Financial Considerations of Moving Abroad

When planning your move abroad, first make sure your U.S. travel documents are in order. Many countries have passport requirements that you must meet before some airlines even allow you to board. If your passport is nearing expiration, especially if you'll be out of the country when it does, it's best to get it renewed before applying for a visa.

Most nations require a long-stay visa for visits longer than 90 days. However, some countries, like Greece, Portugal, and St. Lucia, offer residency, multiyear visas, and even citizenship to foreigners who invest a minimum amount in real estate or the local economy. Similarly, many countries, such as Costa Rica and Thailand, offer special visas for retirees—typically those ages 55 or above—who meet specific income requirements.

Next, gather and submit all the necessary documents, which typically will include not just a valid passport and the completed visa application but also proof of accommodation and health insurance and that you have enough money to support yourself during your stay. (That's assuming you aren't seeking official employment or looking to start a business in your new home country, which carries other implications—see "Taxes.")

Then prepare to be patient—some embassies are more efficient than others. In some cases, such as when a short-term trip turns into an extended stay, you may want to consult with an immigration lawyer, who can help with everything from renewing visas to establishing permanent residency.

Many expatriates maintain dual bank accounts: one in their home country to handle ongoing payments or transfers and another in their destination country.

Overseas accounts can take time to set up, sometimes requiring a local address that's not a hotel or P.O. box. In the meantime, maintain sufficient funds in a bank that operates globally or that offers reliable access to ATM networks abroad and can process transfers quickly. Some offerings even eliminate foreign transaction fees.

Here, too, is where advance planning can help. Notify your U.S. financial institutions that you're leaving and for how long, so when you tap your assets abroad it won't be flagged as fraud. You may also need to report overseas bank and investment accounts annually to the IRS—especially those with balances topping $10,000—or face stiff penalties.

And don't overlook the currency fluctuations that can affect your purchasing power abroad—they could negatively impact your wealth, but you can also use it to your advantage. For instance, if the U.S. dollar is currently strong against the local currency but you're concerned it will weaken, you may wish to transfer more of your American currency to your stateside bank account to capture the advantageous exchange rate.

Moving abroad invokes the risk of double taxation since the U.S. is one of the few countries that taxes by citizenship, not residence.

In addition to paying taxes to their country of residence, American expats must also pay taxes to the U.S., including on all capital gains, interest, rental income, and ordinary income. But an IRS provision, the Foreign Tax Credit, can help reduce your tax exposure in the U.S. There are also dozens of tax treaties between the U.S. and other countries that can further limit the potential for double taxation.

For longer-term expatriates, the IRS also offers the Foreign Earned Income Exclusion, which allows U.S. citizens who can demonstrate they were abroad for 330 full days in a consecutive 12-month period to exclude up to $132,900 in foreign earned income per individual from U.S. taxes for 2026.

Also check to see if your home state requires you to file taxes. Some states can be aggressive in collecting tax revenues no matter how much of the year you spend away, so it may be worth establishing residence in one of the nine states that have no personal income tax—Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, or Wyoming—prior to moving overseas.

Given the potential pitfalls, it's advisable to consult with a qualified tax expert and a tax attorney who is versed in both domestic and international tax laws—and the potential conflicts between the two. The U.S. distinguishes between filing as single versus married, for example, and between short- and long-term capital gains, whereas other countries may not honor these distinctions. Tax years, too, may not align, with some countries following the calendar year while others do not. With all these nuances, hiring a cross-border CPA can help you navigate the tax laws of both countries.

For those who are nearing or in retirement, be aware that Medicare generally won't cover medical expenses incurred outside the U.S. That said, you should generally still sign up for Medicare and any Medicare supplements as soon as you're eligible—typically at age 65—or potentially face stiff penalties. (If you're abroad when you turn 65, you have three months after you return to sign up for Medicare Part B.) If you fail to immediately sign up for Part B, your premiums will increase 10% for every 12-month period during which you were eligible but not enrolled.

Depending on your country of residence, you could qualify for its national healthcare plan, which could provide wide-ranging coverage for affordable monthly premiums. If so, consider keeping Medicare Part A (covering hospital care) if you don't have to pay a premium, while forgoing Medicare Advantage and prescription drug plans. Enrolling in Part B depends in part on whether you anticipate seeing doctors in the U.S. often enough to justify the monthly premiums.

Whatever your coverage in the U.S., you will likely require separate insurance for your time abroad. Many major health insurers offer private insurance plans tailored to expats.

In any event, make sure you remain current with any local immunization mandates, and ask your doctor for electronic copies of medical records you can store in a secure cloud service.

Updating your estate plan may be necessary to accommodate foreign laws regarding the distribution of assets, inheritance and gift taxes, probate, and succession. Inadequate planning can lead to assets passing to the wrong beneficiaries or unnecessarily high taxes.

Nineteen U.S. states and the District of Columbia¹—and some foreign countries²—recognize a uniform international will. For states and countries that do not, you may need to create a multijurisdictional will or supplement your primary will with a so-called situs will tailored to your adopted country. For example, if you have assets in Delaware, Florida, Spain, and the U.K., an international will would cover assets in Delaware and the U.K., but you may need separate wills for Florida and Spain.

Be clear in all your wills and documents about how assets should be distributed in both countries, and keep your trustees up to date with instructions on how to act if anything happens to you. Some countries require your executor to be a local resident. In any case, it's important to find an attorney familiar with estate laws in your destination country.

For example, if you own real estate or hold or transfer other assets abroad, make sure you understand the estate laws in your adopted country. A local attorney can provide information like how to title assets to help ensure a smooth transition to your intended heirs and if your assets abroad will be subject to probate or inheritance taxes.

As you prepare to navigate the financial hurdles of moving abroad, don't discount the potential emotional challenges. Many people dream of living in another country, but leaving behind friends and family could lead to emotional isolation. Regular communication with loved ones back home can help you keep your support system while forming relationships in your resident country offers an opportunity to learn more about the customs and culture.

Before you commit, consider taking a few extended trips to your desired location during different seasons to get a feel for daily living and begin building a community. It's better to do your homework before you put in the time—and money—that a move abroad requires.