Expat Financial Planning in 2025

This article was originally published on The Wall Street Journal: "Expat Financial Planning in 2025”.

If you’re thinking about moving to a new country, your finances might be the last thing on your mind. Why spend time worrying about how your Roth IRA will work overseas when you can fantasize about trying new foods, seeing new sights and meeting interesting people?

The reality is that living abroad can significantly complicate your finances, so it’s important to have a plan for how you’ll manage your money as a U.S. expat. 

Understanding expat tax and reporting obligations

When U.S. citizens live abroad, they still have to file tax returns in the U.S., and they might also have tax obligations in the country they live in. Fortunately, this doesn’t mean you have to pay double the taxes.

“There's usually a treaty between the two countries” that dictates how the taxation works, says Robert Levitt, founder and chief investment officer of Levitt Capital Management, a wealth management firm that advises Americans living in Europe. 

You might be eligible for certain exclusions or credits. The foreign earned income exclusion, for example, lets U.S. citizens living abroad exclude their foreign income from their U.S. taxes up to a certain amount ($130,000 for the 2025 tax year), while the foreign tax credit reduces your U.S. taxes by the amount you pay in foreign taxes.

When you live abroad as a U.S. citizen, you have to navigate tax laws in both the U.S. and the country you now reside in. This can get complicated, so you might want to consider hiring a tax professional who specializes in this area.

Ann Marie Regal, founder and CEO of Avrio Wealth, a wealth management firm that works with expats living in Singapore, says that if your finances are relatively simple, you may be able to use a service like H&R Block that helps expats file taxes on their own.

“But the minute you have more money, more accounts, a company, you really need a proper CPA, and you have to pay for that,” she says.

Building an expat-friendly banking and currency framework

Lauryn Williams is an Olympic athlete and a U.S. citizen living in Colombia. She’s also a certified financial planner (CFP), so she has a unique perspective on financial planning for U.S. expats.

Williams says that banking and managing your money when living in another country can be challenging.

“Sometimes you cannot open a bank account as a foreigner at all and sometimes you cannot open one without meeting certain requirements,” Williams says.

You also need to plan for how you’ll pay for items and whether you need to keep cash on hand, since ATM fees can add up quickly. Williams says that the place she lives in is very cash-oriented, so she often isn’t able to use a credit card. If she does use an ATM to withdraw cash, she often has to contend with steep ATM fees.

Cross-border investment and retirement planning

Making the wrong move when investing as an expat can be costly, so it’s important to work with an investing professional who’s licensed in the area you’re living in and has experience working with U.S. citizens living abroad.

“The kinds of investments you buy as an American, like ETFs, you can’t buy as a European resident,” Levitt says. “You can’t buy mutual funds, you can’t even hold existing mutual funds.”

Additionally, Levitt says U.S. citizens should avoid investing in certain securities in their country of residence because they can come with steep tax consequences.

“The IRS considers most of the products that are sold by foreign countries to their citizens as tax dodges,” he says. “So they tax them at a very, very high rate as if they were tax dodges, whether they are or not.”

When U.S. citizens own shares in what’s called a passive foreign investment company (PFIC), the IRS taxes those investments at a high rate. But buying individual stocks, Levitt says, is generally safe in most countries from a tax perspective. 

When it comes to retirement, you also need to be aware of the tax rules around any savings you plan on tapping into. For example, many countries in Europe treat Roth IRAs as regular taxable accounts, Levitt says.

Insurance, estate planning and asset protection overseas

Depending on the country you’re living in, you might need to purchase your own health insurance.

Regal says that in Singapore, employers aren’t required to provide health insurance, and if they do, the coverage might not be as comprehensive. France, however, where Levitt is based, has a public healthcare system that covers eligible expats.

Whether expats purchase other types of insurance depends on their individual needs.

You also need to have a plan for what will happen to your household and your assets if you die abroad.

“Your U.S. estate plan may not travel with you,” Regal says.

Laws dictating how your assets are passed down and how those inheritances are taxed vary by country. Williams advises working with two estate planning attorneys: one in the U.S. and one in your country of residence.

Regal stresses the importance of having a plan for your children if you die abroad, including choosing a temporary guardian who lives in the country you’re in.

“If you die, who’s going to watch your kids until the permanent guardian gets here?” Regal asks.

Managing financial changes and planning sustainably as an expat

Because laws, customs and cost of living vary so much around the world, your financial plan needs to be tailored to the country you’re living in.

Williams says that working with a CFP can help you organize the different pieces of your financial puzzle abroad and ensure your finances are prepared for any curveballs life throws at you.

“Those are going to happen for us in life in general, but they’re definitely going to happen for you abroad when you embrace a new culture, a new currency, a new country,” Williams says.

Working with a financial professional can also help ensure you’re budgeting appropriately in your new home. Regal says she sometimes sees clients overspend in their new home country.

“They get to Asia, they hit the ground running, they travel everywhere and before you know it, they’re in debt,” Regal says. “So then we have to help them get out of debt.”

FAQ

How do I avoid double taxation and comply with dual tax regimes?

While many countries tax income based on residency, the U.S. taxes based on citizenship, so any income you make worldwide is subject to tax. You might qualify for a foreign tax credit or foreign earned income tax exclusion, but you must still file a U.S. tax return.

Can I invest in U.S. funds while living abroad?

You can still invest in U.S. funds, but it can be more complicated when you’re living in another country. You need to make sure you adhere to tax codes for both countries and plan for currency exchange risks. Keep in mind that there are additional considerations if you’re investing in non-U.S. companies. If you invest in a fund that is categorized as a PFIC, you might face a larger tax burden and have to submit additional documentation.

What estate planning documents do I need overseas?

Local laws on inheritance taxes and asset distribution vary from country to country. In addition, if you have a will that was prepared in the U.S., it might not automatically be recognized as valid in the country where you reside. It might be beneficial to work with an attorney in the U.S. and one in the country where you live to determine what your options are. If you already have a will in place, they can check whether it’s eligible to be used as a uniform international will or if you’ll need to supplement it with a situs will that is designed for your country of residence.

Should I maintain U.S. or host-country bank accounts—or both?

It’s a good idea to maintain a U.S. bank as well as a bank in the country where you live, especially if you plan to live abroad for a substantial amount of time. Your U.S. bank can help you handle ongoing financial needs, while an institution in your country of residence allows you to avoid conversion fees and access money more easily. Check with your U.S. financial institution to see what its requirements are; some will allow you to use a foreign address, but others might close or freeze your account. 

How do currency fluctuations affect my savings and budget?

You’re likely to face fluctuations, especially if you’re earning money in one currency and transferring it to another currency to spend. Depending on the exchange rate, you might find yourself with less money, especially if you’re in an area with a high cost of living. Exchanging currency at a government-authorized source, such as a bank or airport, can help you access your funds safely. In addition, you can also purchase items with a debit card or make ATM withdrawals if your financial institution allows.

This material is intended for educational and informational purposes only. It is not intended to provide specific advice or recommendations for any individual. Additionally, you should consult with your Financial Advisor, Tax Advisor, or Attorney on your specific situation. The views expressed in the material are that of the author and do not necessarily reflect those of any market, regulatory body, State or Federal Agency, or Association. All efforts have been made to report or share true and accurate information. However, the information may become materially outdated or otherwise rendered incorrect due to subsequent new research or other changes, without notice. The author nor the firm are able to always verify the content from third-party sources. For additional information about the firm, please visit the MAS Website at https://www.mas.gov.sg/  and the SEC Website at www.adviserinfo.sec.gov. For a copy of the firm's ADV Part 2 Brochure, please contact us at info@avriowealth.com.