Retiring abroad: USA

If you dream of retiring abroad like many UK pensioners, it's a big decision that can affect your pensions. In a poll carried out in 2006. The majority of Britons, 53%, would consider emigrating. More than 300,000 leave the UK each year to start a new life overseas.

Estimates suggest that up to 5.5 million British nationals now live abroad. After Australia, the USA is the second most popular expat destination for Britons who choose to live abroad. According to the US Census Bureau. The total number of British citizens estimated to be living in the USA in 2000 was 824,000. Canada and Spain follow this.

Ranking British expats by country

• Australia
• USA
• Canada
• Spain
• Ireland
• New Zealand
• France
• South Africa
• Germany
• Italy

 

Retiring abroad USA: Residence permit 

There is no retiree visa specifically in the USA. Retirees can apply for various avenues for both permanent and temporary residency.

A Permanent Resident Card or Green Card. Gives you almost the same rights as a US citizen. The application process is usually very lengthy and can involve much red tape. Therefore, you must apply several years before you plan to retire. 

Since 1994, the US government has been awarding 55,000 Green Cards each year to people worldwide in a lottery. The application proces is relatively easy and has few requirements. 

According to the American Dream website. For Europeans, you have a 1 in 45 chance of getting a Green Card through the lottery. It's not a statistic you should pin your retirement dreams on.

For seniors, the most likely route is to apply for a visitor visa (B-visa). This visa is valid for ten years. This entitles the visa holder to remain in the United States for up to six months at a time.

For a UK citizen, the Visitor Visa is the perfect residence permit for anyone who wants to live in sunny Florida. The most popular retiree destination, while keeping a summer residence in the UK. 

Although it is possible to apply for a one-time extension to the visitor visa. Only the Green Card gives you a permanent right to stay in America.

Retiring abroad USA: taxation advice 

Under the Visitor Visa. If you spend less than 183 days per year in the USA. You would be only viable for taxation in the UK and would not have to pay taxes in the USA.

Retired Green Card holders are considered US tax residents. They are generally subject to US taxation on their worldwide income. This is reported to the Inland Revenue Service.

Retiring abroad USA: banking under a Visitor Visa

Under the Visitor Visa, you would leave your pension in the UK. Still, it is possible to open a bank account in the USA.  Used to pay for internet connections, mobile phones, rent, and utility bills. Essential to your stay in the USA.

All resident bank accounts in the USA require a social security number (SNN) and tax code to open an account. 

However, some banks, including Chase, TD Bank, US Bank, and Wells Fargo.  Accept alternative forms of identification from non-US citizens. When opening an account instead of an SSN and tax code. You use other relevant documents to establish identity in your home country. Therefore, complying with regulatory requirements. 

Qualifying Recognised Overseas Pensions Scheme (QROPS)

Currency risk can be managed by setting up a foreign exchange account. You simply transfer money into US Dollars from a UK bank account as needed.

Alternatively, UK expats holding a Green Card. Often consider transferring their pensions to a QROPS. Therefore, avoiding currency transfer risks. 

Although British QROPS pensions are not recognised in the US.  There are options to have a QROPS in Malta. The US has a treaty with Malta on regulated pensions. Including a section on QROPS.

Benefits of a QROPS include:

• Retirement at 55 years old
• Up to a 25% lump sum
• Investments available in any primary currency, including US dollars
• Pension payments made in US dollars direct into US bank accounts

Retiring abroad:  Australia | New Zealand | USA | Canada | Spain | Portugal | Italy | France | Germany | Ireland