Thank you very much for sharing that link to Bogleheads! It is a lesson in “financial fitness” in a nutshell. No fuss, no muss. Simple and easy to follow. I will forward to my D and share with the young people I care about.
@IxnayBob, it is hard to get EU citizenship. It used to be the case that if you live in Ireland for 5 years, you could get it. But, that may have changed. In my case, living in the EU would reduce the amount of flying that I am doing these days, but that can always change. I just seemed to be plugged in at high-ish levels in the UK. For us, Canada would be easy as ShawWife is a citizen and I could structure my business life to qualify within 6 months as a permanent resident and eligible for health care (I’ve consulted a lawyer about this). But, parts of Canada seem like home to us (and we co-own a house). And one child is also in California.
@shawbridge, My (deceased) father had been a German citizen who left for political reasons (he was part of the Bauhaus). I think that’s my entree into getting citizenship; maybe I should hire an attorney, because I can’t seem to get moving on this, although there’s no great rush.
We were watching Broadchurch last night, filmed in Southwest Britain (I believe referred to as the Jurassic Coast). Show and landscapes both recommended. That might make it an additional contender, added to Scotland, southern France, etc.
I really like Broadchurch. Watched all of the first season when flying on BA. Waiting for the second season.
A friend whose parents were Holocaust survivors was able to get Austrian citizenship and his kids now can live in the EU.
@shawbridge, the second season is on BBC America. So far, two episodes have been shown. Unexpected plot. Season three contracted.
I have heard of Holocaust refugees getting citizenship. I hope it works for other situations; my father became persona non grata for political rather than religious reasons and was never incarcerated, but his departure was “highly motivated” nevertheless.
What happens to estate taxes if you retire to a foreign country? Do you pay to the US and the country you’ve lived in retirement?
Yes the US taxes still get paid. Some people do ‘resign’ their US citizenship to end the tax tie.
I have dual citizenship with Switzerland (and so do my two daughters, we were all born in the US). My parents immigrated from Switzerland to the US. H would be allowed to work and live in Switzerland being married to me 
My siblings didn’t fill out a simple form before they got married and ‘lost’ their Swiss ties - brother is divorced and has processed paperwork and has since regained his dual citizenship (and therefore dual citizenship for his two children). One sister is working towards getting her dual citizenship restored, but hasn’t even discussed it with current H - she may be doing it so she can establish for her daughter, because daughter will get it if/when her mother gets.it. Funny thing is her first H had two Swiss parents and their daughter is ‘more Swiss’ (100%) than any of her cousins with only one Swiss parent (50%).
One never knows where one may decide to live down the road, but H has visited one time and is fine with me visiting w/o him. So living in Switzerland is not on my current horizon, but will make an extensive visit when I can take the opportunity.
If I did live in Switzerland, I would have to look into how the medical coverage could be handled. At my last visit, I checked and found two hospitals that take Blue Cross insurance (so I didn’t take out travel health insurance).
If you give up your US citizenship, does it affect the inheritance to you rkids who remain US citizen? I wonder how generous the laws are for passing assets to a foreigner kid?
Found this:
http://renunciationguide.com/expatriation-and-tax-details-of-current-law/exit-tax-on-renunciants/
On the other hand, you would no longer owe U.S. estate tax, and anything left to non-US heirs would not be taxed by the US.
Then there’s the exit tax…
It looks like we are staying put…
I’m trying to wrap my head around this Roth401k vs. 401k scenario.
My wife and I are both 58 and contributing 48,000 total to 401k each year (24k each) probably till we are 67.
If our expected taxable amount starting at 71 will be around $73,800 (and continue at the amount until we are 120!) this would put us at the 15% federal tax rate. We are at the 28% federal tax rate with our current salaries and will be until we are 67
I can’t see any reason to contribute anything to a Roth401k now OR eventually try to “convert” the 401k into a RothIRA. Am I missing anything? I can’t see any reason to switch over to Roth if our retirement tax rate is going to be substantially lower than our current rate which will stay at 28% until 67. Any thoughts/comments?
Hope this makes sense to everyone.
Yes, you are correct. That is what Ed Slott recommended. He says to move the tIRA to Roth when you retire and before you turn 70 so you can pay the least taxes per year until you reach your RMD year. In your case you can start moving it at 68 for a couple years? His suggestion is benefical if you were going to retire earlier that way you have time on your hands. For example, lets say a person retires at 60 - that’s 10 additional years added to the 27 RMD years. It basically lowers your balance by the time you reach 70 years old.
However, if your RMD is 78K you are already in the 15% tax bracket. Perfect. You don’t need to move your money to a Roth. I agree that makes no sense - why pay more taxes than you have to!
I forgot one thing - SS - that may push you to the next bracket? Not sure how much is taxable too. I’m not an expert on SS so maybe @IxnayBob can chime in. It all depends on what deductions you have too.
@ohiopublic, In case you missed Attorneymother’s excellent summary on the advantages of Roth IRA I am copying her post #5454 here. Would be great if we could continue to expand on this list and keep reposting:
03-11-2015 at 11:07 am edited March 11
Thank you, @IxnayBob for adding that.
Because the Roth owner has “pre-paid” income taxes on the Roth balance, he is essentially also “gifting” the pre-paid income taxes to the next generation. I will add it to the list. Please double check my wording on (3):
(1) Withdrawals from the Roth by the owner:
– no RMDs ever while owner is alive = tax free growth during life of owner = good way to pass on assets to spouse or heirs (not considering estate taxes here)
– all withdrawals are free from Federal taxation, meaning that Roths:
(a) do not count as taxable income against SS
(b) do not incur the 3.8% Medicare surcharge on net investment income
© do not count as income that may subject taxpayer’s qualified dividends and capital gains to the AMT because Roth withdrawals do not count in AGI
(2) Withdrawals from the Roth by surviving spouse of owner have the same benefits because surviving spouse can make the Roth his/her own and have all of the benefits in (1) above
(3) Transfer of ownership of a Roth to non-spouse heirs: because the balance of the Roth is post-income tax, the Roth owner is essentially pre-paying the taxes on all deposits and “gifting” those pre-payments of income taxes to the non-spouse heirs (without those payments being deemed “taxable gifts” and incurring gift taxes). By doing so, the Roth owner is also reducing the size of his taxable estate.
(4) Saving during retirement: You can make contributions to a Roth if you continue to work in retirement as long as you stay within the income limits. Traditional IRAs do not allow contributions after age 70 ½.
Just bought this book from Amazon "Get What’s Yours: The Secrets to Maxing Out Your Social Security ".
H is 66 and plans to work part-time next year until 70.
We haven’t done any reading about SS yet.
Here’s a review from NYT.
http://www.nytimes.com/2015/03/14/your-money/the-black-art-of-deciphering-social-security.html?src=me
@cbreeze
Larry Kotlikoff, the author of the book, has for some time been a regular contributor on the PBS Newshour on the topic of claiming SS benefits. Here is a list of all of his articles in which he examined various scenarios:
http://www.maximizemysocialsecurity.com/press-articles?tid=29
His book is co-authored by his collaborators on the PBS Newshour.
I haven’t waded through the list, because the SS question is several years away.
^^Thanks for the link. We really should have looked into SS earlier.
The Maximize software (on AttorneyMother’s link above) has “made” me many multiples of its $40 cost. The book explains it all, but I’m lazy and would rather just have the answer :). Maybe I’ll read it anyway.
I just made this year’s contribution to my defined benefit plan. The law enables me to contribute very large numbers. I always wonder if it is a good idea but since I didn’t know how to make Roth contributions until this year, it was the only thing I could do. Now, I’m going to work on getting a new custodian for my 401k. Although that all takes second seat behind earning money. I am working to close some new clients.
@shawbridge, yes first things first – earning money is a good thing
And, even if it’s not Mega, a normal Backdoor Roth doesn’t need a 401k and it adds up.
@dstark
Would you be kind enough to talk about muni bonds? Many years ago, we had some money parked in muni money market funds, but the return these days is abysmal. Should I be looking at some longer-term muni funds or is the interest rate picture still pretty unfavorable? I need some place that might get close to inflation rate to park “safe funds.”
Ironically, some of my first deals as a new associate were representing bank buyers of muni bonds. Those were great training deals for new associates because the indentures were pretty cookie cutter. My eyes glazed over.
Thank you!
Edited: I didn’t mean to single you out, dstark. Anyone is welcome to chime in, of course.