International Nesties
dulcemariamar1
member
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
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Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Do you think you can be MM and a IN?
I am sorry if I am not using the term correctly but I was just wondering if you think it is possible to be an IN and also have the same line of thinking from the MM board. Whenever, I read their posts about their retirement funds, I get worried. I know being an IN, our situations are different but you never know where you are going to end up in life.
I think it is interesting to see their budgets and I know how they spend and save their money, doesnt always apply to me but I still get worried that I am not doing enough.
Thoughts?
Re: Do you think you can be MM and a IN?
Whoa, hold on there. You're an IN, you can't be a regular on another board! You'd be cheating on us!
Dirty cheater! Shaaaaaaame! For shaaaaaaaame!
Anyway...
Oh yes, I worry about that all the time. Retirement planning for me involves purchasing lottery tickets. I can't get my husband to stick to or even make a budget and those women are so good with money that it frightens me. I imagine that most of them would have a fit if they saw how we spend money or, god forbid, the money closet we had in China. (I miss our money closet).
No advice from me, just wanted to call you out on being a dirty board cheater.
Cheater.
Chronically hilarious - you'll split your stitches!
I wrote a book! Bucket list CHECK!
http://notesfortheirtherapist.blogspot.co.uk
For us the biggest problem is that we are American citizens living outside of the United States. Foreign investment firms don't want to deal with us because the Obama Administration has really been cracking down on tracking American money abroad and American investment firms don't want to deal with us because we don't live in the US and once again, the American government doesn't make it easy for Americans to deal with money abroad.
That being said, we're still saving money in the same manner as we would be in the US. The only difference is that we're not putting the money into the traditional US retirement accounts. It does worry me sometimes that we'll be getting screwed over tax wise when it comes to retirement, but that's the nature of being a US citizen abroad--owing taxes on your world-wide income but not necessarily being able to take advantage of the tax shelters available to those living in the US.
I just try to remind myself that I am doing the best that I can do, and my situation really is different from most of theirs. We probably spend more on health insurance than most do (we?re all private in my family) and our taxes, unemployment, etc. are pretty high as well. It?s really like comparing apples to oranges.
When my mother tells me "but you have a really nice house" I tell her that we spend more money on health insurance every month (just our part, not DH?s employer?s contributions) than we do on our mortgage. Our gas his more expensive, but our car insurance is cheaper. It?s just not the same.
So don?t beat yourself up about it!
I dont cheat, I just lurk
I am glad that I am not the only person who worries about this. I still feel like a little kid, playing house and everyone else has their sh*t together. The only good thing is that we are not big spenders. Well except for when we travel, but you only live once, right?
I have a crap attitude about money these days. I feel like my "reward" for being uber-responsible and budget-conscious in the U.S. the last decade is to go out and buy all kinds of delicious cheeses and pricey cuts of meat in Paris.
So, while I kind of feel like a fake whenever I post on MM these days, I used to be good with money in the U.S. and I do still contribute to my retirement accounts.
I don't really know how the retirement thing affects ex-pats earning in foreign currencies. DH and I are still earning our money in dollars, using U.S. bank accounts and thus using U.S. brokerage accounts. Can someone school me on how this changes if you're not earning in dollars?
Yeah, yeah, that's like the classic "I only look, I don't touch" line... ;-)
I have also been worrying about this for a few years because I have absolutely no retirement anything set up for myself. DH does, though, so at least we won't be left totally in the lurch. Actually, my reason is that up until a year ago I had no steady income. Besides that, if you are self-employed in Germany then you can't take advantage of one of the biggest retirement plans they have (Riesterrente, for those of you living in Germany), so you pretty much have to look into private options and none that I've seen are as cushy as the government plan.
My mom works at a financial planning center, and we've already arranged to meet up with them when we're in the US this summer so they can tell us how we're doing and give us ideas about what we should do differently so we don't have to live under a bridge when we retire...
If you've already got the accounts set up, it doesn't really. If you want to bet that the dollar will be stronger in the future than it is now, you can just transfer money from your foreign account to a US one. The problem is with opening new accounts from abroad. All the accounts we've had since we lived in the US are fine. It's when we try to invest some of the cash we've been stockpiling (because H was earning in CHF and no Swiss firm or bank would invest the money for us because the whole USA v. UBS nightmare was still going on) with brokerage firms in the US with which we have no existing relationship that we have run into problems.
I don't like to think about it because it gives me a huge headache. I know I'll never be able to retire according to the Social Security Administration, so I keep putting off thinking about it.
For the three months I was working here, I had a super fund, but I am not sure what happens to the pitiful money in there now, or if I can make an early withdrawal. My 401K in the US has a reasonable balance, but I tend not to look at the reports -- I tend to think about it as it's all on paper until it's in my bank account anyway. I have them sent to my broker and he advises me. When I am back in the US next I have to roll it over from my former employers' fund to a personal retirement account, but because it's so difficult to handle your money if you are international, it will have to wait until I am back in the country.
I do worry about retirement, and about budgeting my money better, but then I think about other things and the urge to be good disappears. I'll have to get back on track. In the US when it was just me, I was so careful and I knew exactly where all my money went. I had no debt and I felt really good. I need to get back to that feeling.
The only jobs I've ever held in the States were some minimum wage 6 hr / week kind of jobs during college. I think on my last SS report it estimated I would be getting like $0.83 / month for retirement. You can live off that, right?
No, but you could totally buy half a candy bar a month to help deal with the pain.
I started a Roth IRA when I got out of college, but I haven't put anything in since. It was invested in international funds, and has been worth less than I put into it until this year. Stupid crisis.
DH puts 30 euros a month away towards retirement. Theoretically, in Spain, the state gives you a pension, but with the state we're in, we'll see. Quite frankly, I've been putting off financial planning because I'm scared and very confused. I've been looking for expert help.
Theoretically, in Spain, the state gives you a pension, but with the state we're in, we'll see.
This. If I knew I was going to get a pension, then I would sleep better at night. Most people, in Spain do not make enough money to actually save for retirement. A lot of people have trouble making it to the end of the month. If they get rid of the pensions, I dont know how the majority of the people are going to live or be able to retire.
And the banks here suck.
I've been looking for a savings account or product for awhile now, but my bank (LaCaixa) has nothing interesting to offer. I've decided things are better in the US for now. It's hillarious, I'm earning 4x what my husband earns (they gave him a 1/3 substitution this year) but my salary doesn't officially count since it's a government grant, not a salary. (Did I tell you guys I have to be under my husband for Spanish social security since the money they're taking out of my grant doesn't count towards social security payments?)
Spain makes me want to cry sometimes.
Well as someone who has never filed a US tax return since moving abroad (in 1999!) I am clearly in the camp that you can't be both.
My real problem is that I really don't know if we'll ever live in the US again and my DH is not American. When I first moved abroad I was under the impression that I didn't have to file US taxes (which was true the first year when I had zero income). But then when I realised I was supposed to file I thought 'I better sort that out' which then turned to 'oh well maybe I'll sort it out IF we decide to move back' to 'oh boy, I'm really in the sh*t now maybe I can pay someone to sort it....if we move back'.
If we stay in the UK we'll be fine, DH has an excellent pension scheme with work and we're doing well mortgage wise. But I am sure if I went on the MM board I'd have a freak out- we never do any day-to-day budgeting and are probably getting screwed tax-wise.
This topic scares the hell out of me. At one point years ago I decided to get educated on the MM front and started reading all these books like a maniac. The result is that however little I earn a week I subtract fixed percentages from the gross earnings, so before tax. I do 15% towards the retirement fund and 10% towards the dream fund. The resulting amounts aren't big but I'm glad I found a system I can be on top of. I set a goal this year to increase the retirement saving by 2 percentage points every 6 months, so hopefully by the end of 2012 I'll be contributing 19% before tax.
I have no idea what people do in Italy. My parents taught me to handle money responsibly but that's about it.
It's a relief to see someone else mention this. Salaries in Europe for my profession are quite a bit lower than they would be in the US, even after you adjust for the exchange rate. And of course, when you are paid in the local currency and most of your expenses are in that local currency, that's the more relevant number. The disparity there is even greater.
Sometimes I wonder whether it's IN vs. US or LCOL vs. HCOL. It continues to be a real struggle for me to deal with HCOL. I grew up in the Midwest, where $200K will buy you a nice 4 bedroom house in a good school district and $300K is a REALLY nice house.
Obviously in London, that's not really the case. ?200K in our current area would get us a studio flat. ?300K would maybe get us a 1BR needing renovation and probably be below grade.
We are also looking at relocating back to a HCOL area in the US, where 1 or 2 bedroom condos start at around $400K. I honestly struggle with whether we shouldn't just give up and move back to the Midwest. My job would work there but DH's wouldn't. I struggle to see both of us work so hard just to keep our heads above water--and I struggle to see when that will change, even with both of us in reasonable careers. It sucks.
When I was in the US, I made a Roth contribution every year, but the first year I moved abroad, I got hit with the news that the Roth cut-off was calculated on your pre-exclusion income rather than the basic adjusted income line on your 1040. With my housing allowance and the high cost of living, I was over the Roth cap, even though a big chunk was excluded housing.
Meeting with a financial planner would probably be a good idea, but I don't even know where to find one that could deal with my current situation. In the past my fall-back was "retire in India" and we had enough in Indian stock to do that, but now that backup plan is toast, so I need to figure something out.
I've been meaning to ask the same question here for ages. I am comforted and disheartened that everybody else feels the exact same way I do: terrified.
Ugh, this isn't good for us, ladies. Sweeping financial planning under the rug or putting it off until "real life" begins isn't the way to go. We know that. We should be grabbing life by the balls and being proactive. Leaving our futures up to chance is a great way to fail.
Wait, so can you contribute to a Roth even though you don't have an American income?
yes we worry about this and that's exactly why we own 2 properties now - we have to invest in SOMETHING because our retirement savings after 10 years as working as contractors in London means we moved here 3 years ago with savings but no retirement funds to speak of.
we plan to continue investing in property and build a portfolio that can support the type of retirement we want to have - luckily the market is very strong here
Can you contribute to a Roth IRA?
http://www.irs.gov/publications/p590/ch02.html#en_US_2011_publink1000230977
"Generally, you can contribute to a Roth IRA if you have taxable compensation and your modified AGI (defined later) is less than [the specified limits]."
"Compensation includes wages, salaries, tips, professional fees, bonuses, and other amounts received for providing personal services. It also includes commissions, self-employment income, nontaxable combat pay, military differential pay, and taxable alimony and separate maintenance payments. For more information, see What is compensation?"
What is compensation?
http://www.irs.gov/publications/p590/ch01.html#en_US_2011_publink1000230355
You just have to have taxable compensation (wages, etc rather than just investment income), but it doesn't matter where it comes from.
The catch for me in a HCOL country or with company-paid housing, is that your "modified AGI" adds back all of your excluded foreign income/housing. So anything that was excluded from your AGI thanks to Form 2555 gets put back in, and it bumped me over the minimum threshold.
I will revisit that after I have not had a few drinks.
However I will be quite stoked if foreign earned income does count is counted as compensation, and allows you to contribute (for those of us living like locals abroad).