Planning on Financial Independence Retire Early while on a work visa has a unique set of important considerations and nuance to understand. Today we bring on a financial professional to help us sort through the noise and better understand which questions we should be asking.
I'm from Brazil and may move back there after my non-FIRE retirement. I didn't know a lot of the information in this post. Looks like I will need to set an appointment with Jane.
One thing that got my attention is her talking about green card holders living abroad and not paying taxes on retirement withdrawals. As I understand it, one will lose the green card after about a year living outside the US, though.
Another issue she did not mention is that (as I understand it) if you move abroad and lose your green card, then you don't get your Social Security even after many years of contributions. This can be significant (in my case, a couple of thousand dollars a month). So it seems to me that if someone contributes to SS for a long time and wants that money but also retire abroad, then getting US citizenship is the way to go.
I’m a dual Brazil/US citizen, but have lived in the US 98% of my life so most of the international items are outside my own understanding, which is why I really appreciate having Jane fill in some of the gaps.
I believe you can still collect SS as long as you have enough credits, but I’ll defer to others who are more familiar.
This SS page describes the situation. It seems you need to come back to the US every six months for a full month to keep receiving SS. They don't mention green cards, so it sounds like even if you don't have a green card and do this, you can still collect. In any case, spending 1/6 of your time every six months in the US is going to be impractical to most people, so the US citizenship seems to be the only way to receive SS without living in the US.
You are right about the green card piece - you have to do something to show that you have not abandoned your residency (https://www.jatoidekirby.com/library/8-steps-to-maintaining-residence.cfm) or be wokring for a US company. I'm currently researching what happens if you abandon it, and you are a covered expatriate if you have to pay the exit taxes.
If you are able to becoming a citizen has more advantages besides being able to vote.
- Your immigration status is not your tax residence status - something I talk a lot about. Once a green card holder or US citizen, your tax residency status stays unless you do something to give it up. So yes you can loose your green card, by being outside the country more than the allowed time, but it does not change your tax residency status. You are still a US tax resident, all taxes apply to you, worldwide taxation applies, even though you may have trouble coming back into the country.
You could potentially be a covered expatriate (exit taxes issue) based on your green card, even though not in the US. If you are a green card holder 8 of the last 15 years - this is a posibility. There are other conditions, but it starts here. So to really break your ties with the US, you need to give up the green card officially, via form 1-407.
Wow, this is excellent, thank you so much, Andre!
I'm from Brazil and may move back there after my non-FIRE retirement. I didn't know a lot of the information in this post. Looks like I will need to set an appointment with Jane.
One thing that got my attention is her talking about green card holders living abroad and not paying taxes on retirement withdrawals. As I understand it, one will lose the green card after about a year living outside the US, though.
Another issue she did not mention is that (as I understand it) if you move abroad and lose your green card, then you don't get your Social Security even after many years of contributions. This can be significant (in my case, a couple of thousand dollars a month). So it seems to me that if someone contributes to SS for a long time and wants that money but also retire abroad, then getting US citizenship is the way to go.
I’m a dual Brazil/US citizen, but have lived in the US 98% of my life so most of the international items are outside my own understanding, which is why I really appreciate having Jane fill in some of the gaps.
I believe you can still collect SS as long as you have enough credits, but I’ll defer to others who are more familiar.
Boa tarde :-)
This SS page describes the situation. It seems you need to come back to the US every six months for a full month to keep receiving SS. They don't mention green cards, so it sounds like even if you don't have a green card and do this, you can still collect. In any case, spending 1/6 of your time every six months in the US is going to be impractical to most people, so the US citizenship seems to be the only way to receive SS without living in the US.
https://www.ssa.gov/international/payments.html?tl=0
You are right about the green card piece - you have to do something to show that you have not abandoned your residency (https://www.jatoidekirby.com/library/8-steps-to-maintaining-residence.cfm) or be wokring for a US company. I'm currently researching what happens if you abandon it, and you are a covered expatriate if you have to pay the exit taxes.
If you are able to becoming a citizen has more advantages besides being able to vote.
I promised to get more research on this
- Your immigration status is not your tax residence status - something I talk a lot about. Once a green card holder or US citizen, your tax residency status stays unless you do something to give it up. So yes you can loose your green card, by being outside the country more than the allowed time, but it does not change your tax residency status. You are still a US tax resident, all taxes apply to you, worldwide taxation applies, even though you may have trouble coming back into the country.
You could potentially be a covered expatriate (exit taxes issue) based on your green card, even though not in the US. If you are a green card holder 8 of the last 15 years - this is a posibility. There are other conditions, but it starts here. So to really break your ties with the US, you need to give up the green card officially, via form 1-407.
An amazing article! thanks Andre and Jane!