Filed under: Personal Finance, Moving, Retirement Living, Income Tax, Investing
In 2014, we broke that record.
According to the U.S. Treasury Department, 2,999 U.S. citizens and long-term residents moved abroad and gave up (or abandoned efforts to obtain) American citizenship in 2013. A year later, Treasury Department statistics showed a 14 percent increase in expatriations, to 3,415.
And that could be just the beginning.
The Trouble With Taxes
Reporting on the trend of more and more Americans severing their ties with America, TaxNews.com noted that July 1, 2014 was the deadline for complying with the new Foreign Account Tax Compliance Act.
FATCA, which requires taxpayers to declare assets and income owned abroad so that the Internal Revenue Service can tax them, was apparently a big reason that so many Americans decided to hand in their passports and leave the country last year.
But it's not the only reason. And folks looking to dodge American taxes aren't the only ones casting longing glances abroad.
1 in 3 See a Better Alternative
According to a new poll conducted by British money transfer firm Transferwise, about 35 percent of the Americans it surveyed would consider leaving the U.S. and moving abroad. Only about half of those surveyed, however, cited a desire for lower taxes as one of their "major" motivations.
Nearly equally important, it seems, is the view that there are better educational opportunities abroad (48 percent cited that as a major motivation, versus 51 percent citing lower taxes). Even more important was the perception that health care is "more affordable" in countries outside the U.S.
What Would Make You Leave?
While the dream of leaving the motherland and wandering strange paths abroad may be more of a daydream than a real option for some, many Americans appear to be giving a move some serious thought. If 35 percent of Americans "would consider" moving abroad eventually, perhaps around retirement age, fully 14 percent of us -- or 4 in 10 of those who "would consider" leaving the States at all -- say they would consider a move "within the next five years."
What might push them over the edge, and into action? Not taxes. Rather, Transferwise says the three reasons most often named for considering a move abroad are:
- "a better quality of life" -- 36 percent;
- "a lower cost of living" -- 33 percent;
- and just plain "to have new experiences" -- 31 percent.
Choosing a foreign country to relocate to based on cost of living alone could be problematic. Countryranker.com, for example, just published a list of the top 15 cheapest places to live. But before you get too excited, be forewarned. Six of the top 10 cheapest places to live either have ongoing civil wars or active insurgencies. A seventh is an arguable narco-state, and an eighth is at imminent risk of invasion by Russia. (And the other two are Nepal and Macedonia.)
On the other hand, if you're willing to spend a bit more in search of a better quality of life, your options may improve. Human resources consulting firm Mercer recently published its 2015 Quality of Living rankings covering 35 leading global cities. Topping the charts are:
- Vienna, Austria
- Zurich, Switzerland
- Auckland, New Zealand
And of course, if it's just "new experiences" you're after, the horizons expand even wider. Fact is, for an American seeking new experiences, a few weeks' vacation abroad may be all you need, before returning to the land of the free and the home of the IRS.
Motley Fool contributor Rich Smith is planning a vacation of his own this summer, to the Land of Disney. He wonders how hard it will be to get a visa.
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