Expat Financial Planning: A Complete Guide for Americans Abroad

Somewhere between 4.4 and 9 million Americans live outside the United States, the range is wide because the US government doesn't formally track emigration. The Federal Voting Assistance Program estimated 4.4 million civilian Americans abroad in 2022; the Association of Americans Resident Overseas estimates approximately 5.4 million.¹ And the number appears to be growing: a Wall Street Journal analysis of data from 15 countries found that at least 180,000 American citizens left the US to live abroad in 2025 alone, contributing to a net negative migration of roughly 150,000 people that year.²

What's less discussed is how dramatically your financial life changes when you do. Tax obligations don't stop at the border. Your bank might close your account. Medicare doesn't work overseas. And budgeting becomes an exercise in currency math that most financial tools weren't built for.

This guide covers the major financial planning areas for Americans abroad, not as a replacement for professional advice, but as a map of the terrain. Knowing what questions to ask is half the battle.

1. You still file US taxes (yes, on worldwide income)

The US and Eritrea are the only two countries in the world that tax based on citizenship rather than residence.³ If you're a US citizen or green card holder, you file a US tax return every year on your worldwide income, regardless of where you live or earn money. This is true even if you owe zero tax after exclusions and credits.

Three filings matter most for expats:

FBAR (FinCEN Form 114)

If the combined value of your foreign financial accounts exceeds $10,000 at any point during the year, you must file an FBAR. This includes checking accounts, savings accounts, brokerage accounts, and even accounts where you have signature authority (like a company account at work).⁴

The FBAR is filed electronically with FinCEN (not the IRS) and is due April 15, with an automatic extension to October 15. Penalties for non-filing are disproportionately severe: over $16,000 per unreported form for non-willful violations (inflation-adjusted annually from the statutory $10,000 base).⁵ Following the 2023 Supreme Court decision in Bittner v. United States, this penalty applies per form (per year), not per account, but it's still a steep price for missing a filing you may not have known about.

FATCA (Form 8938)

FATCA requires reporting specified foreign financial assets on Form 8938, attached to your regular tax return. The thresholds are higher than the FBAR: for expats filing single, you must report if your foreign assets exceed $200,000 at year-end (or $300,000 at any point during the year). For married filing jointly, those thresholds double to $400,000 and $600,000.⁶

Yes, this means you might file both an FBAR and Form 8938 for the same accounts. They serve different agencies and have different thresholds. Welcome to expat tax compliance.

Foreign Earned Income Exclusion (FEIE)

The good news: if you qualify, you can exclude up to $132,900 of foreign earned income from US tax for tax year 2026, plus a housing exclusion for qualifying housing costs above a base amount (16% of the FEIE), up to a maximum of $39,870 in total housing costs.⁷ If married and both spouses work abroad and qualify, the combined exclusion is $265,800. To qualify, you need to pass either the bona fide residence test (you're a resident of another country for a full calendar year) or the physical presence test (you're outside the US for at least 330 full days in a 12-month period).⁸

The FEIE doesn't eliminate your filing obligation, you still file a return and claim the exclusion on it. And it only applies to earned income (salary, self-employment), not investment income, pensions, or Social Security.

Practical tip: Find an accountant who specializes in expat taxes. Generic tax software handles these filings poorly, and the penalties for getting it wrong are disproportionate to the effort of doing it right.

2. Banking across borders is harder than it should be

Here's something nobody warns you about before you move: FATCA imposes reporting requirements on foreign banks that serve American customers, and the compliance burden is high enough that many European banks refuse US citizens as clients rather than deal with the paperwork. Major institutions including Deutsche Bank, BNP Paribas, and UBS have sent account termination letters to American clients.⁹ Smaller firms are even more likely to turn you away, German online brokerage FlatexDEGIRO informed its roughly 1,000 American clients in late 2024 to find alternative services, becoming at least the third German financial entity in less than a year to drop US-person accounts.¹⁰

The legal landscape is shifting too. In late 2025, a Belgian court referred a case to the EU Court of Justice questioning whether FATCA-required data transfers to the IRS comply with the EU's General Data Protection Regulation (GDPR).¹¹ The outcome could change how European banks handle American accounts.

On the US side, some banks require a US residential address and will flag or close accounts that appear dormant or that receive international transfers they can't explain.

What works

• US banks that welcome expats: Charles Schwab's international account and HSBC Premier are commonly used by Americans abroad. Credit unions affiliated with the military or foreign service (like USAA, Pentagon Federal) also tend to be expat-friendly.
• Multi-currency accounts: Wise (formerly TransferWise) lets you hold balances in 40+ currencies with local bank details. It's not a full bank, but it solves the "I need to receive and send in multiple currencies" problem.
• Local banks: You'll almost certainly need a local bank account in your country of residence, for rent, direct debits, and daily expenses. Research which banks accept Americans before you arrive.

Practical tip: Don't close your US accounts before you move. It's much harder to open them remotely. Keep at least one US checking account, one savings account, and one credit card active.

3. Budgeting across currencies

This is the financial planning gap that motivated me to build Borderless Budget, so I have strong opinions here. But the core problem is tool-agnostic: when your income is in one currency and your expenses are in another, every budgeting app built for a single country breaks.

The challenges are specific:

• Currency conversion changes your budget daily. A EUR 1,200 rent payment costs a different amount in dollars every month. Your budget needs to account for the rate you actually got, not a fixed assumption.
• You need a consolidated view. Your US credit card, your local checking account, your Wise balance , you need to see total spending across all of them in one place, in one currency, to know if you're on track.
• Transfer costs are invisible budget leaks. Every time you move money between currencies, you lose something to fees and rate markups. This needs its own budget category.

Whether you use a spreadsheet, an app, or a notebook, the principle is the same: budget in the currency you spend in, consolidate into a home currency for the big picture, and track your conversion costs explicitly.

If you want a deeper dive, I wrote about the 7 most common expat budgeting mistakes and how to budget in two currencies specifically.

4. Healthcare and insurance

Medicare does not cover you outside the United States. Per Medicare.gov, "in most situations, Medicare won't pay for health care or supplies you get outside the U.S.", with narrow exceptions for emergencies near the Canadian or Mexican border.¹² If you've been paying into Medicare your whole career, that's an uncomfortable realization. You have three main options abroad:

• Your country's public system. Many countries, Spain, France, the UK, Germany, have public healthcare systems that residents can access, often through employer contributions or a monthly premium. In Spain, for example, residents who pay into the Seguridad Social system (through employment or self-employment contributions) get comprehensive public coverage.
• International expat health insurance. Plans from providers like Cigna Global, GeoBlue (Blue Cross Blue Shield's international arm, rebranded in October 2025), or IMG cover you across multiple countries.¹³ Including the US in your coverage area adds 50-100% to the premium, reflecting the high cost of American healthcare.¹⁴
• Local private insurance. In many countries, private insurance is affordable relative to US premiums. In Spain, a comprehensive private plan runs about EUR 50-150 per month depending on age and co-payment level, a fraction of comparable US coverage.¹⁵

Medicare consideration: If you're under 65, you can delay Medicare Part B enrollment without penalty as long as you have qualifying coverage abroad. But the rules are nuanced, and getting this wrong means paying a permanent late enrollment surcharge when you eventually sign up. Talk to a benefits advisor before making this decision.

5. Social Security from abroad

If you're a US citizen, you can collect Social Security benefits in most countries worldwide. The SSA will direct-deposit to bank accounts in countries that have an international payment agreement with the US.¹⁶

A few things to know:

• It's still US-source income. Social Security cannot be excluded using the Foreign Earned Income Exclusion. Up to 85% of benefits may be taxable on your US return, regardless of where you live.¹⁷
• Some countries are blocked. Cuba and North Korea are completely excluded. Cambodia, Vietnam, and some former Soviet states have restrictions, though exceptions are possible.¹⁸
• You'll get a questionnaire. The SSA sends a periodic questionnaire every 1-2 years to verify you're still eligible. If you don't respond, benefits stop.¹⁶
• Totalization agreements help. The US has Social Security agreements with 30 countries.¹⁹ If you work in a country with a totalization agreement, you won't pay Social Security tax in both countries simultaneously, and you can combine work credits from both countries toward eligibility.

Practical tip: If you're still working and your host country has a totalization agreement, make sure your employer (or you, if self-employed) is applying it correctly. Double-paying Social Security taxes is a common and expensive mistake.

6. Retirement accounts

Your 401(k) and IRA don't disappear when you move abroad, but using them gets more complicated.

• The FEIE can block IRA contributions. The IRS requires "taxable compensation" to contribute to an IRA, and income excluded under the FEIE doesn't count. If you exclude all your earned income, you technically have $0 in eligible compensation and cannot contribute to a traditional or Roth IRA for that year.²⁰ A 6% excise tax applies for each year an excess contribution remains in the account.²¹
• Alternative: Foreign Tax Credit. Unlike the FEIE, using the Foreign Tax Credit doesn't exclude your income from IRA eligibility. Some expats choose the FTC specifically to preserve their ability to contribute to retirement accounts.²⁰
• Brokerage access can be restricted. Some US brokerages limit trading or freeze accounts when they learn you live abroad, due to foreign securities regulations. Check with your brokerage before you move.
• Foreign retirement accounts are a tax headache. If you participate in your host country's retirement system, the US generally doesn't recognize it as tax-advantaged. You may owe US tax on gains in that account annually, even before withdrawal. This depends heavily on tax treaties between the two countries.
• Roth conversions can be powerful abroad. If your US tax liability is low thanks to the FEIE and Foreign Tax Credits, the early years abroad can be an excellent time to convert traditional IRA funds to Roth, you pay tax at a lower effective rate now and withdraw tax-free later.

7. Managing currency risk

If your income is in USD and your expenses are in EUR, a 10% move in the exchange rate is a 10% change in your cost of living. That's not hypothetical: the euro fell roughly 16% against the dollar in 2022, briefly dropping below parity for the first time in 20 years.²²

You probably don't need to hedge currency risk the way a corporation would. But you should be aware of it and have a basic strategy:

• Keep a buffer in your spending currency. If your expenses are in euros, maintain 2-3 months of expenses in euros at all times. This means you're not forced to convert at a bad rate just because rent is due.
• Convert on a schedule, not on a whim. Converting a fixed amount monthly (dollar-cost averaging into your spending currency) smooths out rate fluctuations better than trying to time the market.
• Match your income to your expenses when possible. If you can earn even part of your income in the same currency as your expenses, your exposure drops significantly.
• Track your effective rate. Each month, note the rate you actually got on your transfers. Over a year, this number tells you more than any spot rate on Google.

8. Estate planning across borders

This is the topic nobody wants to think about, and the one most likely to create a mess if you don't. The short version: your US will may not be recognized in your country of residence, and your host country's inheritance laws may override what your will says.

Many European countries use "forced heirship" rules that reserve a portion of your estate for specific relatives, regardless of your will. In France, children must receive at least half of the estate (two-thirds for two children, three-quarters for three or more). In Spain, children inherit at least two-thirds of their parents' Spanish assets by law.²³

There is some relief: the EU Succession Regulation (Brussels IV) allows individuals residing in EU countries to choose the law of their nationality to govern their estate. For US citizens with assets in Europe, this can bypass local forced heirship rules, but only if you make that choice explicitly in your will.²⁴

At a minimum:

• Have a will that's valid in your country of residence (not just the US)
• Understand how your host country's inheritance laws interact with your US estate plan
• Review beneficiary designations on all financial accounts, these often override wills and may be governed by the law of the country where the account is held
• Consider powers of attorney that are recognized in both countries

Practical tip: An estate planning attorney who practices in both your home country and your host country is worth every dollar. This is not a DIY area.

Putting it all together

Expat financial planning isn't a single task you check off. It's an ongoing process of managing complexity that most financial advice doesn't acknowledge. Here's a practical checklist for your first year abroad:

1. Before you move: Open an expat-friendly US bank account, check your brokerage's policy on overseas clients, and keep your US credit cards active.
2. Month 1: Open a local bank account, set up a multi-currency account (Wise or similar), and register with your country's tax authority if required.
3. Month 2-3: Establish a budget that tracks both currencies, set up a regular transfer schedule, and start tracking your conversion costs.
4. Before April 15: File your US tax return (or extension). File your FBAR if applicable. Determine whether to use the FEIE or Foreign Tax Credit, this choice has downstream effects on your IRA eligibility.
5. Annually: Review your healthcare coverage, check your Social Security statement, evaluate your currency strategy, and audit your US obligations.

None of this is impossible. But all of it is easier when you can see your full financial picture, across currencies, across countries, in one place. That visibility is the foundation everything else builds on.

Related reading:

• 7 Budgeting Mistakes Expats Make (and How to Fix Them)
• How to Budget in Two Currencies Without Losing Your Mind
• The Hidden Cost of Currency Conversion Fees
• Free Multi-Currency Budget Template