Life abroad comes with new experiences, new opportunities, and a new set of financial considerations.
Whether you’re planning your move or have already made Europe home, it’s worth reviewing how the transition affects your overall financial picture. Cross-border tax rules, investment restrictions, retirement planning, and estate considerations can all have a greater impact than many Americans expect.
This checklist highlights the key financial planning issues to consider before and after your move, helping you identify potential challenges and make informed decisions about your finances in Europe.
Here are eight areas every American moving to or living in Europe should review.
1. Review your investment accounts
One of the biggest surprises for many Americans is discovering that some US brokerage firms restrict services once you become a resident overseas. Likewise, not every investment available in Europe is suitable for a US taxpayer.
Whether you’re moving next month or have lived abroad for years, it’s worth reviewing your investment accounts with a cross-border specialist financial advisor to make sure they’re still appropriate for your circumstances.
2. Think about taxes before making major financial decisions
Americans continue to file US tax returns wherever they live, while also becoming subject to the tax rules of their country of residence.
That doesn’t mean paying tax twice in every case, but it does mean that the timing of investment sales, retirement withdrawals, or property transactions deserves careful planning.
Coordinating US and local tax advice before making significant decisions can often prevent unnecessary complications later.
3. Make sure your portfolio reflects where you live today
Your financial plan should evolve with your life.
Perhaps you’re now earning in Euros rather than dollars. Maybe you’ve bought a home, started a family or decided to remain in Europe indefinitely.
Those changes may affect your investment strategy, cash reserves and retirement planning. Reviewing your portfolio periodically helps ensure it still supports your long-term objectives.
4. Review your banking and currency strategy
Living between two financial systems often means managing more than one bank account and more than one currency. Currency exchange rates can affect the relative value of your investments, as well as reduce the value of cross border transfers.
Rather than reacting to exchange-rate movements, it helps to have a plan for how and when you’ll transfer money, where you’ll hold cash and how you’ll meet future spending needs.
A strategic approach can reduce both costs and uncertainty. Speak with your cross-border financial advisor to discuss your currency risk mitigation plan.
5. Check your retirement planning
Retirement planning becomes more complicated when pensions, investment accounts and future income span more than one country.
Review how your US retirement accounts, local pensions and Social Security contributions fit together as a cross-border American, and whether your overall retirement strategy still reflects your evolving plans and where you expect to live in the future.
6. Update your estate planning
Moving abroad is a good opportunity to review your wills, powers of attorney and beneficiary designations.
As your assets become spread across different countries, your estate plan will also need to evolve, and you will typically need a will in every country where you either are a tax resident or have assets. Some European countries have forced heirship rules for residents that can limit your ability to bequeath your assets as you might like with reserved portions for spouses and children. A review can help ensure your wishes remain clear and your documents continue to work as intended.
7. Build the right professional team
Financial planning rarely happens in isolation.
Many Americans living abroad benefit from coordinated advice between a cross-border financial adviser, US tax adviser, local tax adviser and other specialists such as international estate planning attorneys and immigration attorneys.
Having professionals who understand the cross-border aspects of your situation can make decisions simpler and help avoid conflicting advice. We can help you connect with the right professionals for your situation.
8. Review your plan regularly
Your financial plan shouldn’t be filed and forgotten once it has been created, it should evolve alongside your life.
Changes in tax rules, residency, employment, family circumstances, or your financial goals can all affect the way you save, invest and plan, especially for cross-border Americans.
Regular reviews provide an opportunity to assess what’s changed, make any necessary adjustments, and ensure your plan continues to reflect your situation and objectives.
Planning ahead makes all the difference
Every family’s circumstances are different, so this isn’t a comprehensive or universal financial checklist for every American abroad.
However, reviewing these areas regularly can help you anticipate and intercept potential issues before they become problems and ensure your financial plan continues to support the new life you’re building in Europe.
At EuroAmerican Financial Advisors, we specialise in helping Americans moving to or living in Europe coordinate their investments and financial planning across both sides of the Atlantic.
If you’re preparing for a move or would like a second opinion on your existing financial plan, schedule a call and let’s have a no-obligation conversation.
If you have any questions about financial planning or investing as an American living in the EU, get in touch.
This article is for informational purposes only; it is not intended to offer advice or guidance on legal, tax, or investment matters. Such advice can be given only with full understanding of a person’s specific situation.
