organize your move. Just signup through the form below and you will receive a link to download the file. The content is exactly the same as in the following post.
Designate a US address and state of domicile
Unless you are moving to another country permanently, there is usually a need to maintain a US address. For example, you may not be able to open a new IRA or trade in an existing one if you don’t have a valid US address.
In addition, many personal finance related concerns are still regulated at the state level, such as insurance, estate, and local taxes. If you plan to return to the US in the future, it is important that you remain in good standing with these state level regulations, and know which government to go to when you need to resolve any issue.
If you still have family in the US, usually the easiest way to accomplish this is to change your address to a trusted family member’s. You may also hold real property that serves as your US permanent address. However, some states have notoriously stringent rules determining whether you are a resident of the state, or whether you abandoned residency in another state. Clearly the states did not have us globetrotters in mind when they established these rules. So the best we can do is the following:
- Get your driver’s license and voter registration matching your intended US permanent address
- Change your existing bills, such as phone and credit card, to the address for a couple of months before you move, if you intend to close these accounts
- Keep a copy of the end of lease agreement, property sale document, or cancellation of utility services for the property you moved out of
- Register your vehicle in the new state if you are keeping it
- Remember to file taxes (if applicable) in both the old and new state as a partial-year resident to establish a trail of relocation
- If you are still employed by a US company that withholds state income tax, change the state withholding to the new state
Bank or investment accounts
In the era of the Internet, it’s easier to have access to your US accounts even while you’re overseas. The following steps will make it even easier:
- Make a list of all of your accounts. Use this one page financial plan if you need a tool to get organized.
- Get online access for every account, with the ability to move money, place trades, change the address, receive customer service, etc.
- Consider opening a new bank account with low to no foreign transaction fees if you are still being paid in US dollars in a US bank account so you can access your paycheck more easily
- Notify the bank that you may be traveling overseas so they can place a notice on your account (to prevent unnecessary fraud alerts when you take cash from an overseas ATM)
- Keep copies of account statements with full account details if you don’t have access to them online
- If you eventually open a bank account at your overseas destination, you can link the overseas account and your US account through services such as Transferwise, Currencyfair, Xoom, and Paypal.
While you may not require US credit while being overseas, it’s important to make sure it’s available when you need it.
- Consider applying for a credit card 1) without foreign transaction fees, 2) with a chip and 3) request a PIN (the latter two are common in other parts of the world, although haven’t caught on in the US yet.)
- Notify credit card companies of your intent to use overseas (avoid fraud alert)
- If you own a real estate property in the US with substantial equity, consider opening a Home Equity Line of Credit for emergency expenditure that may exceed your liquid cash and maximum credit card limit.
- Check your credit report one last time to make sure the info is accurate
- Consider placing a credit freeze on your credit report while you are overseas (after you’ve opened all the accounts, applied for all insurance policies, and checked your credit reports and social security statement.)
- If you expect the need to get credit in your new country, check in advance whether you should bring any information from the US to help prove your credit worthiness in a place where you have no credit history.
Make sure you are able to continue to pay your debt and within reach of the creditors.
- Change your addresses and contact info on file with the lenders.
- If you are used to paying bills as they come in paper form, now is the time to set up automatic payments through the lender or through your banks’ online bill pay function. You want to make sure the bills is paid even when you are temporarily out of reach.
Many US employers offer free-of-cost health, disability and life insurance to their employees in the US. That might not be the case when you are working for a foreign employer. On the other hand, some countries offer universal coverage for their citizens or residents meeting certain criteria. You should do the following:
- Find out if you are eligible and the cost to participate in your destination country’s universal coverage for health, disability, and accidents.
- You have a higher probability to become disabled during your working years than die. If you won’t be covered by your employer or by a public insurance, work with a disability insurance broker to find you potential coverage when you are overseas. Or if you belong to a professional organization, find out whether there is group coverage available to you that you can opt in.
- Check existing life insurance policies to make sure there are no exclusions for overseas coverage or for particular areas such as war zones.
- If you need additional life insurance coverage, and cannot obtain private coverage from US underwriters, consider international life insurance policies such as this. You can also check group policies from your employer or professional associations that may cover your employment overseas.
- Consider property insurance coverage for the transit of household effects such as this.
- Find out whether you should get international or local auto insurance if you are shipping or buying a car in the new country.
While you may have different retirement plan packages working overseas, you may want to make sure what you’ve accumulated so far is well managed.
- Request your latest Social Security Statement to make sure all information is correct.
- You may also want to have a basic understanding of whether you will be allowed to continue to contribute to US Social Security when you work overseas so you can discuss this with your future employer.
- Consider a rollover of your old retirement plan accounts into an IRA so you have greater control of what you invest in.
- Even if you leave all your retirement accounts where they are, make sure you have online or phone access to all of them.
- Find out what retirement benefits you are eligible to while working overseas. (This should really be done before you take that job offer.)
This is as important for US residents as for us globetrotters. But since we may be thousands of miles away from our family when the unexpected hits, it’s important that we make our wishes known and have the legal documents readily accessible.
- Check and designate primary and contingent beneficiaries for all accounts and insurance policies
- Discuss situations for power of attorney, advance medical directives, and custody arrangements for your children should anything happen to both parents
- Work with an estate attorney to put your decisions in legal documents and leave a copy with a trusted friend or family member. (A copy is always available at the attorney’s office.) Or at least make your wish known to someone else.
- Enroll in the Department of States STEP program at travel.state.gov. This will help ensure that the Consulate or Embassy will be able to assist you in the event of an emergency.
This is probably the main reason you are moving overseas, but remember you are still liable for paying income taxes in the US.
- Notify your last employer of your intended address so you will receive the part-year W-2 for next year’s income tax filing
- Keep the copies of your overseas pay stubs and returns to help you file taxes in the US.
- Remember to file BOTH federal and state income taxes (if applicable) next year.
Anything I missed? Add your suggestion in the comment section.