Shezi59

After 8 years living in the US (3 years as a USC), we're planning my husband's retirement next spring/summer which includes moving back to the UK. I'm already retired. In an ideal world, we'd share our time between the US and the UK but there are some serious financial considerations around accommodation and healthcare to think about. In terms of logistics, we have a house there already (mortgage free); we could choose either category C or category D for financial requirement - or a combination of both. We're looking at the cost of each scenario. The bulk of our retirement income is in IRAs (most of it in a Roth), but there are also 401Ks, pensions and social security. We really don't want to pull money out of IRAs to sit as cash savings in a bank account, thereby losing any further growth on it. Though that would make us 'application ready' in 6 months. The three remaining options seem to be to sell the house a little earlier than we intended to and use the equity for category D, start the process for social security a little earlier which will cover the requirement for category A, but not by a ton and is subject to the vagaries of exchange rates (I already have a teacher pension in payment in the UK, can we combine them, if we need to?) and thirdly, we could delay applying.

Each has its pros and cons. There are still backlogs in biometric appointments, which obviously delay the visa application process. The COVID situation looks like running well into next year so that may not change. We want to minimize our stay in the US once the house is sold and my husband retires but much of that is a fluid situation. It's not an ideal scenario to start retirement in when our main goal is travel

I would appreciate any thoughts experiences, feedback. This site has already given us so much information on my own immigration journey, I wanted to tap back into it for the return journey.

Thanks guys

SanDiegogirl

So your husband is a USC ? (just clarifying)

Shezi59

Sorry, yes - I meant to say that at the top. He's a USC.

SanDiegogirl

It looks like you have the financial requirements covered by either non employment income (Cat C), Savings (Cat D) or a combination of both. so its mainly a question of timing.

You mention maybe using equity from the sale of your home. If you did this you would not need to have held the money from the sale for 6 months. As long as you have owned the house for 6 months or more you would be ready to apply as soon as the money was available.

GOALFIRE

I was unaware of that rule with respect to using equity from a home sale, thanks for sharing that. Does a similar rule apply to investments by chance? We have investments we've held for years that exceed the savings requirement, could we liquidate some of these at the time of application and still meet the Cat D requirement?

durham_lad

Your Roths are tax free growth and withdrawals in both the US and UK, which is great. Once in the UK your SS is taxable only in the UK.

401k providers are often difficult to deal with once you live overseas so I would check with them ahead of time and possibly roll them over to an IRA in a brokerage that is accustomed to servicing overseas customers. This will be a tax free event.

Shezi59

Cheers SDG - yeah, we were aware of that rule - it's definitely a pro, my hesitation is really that we can't start the application process until we close on the house - but it might be a non-issue.



Goalfire, you can liquidate assets from investments up to application and use them IF you have the paperwork showing that they have been in your name and you've had control of them right up to liquidising - for a total of 6 complete months. You'll also need bank statements showing the cash deposit (how many will depend on how long the deposit was in the bank). The 6 months will be a combination of funds held as investment and cash funds held in savings.



Thanks DL, we're in the process of rolling the 401K into a traditional IRA to be held with the other IRAs, but I appreciate your point. We'll be moving the Roth but we're still investigating places to put it. We were interested in a point you made in another post about Vanguard - 2 of our IRAs are currently with Fidelity, we like them but we're seeing limits as an overseas client. We're also looking at Schwab, if you know anything about them.

Note - I see a typo in my original post but can no longer edit - where it says 'category A', it should (obviously) say 'category C'

durham_lad

We used Fidelity for a lot of years and really liked them. My wife’s traditional IRA, Roth and rollover IRA were with them. (She retired a few years before me and rolled her 401k to an IRA in 2004). It has been 5 years since we contacted them about us living in the UK. If you like them then it will be worth contacting them ahead of your planned move to see what they say. In our case when we decided to move her accounts to Vanguard then it was extremely easy to do, all done online and/or email.

I have also used Schwab in the past and been very happy with them, they were the custodians of my 401k up to a year or so after I retired before rolling it to Vanguard. Schwab do have a presence in the UK so they may also be good for USCs living in the UK, but I don’t know for sure.

We have also kept a US bank for ease of our US pensions being paid into them and for transferring money to and from Vanguard and for paying US taxes or claiming refunds. The US bank also knows we live in the UK and has our UK address on record, although we are “paperless” on everything including statements.

When we start collecting SS in 2022 we plan to have it paid directly into our UK bank. SS is only taxed by the UK as per the tax treaty. Not sure if OAP is only taxed by the UK or whether the IRS takes a chunk and we have to claim foreign tax credits. That will be tax year 2021 so I guess I will find out soon enough.

Shezi59

We actually had a zoom meeting with them last week, which was extremely productive. They know our plans and don't have an issue with it but they can't manage for overseas clients. My husband prefers self-direct anyway. He had a tutorial on their online tools a few days ago. They do have some restrictions around buying funds that we're investigating. Do you mind telling us why you prefer Vanguard? What do they have that the others don't, kind of thing?

GOALFIRE

I have Vanguard but will move from them before moving to the UK. When I called them to see if they would have any issue with me moving they said they don't support overseas clients and I could only sell from my account once I moved, or updated my records to indicate I'd moved. They said if I remained a resident (as in still have a US address) while I was overseas it would not be an issue. When I probed this a bit more they were a bit vague but the feeling I got was if I have a US address on file it would be OK. It just seemed a bit precarious to me so I've decided to move to Schwab or Interactive Brokers who will support overseas customers and I won't have to lie (or impose on a relative) about having an overseas address.

durham_lad

I have been with Vanguard since 1995 so know them very well, self directed, never used an advisor with Vanguard or elsewhere, but do use their portfolio analysis tools, plus their index fund fees are razor thin. Both my wife and I had been retired for 6 years before we moved back so are very much in the distribution phase and I do sell and buy between our funds about once a year to maintain my target asset allocation.

From what Goalfire says then you will be restricted from buying new funds, not something I have tried to do. I let our funds do their quarterly distributions into the Vanguard money market fund, then transfer what we need to supplement our income and buy shares of the funds we already own with what we don’t need that year.

Shezi59

We've actually just had a conversation with Schwab this afternoon, it's the same deal. It's a UK regulatory thing, it sounds like, can't buy funds, can only sell, once we're UK resident. We're obviously going to run into this everywhere. I completely agree with you re the issue of holding a US address on file and not being resident here. I wonder what the IRS implications of that might be.

blitzin

Shezi59 - great thread!
Durham_lad - I have a question for you about something you just said...
(thanks for sharing all that you did above, btw) In talking with both Fidelity and Schwab this week they have told us that we can't buy new funds in our portfolio but we could maintain existing ones with them. Schwab said dividends couldn't be re-invested and had to go to the Money Market account - which I think is something you said you were doing with your dividends too. But - when you refer to '...selling and buying between funds...' - are you saying you've been allowed to move money back and forth between existing funds with Vanguard? Thanks in advance.

durham_lad

Yes, I do move money between funds within my Roth and IRA plus I have made several IRA to Roth conversions while we have been in England. I just checked my account details and our street address is here in England. However I do have a correspondence address which is our daughter in California so maybe that makes a big difference even nothing has ever been sent there.

off to bed now....

GOALFIRE

Interesting, when I spoke to Schwab (it was an IM exchange not a 'proper' call) they said that I'd open a US Schwab account and then when I planned on moving they'd transfer that account into an 'international one' and I'd be able to trade normally. I've just started my research as I've got a bit of time on my hands before our move.

Not to turn this into an investment thread but one option I have considered 'if' I have to keep an account that I can only sell or receive dividends is to convert all my IRA's into 'all in one funds' then I'd not have to worry about rebalancing and ride out the ~8 years until I can draw on them with my total stock market ETF funds as I'd not want to convert all them as it will result in a big taxable event for me.

Given that Thanksgiving and Xmas are a bust this year I've dedicated that time to do a bit more planning and research on the financial aspect of the move.