@donkort wrote:
Do you have 40 quarters (10 years) worth of FICA contributions? That's what it takes to be eligible for minimum regular Social Security and Medicare.
If you work for an American company overseas, then I would assume that they take FICA out. Otherwise, obviously, your Social Security contributions stop, and your benefits in the end might go down.
I would keep my American credit cards open while overseas, and use them. You can use them in many countries, and you could pay them off monthly using "autopay." Just make sure you keep track of your payments. This would serve to keep you in the American credit "loop."
I believe you would get "income" from the people who pay their rent to you, so you would still have to fill out your taxes every year. Obviously, if you work for an American company, you would fill out your taxes like normal.
This is my impression. I hope people will chime in to confirm what I wrote is true, or if there are other considerations.
Just on the tax front:
American citizens (and green card holders), unlike almost every other country in the world, are taxed on their worldwide income. So even if your only income was all in country X, you still need to fill out a US tax form each year if your income is above the standard deduction (e.g. $12,500 this year for single filers). That's the bad news and is part of what has caused some people to give up their US citizenship (the major trouble comes with retirement plans: country X may have a plan that's similar to say a Roth IRA, once retired, you can take out that money free of tax, as far as country X is concerned. But the US will say "That looks like ordinary income, you owe....")
The good news is that there are ways to avoid double taxation. First is the Foreign Earned Income Exclusion: you can exclude from US taxes around $120K, after taking deductions for housing expenses. You have to meet one of two rules for this, Substantial Presence (you were in that country for at least 330 days in 12 months overlapping the tax year) or Bona Fide Resident test (you have established yourself in a meaningful way as a resident of the new country).
Alternatively, or in addition if you still have income after the FEIE, there is the foreign tax credit, where you get a $ for $ reduction for the tax you paid to the foreign government.
If you want to contribute to an IRA, you must have earned income, and income excluded under FEIE doesn't count (as we found out when my daughter contributed to a Roth when she had excluded her income... 25 years for tax evasion. Well, a $50 penalty)
On Social Security. Some countries have various treaties with the US on this, usually called Totalization. They eliminate double SS payments (one to US, one to the other country) and also allow you to count work both in the US and abroad as a way of meeting various requirements, such as the 40 quarters one.
So, international tax breakdown, $2000 and cheap at that.
. I may consider some countries like France or Switzerland as well.
Fico8: EX~EQ~TU~810 (12 month goal~840).
