<p>That’s good to know, intparent. I’d never heard of it until today, when I sat next to a guy on a flight who was freaking out about the crash of the dollar, and how we were all going to get taxed an additional 30% on every move we made. Seemed highly suspicious to me, as I really think this would be a huge deal if we all were getting taxed an EXTRA 30% on every move, that it would have been front page news for a long time.</p>
<p>Wish I had enough money to want to hide it…</p>
<p>You can move money between accounts in different currencies at US branch of a foreign financial institution. Per IRS rules, you don’t have to report it.
See link below
<a href=“http://www.irs.gov/Businesses/Corporations/Basic-Questions-and-Answers-on-Form-8938#Q10”>http://www.irs.gov/Businesses/Corporations/Basic-Questions-and-Answers-on-Form-8938#Q10</a>
</p>
<p>I was wondering if it was going to affect people who have mutual funds in the US that are based on international investments, but it doesn’t sound like it.</p>
<p>I think the law is meant to catch people who is using Swiss bank account to hide things, mutual funds that are invested in international investments are not hiding anything.</p>
<p>Yes, most people have nothing to fear. Some institutions that facilitate asset hiding for US taxpayers might encounter difficulties, some US taxpayers might have to scramble a bit, all US taxpayers who have been honest have nothing to worry about, and all institutions will have a higher regulatory burden (as intparent, my wife, and countless others who are doing their best to meet FATCA requirements know). </p>
<p>It will not matter an iota to 99.9% of people. </p>
<p>We have started to think through post-retirement options down the road. One of my concerns about staying in the house is that even once paid off there are expenses beyond the predictable (tax/insurance, utilities, lost-interest on savings…not huge these days). You still need to be ready to finance a new roof, furnace, whatever. We have not ruled out renting (hopefully with lots of travel too), but we do like the idea of “home”.</p>
<p>@Colorado_mom, while your family still has a job, it’s best to apply to a home equity line just in case for things that you were unable to predict that might require you to spend money, it’s cheaper than reverse mortgage. You don’t have to use it. It gives you peace of mind. Nobody will lend you money when you don’t have a job.</p>
<p>DrGoogle,</p>
<p>Wouldn’t someone be able to get a loan, if they wanted one, with investment income? When my late father was alive, we refinanced his house (not a HELOC, a refi) with his investment income, small pension and Soc Sec income and the equity he had in the house being sufficient to qualify.</p>
<p>Had an interesting chat with DH over lunch today about our investments. He pointed out that the tax on dividends and … oh poo there was something else which escapes me at the moment… will be less than our current income tax, so he calculates that what our net (earned) income is now will, comparatively, be higher, looking at unearned income, when we look at the growth of our investments, and this doesnt take into consideration his small pension and social security, when that kicks in. It helped a little, but I still get neurotic about his considering retiring at a very young age and our having to get good personal health insurance.</p>
<p>My bad. He said it was capital gains and dividends that are taxed at a lower rate. </p>
<p>They are, but those rates do get changed by congress from time to time. It is hard to know what they will be in 20 years.</p>
<p>LOL, we must be a lot older than you! </p>
<p>And who know what the tax rates will be then too.</p>
<p>Well, I just think of the fact that my retirement account doesn’t all get cashed out right when I retire, I will plan for it to last me 25-30 years. So assuming I don’t cash all accounts out at once, I do think it could have an impact if the tax rates change.</p>
<p>I hope we don’t cash it all out at once! But regardless, its still likely (I HOPE) that the tax rate on that income will be lower than on our earned income. DH was explaining it today comparing it to the tax hit we take on our earned income (well it will be lower now that I am semi retired). I responded by talking about our income with the combined earned income and unearned income growth, compared to what will then just be the unearned income alone. He told me I was looking at the glass half empty :(. </p>
<p>“I hope we don’t cash it all out at once! But regardless, its still likely (I HOPE) that the tax rate on that income will be lower than on our earned income. DH was explaining it today comparing it to the tax hit we take on our earned income (well it will be lower now that I am semi retired). I responded by talking about our income with the combined earned income and unearned income growth, compared to what will then just be the unearned income alone. He told me I was looking at the glass half empty.”</p>
<p>Well, he does have a point. The main thing is, after taxes, how much money will be coming to you? And if it’s more that what you were getting before, yay! Taxes on earned income are so high, it seems like the smart thing is to get most of your income from the unearned income, if you can do it. But of course, I guess you never know what Congress will do, like intparent said. If they decide to tax all income the same, there are going to be a lot of unhappy people in the game. And isn’t unearned income in retirement funds still taxed like your earned income? So you might be taxed 39.6% on that, instead of 15%? Yikes, what a difference!</p>
<p>All this stuff makes my head spin.</p>
<p>We thought DH might be able, in the not too distant future, to collect spousal SS while both of ours continued to be untouched, but apparently that would only work if he was older than I, which he isnt.</p>
<p>Defitinitely prefer a 15% tax to the 39.6% tax!</p>
<p>“We thought DH might be able, in the not too distant future, to collect spousal SS while both of ours continued to be untouched, but apparently that would only work if he was older than I, which he isn’t”</p>
<p>Are you sure about that? If he’s 62 or older, can’t he? Have you gone through all the SS calculators online?</p>
<p>I’m not even 62 yet ( still a week or so away from 61) and he is several years younger than I 8-> </p>
<p>Then maybe he can when he does turn 62? As long as they still have the spousal SS thing going on. I don’t know how long that’s going to last.</p>
<p>Possibly, though I may have started collecting by then. Not sure how all that works. We’ll add that to the list of things to think about in 5-6 years :)</p>
<p>Probably not even worth thinking too hard about. Chances are it will all be different by then.</p>