The following transcript was generated by AI and may contain inaccuracies.
Carlie: Hello there. It’s Carlie with the Expat Focus Podcast. If you are a US citizen looking to make a move abroad, how do you get your money out of the USA? Well, Tom Zachystal joins us again to talk through your options. He’s also going to explain why sometimes it’s actually better to leave your investments right where they are.
Tom, it is our first chat of 2026. Welcome back to the Expat Focus Podcast.
Tom: Thank you. Another year, another podcast.
Carlie: And of course, you are the President of International Asset Management at IAM Advisors. Tom, I am a bit of a lurker on the expat Reddit and a few other forums, and I see a question come up from Americans looking to move abroad quite a lot, and it is around money — and how they can live off their American income, investments and assets while in another country.
I am curious, first of all, what is a difficulty for US citizens in particular when it comes to living in one country and earning money in another?
Tom: Well, we get this question a lot — how to get your money out of the USA these days.
So what is the difficulty? Let’s take an example of an American who moves to Europe permanently, for retirement maybe. They’re going to be spending their money in euros, right? But probably a lot of their savings is in US dollars. It’s certainly in US accounts.
They might have US retirement accounts, for example, or other pension accounts. Their Social Security is going to be paid in US dollars if it’s coming from the US. They might have annuities — those will pay in US dollars.
Carlie: And when the exchange rate is good, this is a great thing, right?
Tom: Exactly. That’s the thing. The dollar has been weakening versus the euro recently, versus a lot of currencies. And so that means you get less bang for your buck if you’re spending in euros, but your savings are in dollars. And of course it works the other way too — for a while there, the dollar was strengthening and you got more bang per buck.
So that’s generally the issue. The thing is, it’s not like the stock market — major currencies don’t keep going in one direction. They’re what we call mean reverting, but they can be mean reverting over a long period of time, sometimes 10 or 20 years.
So you could have this weakening trend for quite a while. It’s almost like extra inflation to you if you’re spending in euros but your savings are in dollars and it’s weakening.
Carlie: Can we talk firstly about what you mean when you say getting your money out of the USA?
Tom: People mean different things by that. A lot of people just come to us with the question, “I just want to get my money out of the USA,” and then it’s really — well, do you actually want to get the money physically out of the USA, as in a non-US account? Or are you just worried about the currency effects and you want to get the investments out of the US dollar?
Because those are two very different questions. There are lots of reasons why people might want to get their money out of the US. People these days are worried about the political climate there. Some people are worried about confiscation, although honestly I’d be a little more worried about that in some other parts of the world.
But if you physically want to have a non-US account, that’s a lot more difficult than just getting your money out of the US dollar into euro-type investments. It’s possible — let’s say you move permanently to another country. You’re going to open a local bank account, and then you can move money back and forth.
It’s easy enough and you can convert the money and keep euros, or whatever currency you’re dealing with, in that account. What’s more difficult though, for Americans, especially for US citizens, is to open non-US investment accounts — accounts that are physically outside the US — because many of the banks and especially the non-US brokerage firms don’t want to deal with US citizens because of the FATCA reporting they have to do and all the tax loopholes, and they have to report back to the IRS on the accounts and so on.
Carlie: In what scenarios do you think it could be more advantageous to look at a non-US investment account and make those moves to get your money out of the USA?
Tom: Generally what we recommend for US citizens living abroad is actually to keep your investment dollars in US accounts, because you get the tax reporting forms — the 1099s and so on. You also get SIPC protection, which is $500,000 per account in the US, but it’s much lower in most of the world.
In Ireland, it’s €20,000. I think in most of Europe it’s €100,000 or less. So that’s also a consideration for some people.
But to the extent that you can open a non-US investment account — first of all, they’re hard to come by. Secondly, the fees tend to be higher on these accounts. Outside the US it’s kind of like it was in the states back in the eighties, where we had front-end loads on mutual funds. And typically they’ll have things called platform fees — for the trading platform — and then advisory fees, and then layers of three or four fees that could add up to maybe 3% a year.
Whereas the US is a very competitive financial marketplace and your fees tend to be much lower. I already mentioned they may not provide the US tax forms, but then another big consideration is that outside the US, investments are still very much mutual fund-based for most parts.
Things like UCITS, as they call them — those kinds of things. And those will create a US tax reporting issue, because they are what are called PFICs in the tax code. Unless they’re in a pension account, in a regular brokerage account there would be a PFIC and that would create a nasty US tax reporting issue for you.
So that’s another problem. It’s okay to invest in things like cash products outside the US, individual stocks and shares. But generally what we recommend is — if you’re a US citizen abroad — keep the investments in the US. And then if you want to have some money outside the US, maybe you use banking products like term deposits, savings accounts, high-yield savings accounts, those kinds of things.
None of those are PFICs.
Carlie: Even if you do use term deposits or savings accounts outside of the USA, are you still obligated in your tax filing to declare them to the states?
Tom: Yeah. You have sort of two obligations — one under FATCA and one which is called an FBAR form. The FBAR form is for non-US accounts over $10,000 — and it’s $10,000 in aggregate.
So you can’t put $9,000 into a million accounts or something like that. It’s $10,000 in aggregate. If you’re over that at any point during the year, you have to report all your non-US accounts. That’s called FBAR — that’s actually a Treasury form. It’s called FinCEN 114 now, I think. But if you do a web search for FBAR, it’ll come up.
And then the other form that sometimes might apply is the FATCA form, which is Form 8938, and that has to do with non-US assets. You would also have to report if you had a foreign company or something like that on that form.
Interestingly, you don’t have to report real estate on that. So that’s something that some people consider — as long as it’s not rental real estate. Rental real estate is like business income, so then you have to report it on an 8938. But if it’s just a property that you use or that you’ve bought as a second home or something like that, there’s really very little — no tax reporting on that until you sell it. And then there’s maybe a gain.
Carlie: Well, that brings me to real estate, Tom. I’m curious, what do you have to do if you plan to live abroad but keep real estate investments in the USA?
Tom: Again, it depends whether it’s rental real estate or just a property you own that maybe isn’t rented. Maybe your family’s living in it — your parents or something like that.
But if it’s rental income, then you’ll have to report the income, and typically you would report that on both sets of tax forms — the US forms, as well as the local forms. And then it just depends on the tax treaty, where it gets taxed.
Some tax treaties will say they don’t care about non-local income, and so they won’t even tax it. But in many tax treaties, you would pay tax locally on that rental income, even though it’s in the US.
The other thing that comes up is even if it isn’t rented — at some point, maybe you’ll want to sell it. And then what you have to worry about is the capital gains. Because in the US, if you sell a property you live in for two out of five years, you get a capital gains exclusion — $500,000 if you’re filing jointly as a married couple, $250,000 for filing individual.
You get this capital gains tax exemption, but if you now live in another country, there’s going to be the local taxes to think about too. They typically will not have this exclusion. It might be a taxable event locally. You may have to pay tax on those gains locally. So that’s another thing to think about.
Carlie: Definitely. And does that also factor in when US citizens are deciding where to move abroad? I imagine if you do have quite a portfolio or significant investments in the states, you might look at how that’s treated in certain countries before you decide which one is ideal for you.
Tom: Well, it’s possible, but I always tell people — if you’re moving overseas, especially if it’s for something like retirement — don’t let the tax tail wag the lifestyle dog, so to speak.
You’re moving there for a reason. You’re probably going to pay taxes on gains. The nice thing about taxes is you typically don’t pay them unless you’re making money, right?
Carlie: It’s a privilege.
Tom: Yeah. So maybe it’s not so bad. But for some people it might make a difference. Taxation things in general would make a difference. For some people it’s a wealth tax, for example. Some countries like Spain have a wealth tax, and that could be a substantial chunk. If you have a lot of property or a lot of investments, that wealth tax can bite you.
And even in Spain it’s regional — AndalucÃa, for example, has no wealth tax. And Catalonia has the highest wealth tax. So it all depends on your situation. But I would say there are other considerations as well, not just taxes.
Carlie: Can we talk about some other types of investments? We spoke about real estate, but there’s also ADRs, ETFs, currencies.
Tom: Yeah, that’s right. This is kind of in the bucket of “I want to get my money out of the US” — and what that means for me is that I want to have non-US dollar investments, but I don’t necessarily need to get the account out of the US. For most people, that’s really what they’re talking about.
Even in a US account, we can buy non-US exchange-traded funds. Typically, if you live outside the US you can’t buy US mutual funds, but you can buy exchange-traded funds. And to the extent these exchange-traded funds invest outside the US — they might hold European stocks, or Indian stocks, or Chinese stocks — as long as they’re not hedged back to the dollar, meaning they take out the currency effects, you still get that currency effect.
For example, if you have an ETF that’s trading at $10 a share, and it’s invested in European companies, and it’s not hedged back to the dollar — even if the value of those underlying investments doesn’t go up, but the euro strengthens, then you’ll see the value of that fund as reported in US dollars increase. You get the benefit of that increasing euro. So that’s one way to do it through ETFs.
ADRs are American Depositary Receipts. They’re essentially shares of non-US companies that trade on US exchanges. So there you’re getting the exposure. Take a company like Nestlé in Switzerland, or TotalEnergies in France — they trade on the local exchanges primarily, but they also have these ADRs that trade in the US, and for US investors they’re easier to buy than buying on the European exchanges.
I should mention that we use two custodians to hold our clients’ accounts — Charles Schwab and Interactive Brokers. Schwab, like most US brokerage firms, isn’t great at dealing with non-US investments.
But Interactive Brokers offers multi-currency accounts, the ability to trade on non-US exchanges. We have portfolios set up in euros for our European clients who want that. And with Interactive Brokers, if you live in Europe and it’s a taxable account — an individual or a joint account — it would be in Ireland. So it actually wouldn’t be a US account, for people who want to have an account outside the US.
Carlie: I see on your notes we also have precious metals — gold, silver, collectibles, crypto.
Tom: Yeah. Crazy times and volatile investments. Gold itself is quite volatile, but silver is like gold on steroids, basically. And while everybody knows what crypto does — up and down.
Gold generally seems to do well in times of uncertainty — when there’s conflict in the Middle East, or right now everybody’s worried about US policies, whatever they may be, changing from day to day. A lot of uncertainty out there.
And also I think people want to diversify out of the US dollar a little bit, and gold is one way to do that. We’ve also seen that one thing driving gold quite a bit over the last few years has been central banks — they’ve actually been buying more and more gold deposits and putting their holdings into gold.
So that’s been driving it. And then the fact that there are these gold exchange-traded funds and everyone’s piling into them, and they have to buy gold as well, because some of them actually hold physical gold and they have to buy it to support those investments. So gold has done really well.
Silver is, from an investment perspective, pretty much correlated to gold, but it has way more volatility. When gold goes up, silver goes up a lot more, and the other way around as well.
The interesting thing is what we saw — because gold has been going up for a few years, but the stocks of the gold mining companies didn’t go up right away. So it was actually a good investment about a year or a year and a half ago to buy shares of some of these gold mining stocks. And now they’ve done really well — they’re up like a hundred percent last year or something like that.
So there are different ways to invest in gold and silver. You can buy gold bullion, you can put it in a safe somewhere in Switzerland if you want. The easiest way is usually through gold exchange-traded funds. And then you can also buy shares of gold mining companies.
Carlie: I definitely want one of those Scrooge McDuck vault situations where I could just swim in my gold when I feel like it.
Tom: Yeah, well, you should go visit it every now and then just to make sure it’s actually there.
Carlie: I really want to meet someone with a stash of physical gold and just see how they keep it. Tom, I find that fascinating.
Tom: Yeah. Well, the other thing you could invest in is coins. There are companies that sell various types of gold coins minted by various mints — the London Mint does a lot of this, for example.
So there you have not only the gold aspect of it, but the collectible aspect of it, which sometimes works out.
Carlie: Yeah, definitely.
Tom: Now I should mention, for US people, these are taxed at a higher rate. The capital gains on what are called collectibles is higher than the regular capital gains tax rates. So that’s another thing to bear in mind.
Carlie: What about Beanie Babies?
Tom: Beanie Babies? I don’t have a lot of experience in that. That’s probably a different podcast and a different person.
Carlie: I was watching a reel the other day online, and it was a woman who uncovered in her dad’s hoarder house her entire collection of Beanie Babies from the nineties, because her parents were convinced — and everyone at the time was convinced — that this would send their kids to college. These collectibles in mint condition, tags still on.
And I feel like it’s that time now where my generation is uncovering the stash of Beanie Babies that the parents might have kept for a rainy day that never eventuated.
Tom: And has it been a good investment? I have no idea.
Carlie: No. We went through the Beanie Baby bust, for sure.
Tom: Right. Well, that happens. Back in the original bust was the tulip thing in the Netherlands back in the 1600s and the tulip mania.
Carlie: Oh, they started it all.
Tom: The tulips went up. Yeah, they started it all.
Carlie: We’ve gone from there to Beanie Babies.
Tom: We’ve gone from tulips to Beanie Babies.
Carlie: No, I’m pretty sure it’s like the Booboos these days or something that I’m steering very clear from. Can we talk non-US bank products?
Tom: Yeah, non-US bank products. It’s kind of a short conversation because what we’re talking about are basically the equivalents of — in the US we would have CDs. Some places have similar CDs, or you can have just a regular term deposit where you lock up your money for a few months and you get paid a higher interest rate. Sometimes there are high-yield savings accounts, things like that.
In Mexico, there are also treasury bonds. In some places in Mexico, they call them CETEs, for example. So there’s a T-bill market in certain places.
Those kinds of products are obviously very conservative, at least in local currency terms. They allow you to get a bit of a higher interest rate than just sitting in cash. But the biggest thing is you take out the currency fluctuation if you have your investments in US dollars and you’re spending in another currency.
From a financial planning perspective, maybe you want to keep up to a year’s worth of your expenses in these kinds of products in your local currency. And then you draw down on that, and when you need more money, you exchange it — hopefully at a good rate.
I should also say that a lot of studies have been done on what are called sustainable withdrawal rates in retirement. You have a pot of money in retirement, and how much can you take out a year and not run out of money?
Carlie: How much is it, Tom? What’s the magic number?
Tom: It’s 4%. A rule of thumb is 4%. It’s always been that, and that’s based on studies done over 30-year time spans. Even if you retired the day before the 2008 stock market crash, you’d still be okay if you took out 4% a year.
So that’s what that’s based on. But there’s been a lot of research on it lately, and the way you can get that up to five or even higher percent is just common sense. You take out more money in a year where you’ve had good investment returns, and less money in a year where you’ve had bad investment returns.
It’s like dollar cost averaging in reverse. And if you take out more money, maybe you don’t need it right away, and then you convert it and keep that money in these cash products and spend down on that. So that’s one way to optimise retirement income.
Carlie: And finally, can we talk private equity?
Tom: Yeah, private equity. We don’t actually invest in private equity ourselves on behalf of clients. But there is a lot of private equity out there. It’s called private equity because it doesn’t trade on a public exchange. Typically it’ll be something like a partnership that you can invest in, and there are lots of companies that do this kind of thing.
You really need to do a lot of research, because if you invest in a company that trades on a stock exchange, they’re doing quarterly earnings calls. They have all kinds of stuff they have to file with regulators that you can look at. You can see their stock price on a daily basis, on an hourly basis.
Private equity isn’t like that. But if you get the right private equity, the returns can be pretty good too, because some of these managers are really good at what they do. And it’s much more dependent on the quality of the manager in private equity, as compared to investing in public markets where it’s really more about the asset allocation.
So you need to do lots of research. Your money’s probably going to be locked in for a certain period of time — sometimes a seven-year time span, a five-year time span, for example, if they’re going out and buying real estate.
You can’t just sell a house every time one of your investors wants to get money out, so there’s a lockup period typically. And along came these things called interval funds a few years ago. Interval funds were supposed to be some kind of private equity, but you could get your money out on a quarterly basis.
Beware of these — know what you’re getting into, because the way they’ve been sold is, “Oh yeah, every quarter there’s a liquidity event, you can get your money out.” Well, no. Typically by law they have to make 5% available every quarter for withdrawals.
So what that means is that if everybody wants to get their money out — which would be the case if there was some kind of a panic — you’re probably only going to get 5% out every quarter. Now, if nobody else wants to get out and you’re the only person, well then maybe you’ll get a hundred percent out, because it’s 5% of the big pot, not just your money.
So that’s what an interval fund is, and just be aware of what you’re getting into with private equity.
Let me actually mention one more thing on that, because there’s also publicly traded private equity, which is what are called Business Development Companies, or BDCs. We invest in these — we have about three of them in the portfolio.
What they are is a company that goes out and privately invests in maybe 200 smaller companies. These are riskier investments, but they spread the risk over maybe 200 of them. They make loans to these companies or take equity positions, and then these companies have to pay a higher interest rate because they’re risky. These interest payments flow through to you as the investor in the form of dividends.
It’s a flow-through entity — like a Real Estate Investment Trust, but called a Business Development Company. These can have dividends of maybe 10% or so. For people who want dividends, this is why we invest in them. They go up and down with the stock price, but they do trade on public exchanges just like any other stock.
Carlie: Tom, it sounds like there’s a lot of evaluation that you need to do when you are considering getting your money out of the USA — and in some cases, keeping it exactly where it is is the best thing to do.
Tom: Well, I’ve been doing this for 25 years, dealing with expats regarding investments, and I’ve heard some pretty good stories.
For example, about a decade ago, somebody came to me and said, “I’m moving. I don’t believe in the US anymore. I think it’s really…” — and this wasn’t even a Trump thing. This was somebody else at the time.
Carlie: You have to qualify.
Tom: Wasn’t even a Trump thing. I mean, there’s always somebody who’s upset, right? And so what he told me was, “I’m taking all my money out of the US because I’m afraid it’s going to be confiscated. They might take away my 401(k) or something like that, and I’m going to move it all to a bank in Uruguay.”
Uruguay is actually a fairly civilised place — I’ve never been there, but so I hear. It’s fairly stable. But if you think you’re somehow going to get better protections in a bank in Uruguay than you will in the United States, then you’ve lost your mind, basically.
It’s always important to realise — as Americans, we see things going badly in the US, but a lot of the world would rather have their money in the US than anywhere else, because they consider it a pretty safe place to invest.
Carlie: I didn’t actually realise the thresholds in Europe — some of them are much lower than the protection thresholds in the states too, for some investments.
Tom: Yeah, that’s right. And then there are also things like currency devaluations. Mexico has had several currency devaluations. Argentina is another example. Even the UK had a currency devaluation way back when. And then when Brexit happened, the currency took quite a beating — pretty much overnight.
So there are also currency devaluations to think about, especially in some of these emerging market countries.
Carlie: And where can people find you if they do want to sit down with you and look at their accounts — or maybe check out the gold vaults?
Tom: Check out the gold vaults! Well, I’m out there on the internet. If you Google my name, you’ll find me. But our website is iamadvisors.com — that’s iamadvisors.com. There’s a contact page there and people can always find me through that.
Carlie: Great, Tom. Well I’m sure we’ll be chatting again over the course of this year. Thanks for being on the show.
Tom: Alright, nice talking to you.
Carlie: That’s it for this episode. If you are looking for trusted advisors to help you with everything from financial planning to international health insurance, moving pets internationally, making money transfers and more, just head to expatfocus.com, hit the Services tab, and explore our partners.
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