Ever wonder about the financial logistics of retiring abroad?
Travel websites make it sound so alluring. "Retire on a shoestring in Belize!" "Check out the freebies for ex-pats in Panama!"
It brings to mind an episode of "The Simpsons" in which Homer, after watching a promotional video, convinces Marge to move to the idyllic Cypress Creek planned community, home of the Globex Corporation.
Of course, just a few scenes in, Marge is drinking heavily out of boredom and Homer's boss turns out to be a villain.
Don't let this happen to your retirement. Consider a sober look at all the transition issues, including taxes, before making a move, particularly a move abroad, experts say:
-- I'm moving abroad full-time. Do I still have to file a U.S. tax return?
In a word, yes.
"People forget or they don't know that as a U.S. citizen living outside the U.S., their tax obligations (at home) essentially don't change," said Dennis Brager, a Los Angeles tax attorney. "They have an obligation to file a return and potentially pay taxes."
-- So, which tax do I pay?
The first step is understanding Uncle Sam's long arm when it comes to taxing American citizens living outside the country, notes John Olivieri, a partner with New York law firm White & Case.