3 Tax Tips to Help You Retire Overseas the Right Way

After chasing and living the American dream, more and more Baby Boomers are considering retiring overseas. According to Travel Market Report, 3.3 million of America’s 78 million Baby Boomers say they are interested in retiring abroad. It’s a growing trend that is motivated by either the desire to develop a second home and financial situation or the need for a lower cost of living to be able to retire early or retire without working.  In fact, approximately 7 million Americans file an expat tax return and millions more are no longer required to file a U.S. tax return due to their reduced income.

If you find yourself in one of these two boats, the good news is that retiring overseas is certainly possible and with good planning, can be very rewarding.  Sitting down with a tax and financial professional with experience in international tax is the best first step.  Making sure that your financial house is in order ensures that you will experience the retirement of your dreams. Typically, at Money Concepts, we start working with clients about 18-24 months before they move abroad to make sure that they have their tax and financial worlds in order.  The IRS especially targets U.S. expats with additional reporting requirements and draconian penalties so we help our clients make sure that they do not have to worry about any IRS surprises when they are abroad.

Money Concepts advisor, Nick Hodges, CPA/PFS, MBA, CFP, CGMA, shares the three tax tips he always talks through with prospective expats:

• Leave from the “right” state: You could save a bundle on state income tax and avoid future harassment from state authorities by making your overseas move from a “no income tax” state. But you have to establish residency there before you leave the U.S. There are nine “no income tax” states you can consider: Florida, Alaska, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. Move to one of these before you head overseas and you can save significantly. 
• What you need to disclose: There are as many as six additional federal tax disclosure forms when you move abroad. While these forms usually don’t change your U.S. income tax amount, each form carries a minimum $10,000 per year penalty if not correctly filed. 
• Keep important documents safe and accessible: Most of us keep our important documents in a safe deposit
box or filing cabinet. But when you need them abroad, consider scanning
and saving your files to a USB-
or thumb-drive. Alternatively, you can employ a secure, online storage for your important documents and data, which you can then access from anywhere in the world.

If you are considering retiring overseas, make sure you have a firm grasp on your tax and financial situation, a strong sense of adventure and adaptability, and the willingness to exchange some U.S. comforts for the exotic offerings of foreign locations. 

For more information, we encourage you to contact one of our financial advisors and take a look at the following resources:

•  www.Expatcfo.com
•  56 Questions You Need to Ask Before You MoveAbroad
• How U.S. Expats Can Avoid the 13 Most Common Expat Tax Traps
• ExpatTax Lesson Learned from the Gorillas of Rwanda

Sources:
Nick Hodges, CPA/PFS, MBA, CFP, CGMA

3 Reasons That Will Make You Rethink Your Need for Life Insurance

When was the last time you really thought about your life insurance policy or reviewed your life insurance needs? Chances are, if you don’t live in the world of wealth management like us, it’s probably been longer than you’d like to admit or perhaps it’s never even been more than a fleeting thought. You know, one of those, “I probably need to check into that soon”. Well, the reality is that life insurance can often be misunderstood, misconceived or altogether avoided, but when armed with the right information and resources, life insurance becomes a valuable tool in your financial plan.

What is the importance of having life insurance? It’s the peace of mind you get from knowing your loved ones will be taken care of – it can pay off debts and loans, help fund a child’s future education, or provide a steady source of income for family members. And while many Americans see the value in life insurance, less than half actually have life insurance policies – 95 million adult Americans to be exact, according to industry research group LIMRA.

If you’re within that group, we want to provide you with three reasons why you should rethink your decision and add a life insurance policy to your coverage:

1. Income Replacement. This the most basic purpose of any life insurance policy - replacing your annual income until the age you would have retired. When you have lost your ability to get out of bed and go to work, how will you survive without your income? From here, you should be able to determine how much life insurance you need.
2. Protecting and Taking Care of Loved Ones. Consider whom you are leaving behind and how they will be impacted by the loss of your income. Your spouse and your children are the most important part of your life. It goes without saying that you would do anything to ensure their comfort and safety. Financially, you should be able to say the same.
3. Tax-Free Wealth. You have the ability to build up tax-free wealth that you can use either during your lifetime or to be passed on to your heirs. If you build a variable universal insurance policy correctly, you can use it as a big Roth IRA. Post-tax money goes in, but the money grows tax-free and can potentially be pulled out tax-free.

“Life insurance is a financial product like so many other financial products. It is sold out of fear or need instead of out of good solid mathematics,” comments Money Concepts Financial Planner, Christopher Puffer. “Take this into consideration: Life insurance is the only investment vehicle that can guarantee a sum of money to be available when the most critical bills are due.”

Your policy isn’t a gamble; it is a vital part of the economic plan to keep your family financially secure. If you are underinsured, we strongly encourage you to seek the financial protection you need today. Keep in mind the following questions when determining your life insurance options: 

• What is the need for the insurance?
• How much do you need?
• How long of a term do you need on the policy?
• Explore your options thoroughly. Don’t make price your only deciding factor!

When life throws you a curve ball, you want to be prepared for it. Be proactive and select a licensed financial planner to serve as your trusted advisor now and in the years to come.

Sources:

Christopher Puffer, Financial Planner

http://www.lifehappens.org

http://www.limra.com

Why We Need More Women In Investment [INFOGRAPHIC]

In a country where women are expected to control two-thirds of consumer wealth in the U.S. over the next decade and to become the recipients of the largest transference of wealth in our country’s history, it’s surprising to see the lack of women within the investment industry. Perhaps even more shocking, is the industry’s response to it.

Let’s take a step back and get a sense for the role of women in the financial services arena. Within our industry, women make up only about 30 percent of the total populace of U.S. investment advisors. At hedge funds, women fill fewer than 20 percent of C-level positions. And at venture capital and private equity firms, only 13 percent are made up of females, who fill only 12 percent of C-level desks.

This begs the question, where have all the investment women gone?

Money Concepts financial advisor, Susan Sukys, weighed in on the topic, “The industry has historically been predominantly male, so there's a natural time delay for women entering the industry… The same evolution has been seen for physicians, attorneys and other professional, formerly male-dominated professions.” In many instances the world of financial services is still perceived as a scene out of Mad Men, a boys’ club of sorts. Financial advisor Rebecca Muller adds, “It’s a field that women typically are steered away from. I think it’s a cultural thing that is slowly being overcome.”

Fortunately for us, Money Concepts advisors like Susan Sukys, Rebecca Muller and Cheryl Boyer have chosen the path of financial service in order to educate and empower clients to make the financial decisions that will help them live more enriched lives. “Women bring to this industry a natural tendency for nurturing relationships which is conducive to building effective and profitable client-financial planner relationships,” said Boyer. They encourage other women to join their ranks.

What would it take for more to follow in their footsteps? Our advisors felt that if women were more knowledgeable about the profession and what it means to be a true financial planner, the more they would be drawn to be a part of it. Popular media often negatively spotlights the moneymaking side of the industry; but, there is a more holistic, sharing-of-information approach to this profession that supports clients in their goals, building their path to success personally, professionally and financially - and that is what needs to be seen. The more women who enter the field, the more role models will be created for young women to emulate and hopefully, over time, the balance on the scales will shift and the gender representation within the industry will be equalized.

Sukys noted, “This field is immensely rewarding, but challenging. It is not for the faint of heart. You are an advocate and guide for individuals and families with financial goals, which ultimately can add significantly to their quality of life, not just in the present, but also for future generations. It's a privilege to partner with clients on these impactful goals, and you'll want to be prepared to shoulder that rewarding responsibility.” And if that’s not enough, Muller points out that the flexible work schedule allows financial advisors to enjoy an engaging and impactful career, while still being available to your family. So not only is a career as an advisor personally and professionally rewarding, it will also provide you and your family with the resources to do anything you want to. “The short answer - Join us and Just Do It!” she exclaims.

The 3 Things Every Financial Advisor Needs in a Partnership

As a financial advisor, your first priority is helping guide your clients on a clear and coherent path to financial success. As an entrepreneur, you want to grow your business and expand your reach. At Money Concepts, we understand these needs, and our mission is to be the partner you choose to help you reach these goals. We do that by offering you these 3 things:

1)    Entrepreneurial independence. A vital part of Money Concepts’ partnership is the complete independence you have when it comes to your business. We exist to supplement your resources, not buy out your hard work, by giving you a large selection of proven tools and techniques for success. You’ve put the time into building your brand. Our advisors are able to continue working with us under their own brand.

Barry Dayley, CFP, Executive Vice President explains, “Money Concepts was built on entrepreneurial ideas, and that’s one of the attractive points. That entrepreneurial spirit is alive and well.” Structured flexibility is a large part of how we approach our relationship with our advisors. We offer a wide variety of tested and proven tools, but our partners enjoy full autonomy in how they choose to apply these programs and ideas.

2)    A strong support system. We operate by the phrase “You’re in business for yourself, not by yourself.”  As an independently owned Broker Dealer, we believe our partners need independence but also encouragement. We are constantly seeking to learn how our programs and instruments can be developed to better serve our financial family’s needs. No matter if you’ve been working with Money Concepts for two days, two years, or twenty years, your voice will always be heard. We operate with a culture of trust and cooperation, and our advisors are a valued part of our corporate family. We care about the people we work with, not the numbers.

Partnering with Money Concepts also gives you the financial professional, access to an incredible network of fellow advisors, and the ability to both share your experience and learn from others’ successes. As a member of our team, you’ll have access to conferences and meetings that are focused around Money Concepts advisors, rather than a home office agenda.

3)    Open communication. There is no chain-of-contact for your needs or ideas. Communication is a vital part of the financial advisor’s job, and we value communication with our partners.  Our advisors have valuable thoughts and experiences, and their contributions are always fully considered. We want to be the leader in our niche, and as such we want to have an ever growing and changing list of the most up-to-date financial planning systems. This is only capable with the expertise of our advisors, who are always encouraged to bring forward their suggestions.

We don’t just talk the talk, we walk the walk. Allen Porter, Vice President of Marketing and Business Development finds that “until they’ve experienced it, it’s just words on a brochure, and the thing that [financial advisors] are most pleased about is that they’re experiencing what we told them they’d get. This among many other reasons is why 40% of our advisors have placed their trust in Money Concepts for 20 plus years.”

We’re a firm that was built by entrepreneurs, for entrepreneurs, and that focus is on an open atmosphere for those who have a mindset to grow. If you are a financial advisor looking for the next step in serving your clients, consider making Money Concepts your partner, and experience what we can do for you. 

Real Wealth: What is it?

Contrary to popular belief, financial wealth is not just about earning a large income, wearing expensive clothes, driving fancy cars, or owning a large home. Financial experts describe wealth as based on one’s ability to have enough assets to maintain their current standard of living after retirement. In addition, wealth is linked to their ability to regularly make charitable donations and eventually, build a legacy to improve the lives of their children and grandchildren.

Despite the U.S. being quantifiably one of the richest countries in the world, many Americans have little knowledge of how to effectively manage their assets prior to retirement. Consider this, at age 65, statistics show only 19 out of 100 people are financially independent, while 46 out of every 100 are dependent on their children or other resources to maintain their standard of living. Even more alarming is 15 of the 100 will be living below the poverty level established by the government. And while most of us were taught how to make a living, very few people have learned how to save their money, let alone how to increase their savings thru various investment opportunities.

So how do you overcome the potential roadblocks to financial success and create wealth? The first step is find a trustworthy and well educated financial advisor to serve as your guide.  Together you can create a roadmap to success that will account for typical hurdles like the ever rising cost of living and taxes, which can be one of the largest contributors to the erosion of your wealth if not managed appropriately.  Top advisors not only make recommendations on investment opportunities, they also help you plan for major life occurrences like buying a home, having children, college funds, retirement, etc.

Today’s investor has access to more information than ever. They also must find a way to cut through the “noise”. Compare how the investor faired against the S&P 500. According to Dalbar, from 1993-2013 the investor averaged a 4.25% return while the S&P 500 enjoyed 9.14%. Let’s face it, investing is hard and even harder when you go it alone.  “The investor’s chief problem–and even his worst enemy–is likely to be himself,” said Benjamin Graham, a legendary American investor, scholar, teacher and author. In order to make the most of your investments and your future, ongoing financial coaching and guidance is an absolute must.

Don’t become your own biggest roadblock to wealth. Seek guidance from a financial advisor today and begin creating your own roadmap to financial success and true wealth.

Written by:

Denis Walsh

CEO

Money Concepts International