# Financial Consequences of Retiring Back to the Old Country **URL:** \ **Category:** Factual Questions\ **Created:** [January 17, 2012, 8:35pm UTC](https://boards.straightdope.com/t/financial-consequences-of-retiring-back-to-the-old-country/609825 "2012-01-17T20:35:11Z")\ **Posts on this page:** 17\ **Page:** 1
**Author:** ![kevlaw](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kevlaw/32/2281_2.png) [@kevlaw](https://boards.straightdope.com/u/kevlaw)\ **Post date:** [January 17, 2012, 8:35pm UTC](https://boards.straightdope.com/t/financial-consequences-of-retiring-back-to-the-old-country/609825/1 "2012-01-17T20:35:11Z")
I’m a UK citizen living in the US on a green card for approaching 20 years. I’m contemplating going back to the old country (or somewhere else in Europe) in my autumn years. What will happen regarding pensions, social security, 401k etc? Meta-question suitable for GQ first and foremost… where should I look to find a financial advisor who could help me figure out the financial implications and how to plan for them? Are there people who specialize in stuff like that? Would I do better to look for someone on this side of the pond? Or the other? I’m not looking for specific tax advice, rather: what major issues should I be researching? What significant benefits would I be walking away from? For example, I assume my 401k will be taxed at my marginal rate in the US after I retire. Will Her Majesty want a slice too? Would I be subject to double taxation for ever? Will I have to pay state taxes if I have no residence in the US? Do I forfeit any entitlement to social security? Will I be entitled to a pension in the UK? NHS? A bus pass? What other issues am I missing? ---
**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\ **Post date:** [January 18, 2012, 1:27am UTC](https://boards.straightdope.com/t/financial-consequences-of-retiring-back-to-the-old-country/609825/2 "2012-01-18T01:27:25Z")
My parents were British, so I have a passport. I`ve spent 3 visits there (4 counting the one when I was 6 months).I`ve often wondered the same thing, what happens if I move there… Plus the right to live and work anywhere in the EU, I understand. A book I read once said that I could transfer my Canadian RRSP tax-free to an equivalent european saving plan, and in Belgium it could be withdrawn tax free… or an IRA or 401K from the USA… ---
**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\ **Post date:** [January 18, 2012, 6:05pm UTC](https://boards.straightdope.com/t/financial-consequences-of-retiring-back-to-the-old-country/609825/3 "2012-01-18T18:05:37Z")
I also read somewhere that all I have to do, as a British Citizen, is move to Britain with the intent to settle there, and register with a local doctor or the health authority(?) to become eligible for for the health care service. (My mother mentioned many years ago about English immigrants in the USA who found it cheaper to return to Britain for childbirth than to pay the cost of childbirth in the USA. ) ---
**Author:** ![Nava](https://avatars.discourse-cdn.com/v4/letter/n/da6949/32.png) [@Nava](https://boards.straightdope.com/u/Nava)\ **Post date:** [January 18, 2012, 7:34pm UTC](https://boards.straightdope.com/t/financial-consequences-of-retiring-back-to-the-old-country/609825/4 "2012-01-18T19:34:34Z")
Double taxation is highly unlikely, but there probably will be specific treaties between the UK and the US. For example, as a Spaniard, when I had US income and since it was taxed by Uncle Sam, Spain did not tax it (no double taxation), but also 10K of my US income were not taxable by Uncle Sam (specific treaty). Spain also wouldn’t tax an American who earned money in Spain, since Uncle Sam insists in doing it (again, no double taxation). As for where to ask, if you are employed by a multinational company they’re likely to have an accounting firm which handles these questions, as they come up also for international transfers. I know which one my US employer used, but well… they didn’t stop trying to file US taxes for me until 5 years after I’d stopped having to do it and 4 after I left the company, so they’re not exactly the love of my life. It was one of the big consulting/accounting firms. ---
**Author:** ![Baron\_Greenback](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/baron_greenback/32/48_2.png) [@Baron\_Greenback](https://boards.straightdope.com/u/Baron_Greenback)\ **Post date:** [January 18, 2012, 7:57pm UTC](https://boards.straightdope.com/t/financial-consequences-of-retiring-back-to-the-old-country/609825/5 "2012-01-18T19:57:57Z")
> [@kevlaw](#): > > Will I be entitled to a pension in the UK? NHS? A bus pass? The Basic State Pension depends on you having paid at least 30 years worth of National Insurance contributions, so it seems unlikely you will be eligible. The NHS is no problem for you, just register with a local doctor. The bus pass qualification may well vary in different parts of the UK - in Scotland you just have to a) live in Scotland, and b) be 60 or over. I _think_ you become eligible in England at the state pension age. ---
**Author:** ![kevlaw](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kevlaw/32/2281_2.png) [@kevlaw](https://boards.straightdope.com/u/kevlaw)\ **Post date:** [January 18, 2012, 8:10pm UTC](https://boards.straightdope.com/t/financial-consequences-of-retiring-back-to-the-old-country/609825/6 "2012-01-18T20:10:58Z")
> [@Baron\_Greenback](#): > > The Basic State Pension depends on you having paid at least 30 years worth of National Insurance contributions, so it seems unlikely you will be eligible. Hmm. That sucks. I have about 10 years of contributions. If’ I leave tomorrow I could retire at 65 with 30 years of contributions 🙂 I have a fairly small pension from the navy but that will barely pay for my bingo cards. ---
**Author:** ![kevlaw](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kevlaw/32/2281_2.png) [@kevlaw](https://boards.straightdope.com/u/kevlaw)\ **Post date:** [January 18, 2012, 8:13pm UTC](https://boards.straightdope.com/t/financial-consequences-of-retiring-back-to-the-old-country/609825/7 "2012-01-18T20:13:30Z")
> [@Nava](#): > > Double taxation is highly unlikely, but there probably will be specific treaties between the UK and the US. I’d expect to break all ties with the US if and when I leave which, I assume would get rid of any tax obligations to Uncle Sam…except… The only remaining tie would be my 401k. ---
**Author:** ![kevlaw](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kevlaw/32/2281_2.png) [@kevlaw](https://boards.straightdope.com/u/kevlaw)\ **Post date:** [January 18, 2012, 8:19pm UTC](https://boards.straightdope.com/t/financial-consequences-of-retiring-back-to-the-old-country/609825/8 "2012-01-18T20:19:47Z")
I just [came across a site](http://www.401khelpcenter.com/faq/faq_main.html) that has some notes on what you can do with a 401k if you return home. > [@](#): > > Can I rollover my U.S. 401k into a U.K. pension scheme when I return home to the U.K.? > > Answer: A U.S. 401k plan is not a “qualified” plan in the U.K. therefore a 401k can’t generally be rolled into some type of U.K. pension scheme. But, this is not a “do-it-yourself” area of pension law and you should check with an attorney that knows this area and the treaties involved. It has another suggestion to roll it all into a IRA > [@](#): > > Answer: Your options are the same as a citizen. If the amount in your 401k is more than $5,000, you may leave the funds in the plan. You may also rollover the funds into an IRA (our recommendation would be to do so). You will have no problem maintaining this account as a non-citizen. Thanks for all the help so far. Are there any big issues that I should be considering before making a decision? ---
**Author:** ![Baron\_Greenback](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/baron_greenback/32/48_2.png) [@Baron\_Greenback](https://boards.straightdope.com/u/Baron_Greenback)\ **Post date:** [January 18, 2012, 8:36pm UTC](https://boards.straightdope.com/t/financial-consequences-of-retiring-back-to-the-old-country/609825/9 "2012-01-18T20:36:05Z")
> [@kevlaw](#): > > Hmm. That sucks. I have about 10 years of contributions. Oh, in that case, you will be eligible for a proportion of it then. The 30 years thing is for the full amount. Mind you, it’s not very much. ---
**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\ **Post date:** [January 18, 2012, 9:09pm UTC](https://boards.straightdope.com/t/financial-consequences-of-retiring-back-to-the-old-country/609825/10 "2012-01-18T21:09:26Z")
Depends - here in Canada we have CPP and OAS. CPP (Canada Pension Plan) is contribution-driven, like US Social Security and (I assume) UK Basic State Pension? Additionally, there is an “Old Age Security” pension in Canada which is not tied to income, but the rules are tricky > [@](#): > > Payment outside Canada: Once a full or partial Old Age Security pension has been approved, it may be paid indefinitely outside Canada, if the pensioner has lived in Canada for at least 20 years after reaching 18 years of age. Otherwise, payment may be made only for the month of a pensioner’s departure from Canada and for six additional months, after which payment is suspended. The benefit may be reinstated if the pensioner returns to live in Canada and meets all conditions of eligibility. Obviously designed to allow a senior who lived here most of their life to collect their pension anywhere, but not allow someone to arrive here, start collecting not long after based solely on age, then bugger off again. Do the US and/or UK have similar pensions that are not related to earnings? Or, what happens to old folks in the UK who have never earned money during their “working” life? ANd oh yeah, based on another thread a month or two ago - if you are a US citizen, you must continue to pay taxes to Uncle Sam forever. Even if you are not, if you lived there X days in the last 3 years, you must still pay taxes, IIRC. IANAA, but… Most countries adopt the logic that they will subtract taxes paid elsewhere on income earned elsewhere; so you cannot live in a high tax state and avoid taxes, but you will not pay twice the taxes just because your income crosses a border. You will likely end up net paying the higher of the two taxes. ---
**Author:** ![Giles](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/giles/32/60_2.png) [@Giles](https://boards.straightdope.com/u/Giles)\ **Post date:** [January 18, 2012, 9:43pm UTC](https://boards.straightdope.com/t/financial-consequences-of-retiring-back-to-the-old-country/609825/11 "2012-01-18T21:43:21Z")
> [@md2000](#): > > ANd oh yeah, based on another thread a month or two ago - if you are a US citizen, you must continue to pay taxes to Uncle Sam forever. Even if you are not, if you lived there X days in the last 3 years, you must still pay taxes, IIRC. That’s not the rule. I don’t know all the details, but I lived in the US as a green-card holder until August last year, when I retired back to Australia. Within a week of arriving back in Australia, I renounced my green card, and I understand that therefore my Australian income for the last 4 months of the 2011 US tax year is not taxable in the United States – only in Australia. In other words, because I renounced my green card part way through the tax year, I am only treated as resident in the US for the period when I was a permanent resident. I worked long enough in the US to get a social security pension, and I’ve arranged for t to be paid into my Australian bank account. (In doing so, I learned that the nearest social security office is at the U.S. embassy in the Philippines – I guess that’s because more Philippinos than Australians get a social security pension.) ---
**Author:** ![kevlaw](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kevlaw/32/2281_2.png) [@kevlaw](https://boards.straightdope.com/u/kevlaw)\ **Post date:** [January 19, 2012, 1:36am UTC](https://boards.straightdope.com/t/financial-consequences-of-retiring-back-to-the-old-country/609825/12 "2012-01-19T01:36:18Z")
It hadn’t occurred to me that I might be able to receive social security benefits. There’s good info at [ssa.gov](http://www.ssa.gov/pubs/10137.html). > [@](#): > > If you are a U.S. citizen, you may receive your Social Security payments outside the United States as long as you are eligible for them. ---
**Author:** ![suranyi](https://avatars.discourse-cdn.com/v4/letter/s/e36b37/32.png) [@suranyi](https://boards.straightdope.com/u/suranyi)\ **Post date:** [January 20, 2012, 2:03am UTC](https://boards.straightdope.com/t/financial-consequences-of-retiring-back-to-the-old-country/609825/13 "2012-01-20T02:03:41Z")
> [@kevlaw](#): > > Hmm. That sucks. I have about 10 years of contributions. If’ I leave tomorrow I could retire at 65 with 30 years of contributions 🙂 > > I have a fairly small pension from the navy but that will barely pay for my bingo cards. In a case like this you need to check the details of the US/UK tax treaty. The specifics of many tax treaties say that you can combine the years of contributions from both countries to determine if you are eligible for the benefit, although you usually have to pro-rate the benefit amount by the years you actually worked in that country. For example, my father receives a (very small) Canadian social security pension, even though he only worked in Canada for five years. Canada combines the years worked there with the years worked in the US for eligibility purposes. That’s one example of why these international financial situations are so complicated. ---
**Author:** ![miramar](https://avatars.discourse-cdn.com/v4/letter/m/13edae/32.png) [@miramar](https://boards.straightdope.com/u/miramar)\ **Post date:** [November 8, 2012, 3:14pm UTC](https://boards.straightdope.com/t/financial-consequences-of-retiring-back-to-the-old-country/609825/14 "2012-11-08T15:14:50Z")
HI, We are Americans thinking of retiring in the UK. We lived in Ascot, England for a year, and wonder where do we start in applying for a residency permit. Before we had a business sponsor. We have a flat in Portugal but their taxes are unbelievable. Does anyone know if Britian taxes foreigners on world wide income? Thanks ---
**Author:** ![Dr.Drake](https://avatars.discourse-cdn.com/v4/letter/d/ad7895/32.png) [@Dr.Drake](https://boards.straightdope.com/u/Dr.Drake)\ **Post date:** [November 8, 2012, 3:25pm UTC](https://boards.straightdope.com/t/financial-consequences-of-retiring-back-to-the-old-country/609825/15 "2012-11-08T15:25:14Z")
> [@Giles](#): > > That’s not the rule. That is the rule, but only for citizens. It does not apply to permanent residents / green-card holders. ---
**Author:** ![SanVito](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/sanvito/32/2805_2.png) [@SanVito](https://boards.straightdope.com/u/SanVito)\ **Post date:** [November 8, 2012, 3:58pm UTC](https://boards.straightdope.com/t/financial-consequences-of-retiring-back-to-the-old-country/609825/16 "2012-11-08T15:58:50Z")
> [@miramar](#): > > HI, We are Americans thinking of retiring in the UK. We lived in Ascot, England for a year, and wonder where do we start in applying for a residency permit. Before we had a business sponsor. You used to be able to get a residency visa as a retired person of independent means with strong links to the UK (eg family or long periods of previous residency), but I think from this [link](http://www.ukba.homeoffice.gov.uk/visas-immigration/while-in-uk/extending-stay/retiredpeople/) they have closed that option now. > [@miramar](#): > > Does anyone know if Britian taxes foreigners on world wide income? It depends on your residency/domicile status. You can read up[here](http://www.hmrc.gov.uk/international/res-dom.htm) (Link to HM Revenue and Customs) ---
**Author:** ![Baron\_Greenback](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/baron_greenback/32/48_2.png) [@Baron\_Greenback](https://boards.straightdope.com/u/Baron_Greenback)\ **Post date:** [November 8, 2012, 3:59pm UTC](https://boards.straightdope.com/t/financial-consequences-of-retiring-back-to-the-old-country/609825/17 "2012-11-08T15:59:07Z")
> [@miramar](#): > > HI, We are Americans thinking of retiring in the UK. We lived in Ascot, England for a year, and wonder where do we start in applying for a residency permit. Before we had a business sponsor. > > We have a flat in Portugal but their taxes are unbelievable. > > Does anyone know if Britian taxes foreigners on world wide income? > > Thanks What’s your residency status in Portugal? EU and all that, may not be a problem to relocate the UK. The tax thing: In general, no, you only pay tax on income earned in the UK, obviously you’ll need to talk to a lawyer/accountant for the fine detail. But it’s not like the US ex-pat tax arrangements.