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Financial Planning Considerations for Expats

Financial planning considerations for expats

If you are lucky enough to live overseas, you face unique challenges that are all too familiar. Putting a financial plan together may help reduce some of the uncertainty around your finances as you navigate your way through a foreign system.

Whether retired or working abroad, you may be struggling with understanding what your options are with buying or selling a home, moving cash overseas, obtaining insurance, and investing. Regardless of where you are on your journey, I hope that you’ll find this letter helpful.

Real estate: If you’re in the market for a home, finding a mortgage can either be very difficult or expensive. A potential solution may include borrowing from current investments without selling to avoid a taxable gain. You may also qualify for the tax exemption when selling your overseas home.

Cash flow: Navigating around fluctuating currencies can be exhausting if you’re not paying attention, and costly if your income is in dollars. Keep a cash reserve in the local currency of 3-9 months of living expenses in order to help you avoid exchanging currencies during unfavorable periods.

Retirement: Unless you’re working for a U.S. company that offers a 401(k), you may find that saving for retirement takes some effort. Depending on your income and tax situation, you may be able to open a retirement account in the U.S. and enjoy the associated tax benefits.

Insurance: Covering your health, life, and risk of disability while overseas is just as critical as if you’re at home. At the very least, insure what you can’t afford to lose. There are a few strategies for obtaining this insurance and your needs should be carefully considered.

Investments: Most brokerage firms won’t allow you to keep investments while overseas, or allow you to use your foreign address. If the firm finds out that you’re abroad, they can liquidate and close your account with little notice, creating an unfortunate tax situation. Investing offshore will require additional taxes and reporting to the IRS. Owning exchange traded funds, stocks, or bonds with a U.S. custodian that accepts your foreign address can be the most optimal solution.

Taxes: Depending on your situation, you may be eligible for the foreign income exclusion credit, and if so, set-up a retirement plan to defer additional income.

Estate: You will need a will, power of attorney, health care directive, and possibly a trust in the U.S. and another set of documents drafted in the host country. Sometimes this requires two attorneys to draft each set of documents. Confirm that your account beneficiaries are correct as this usually bypasses the will document.


Matthew Davis is a CERTIFIED FINANCIAL PLANNER™ practitioner and owner of Eureka Wealth Management, based in Palm Springs, CA. He advises and helps implement solutions on retirement, investments, and insurance for expats. His clients connect with him virtually on Google Hangout or Skype and he serves as the primary consultant for their finances. Having lived overseas himself, he knows all too well the struggles and joys of living abroad, and is committed to improving the financial lives of his clients. For a complimentary initial consultation, visit or call +1 (760) 537-0791.

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