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How Advisors Support Clients Considering Moving Abroad: Financial Realities Every Client Must Understand

Overview

This session, led by Matt Goren of the Global Financial Planning Institute, explored the growing trend of Americans moving abroad and the critical financial, legal, and psychological factors that determine whether those moves succeed or fail. While many clients are drawn by lower costs, political dissatisfaction, and perceived quality-of-life improvements, the discussion emphasized that the biggest risks are not financial—but behavioral and psychological.

The number of Americans living abroad is estimated between 5.5 million and 9 million, with approximately 125,000 leaving annually, a figure expected to rise significantly in the coming years. However, a substantial percentage ultimately return, often facing unexpected financial and logistical consequences. 

Key Trends Driving the Surge in Americans Moving Abroad

1. Demographic Shift

• Historically: retirees moving abroad for lower costs 
• Emerging trend: younger, mid-career professionals working remotely 
• Gen Z and Millennials show the highest interest in relocating internationally 

2. Primary Motivations

• Lower cost of living (especially Latin America and parts of Europe) 
• Dissatisfaction with U.S. political and social environment 
• Perceived higher quality of life abroad  
• Increased flexibility due to remote work 

3. Top Destinations

• Canada and Mexico (proximity and familiarity) 
• United Kingdom and Europe (language, infrastructure, lifestyle) 

The Most Overlooked Risk: Psychological Failure (Not Financial Failure)

A central theme of the session was that financial planning alone is insufficient.

The “Tourist vs. Resident” Problem

Many clients:

• Experience foreign countries as tourists (low stress, high enjoyment) 
• Mistakenly assume permanent life will feel the same 

Reality:

• Daily life introduces stressors (work, bureaucracy, isolation) 
• The “honeymoon phase” fades into culture shock 

Culture Shock Cycle

1. Excitement and novelty 
2. Frustration and isolation 
3. Emotional downturn (loneliness, identity disruption) 
4. Either: 
   • Adaptation and integration (success), or 
   • Return to the U.S. (failure) 

Key Statistic

• ~25% of “permanent” expats return home 
• Up to 75% of short-term movers return 

Primary reason for failure:
👉 Loss of social connection (family, friends, community)

Financial Planning Risks Advisors Must Address

1. Foreign Exchange Risk

• Currency fluctuations can significantly increase costs 
• Example: USD weakening vs. euro can raise home purchase costs by 15%+ 

2. Inflation Differences

• Some countries experience much higher inflation than the U.S. 
• Clients often underestimate long-term purchasing power risk 

3. Healthcare Complexity

• Medicare typically does not cover care abroad 
• Clients often: 
  • Pay out-of-pocket 
  • Travel back to the U.S. for treatment 
• Entry into foreign healthcare systems is not immediate or guaranteed 

4. Housing Instability

• Renting is more common abroad 
• Less stability vs. U.S. homeownership norms 

5. Tax & Compliance Burdens

• U.S. citizens are taxed globally 
• Must comply with: 
  • FBAR (Foreign Bank Account Reporting) 
  • FATCA requirements 
• Dual tax systems create complexity for most expats 

Major Planning Mistakes to Avoid

❌ Selling U.S. Primary Residence Too Early

• Many clients return and must repurchase housing at higher costs 

❌ Moving Assets Out of the U.S. Prematurely

• U.S. remains one of the strongest long-term investment environments 

❌ Assuming the Move is Permanent

• Life events (death, divorce, job loss) often force reversal 

❌ Ignoring Family Implications

• Example: moving a high school student abroad led to $240,000 higher college costs due to loss of in-state tuition 

Best Practices for Advisors

1. Encourage “Test Periods” Before Full Relocation

• Gradual exposure (weeks → months → years) 
• Example: remote work trials in destination country 

2. Prioritize Social Integration Planning

Clients must:

• Learn the language 
• Build local relationships 
• Join communities (not just expat enclaves) 

3. Maintain U.S. Ties

• Keep: 
  • U.S. residency 
  • Financial accounts 
  • Real estate (if possible) 

4. Avoid “Push-Only” Decisions

• Moving away from the U.S. is not enough  
• Clients must be pulled toward a specific country and culture 

5. Delay Irreversible Decisions

Only after successful adjustment should clients:

• Buy property abroad 
• Transfer assets permanently 
• Pursue citizenship or long-term residency 

Legal and Operational Challenges

• Financial institutions may restrict service for expats 
• Advisors may face: 
  • Firm-level restrictions 
  • Cross-border compliance hurdles 

Best approach:

• Continue managing U.S.-based assets 
• Partner with local advisors in destination country 

What Determines Success vs. Failure

Successful Expats:

• Have positive attitudes toward both cultures 
• Build bicultural identity 
• Integrate socially and linguistically 
• Plan gradually over years 

Unsuccessful Expats:

• Move quickly without testing 
• Fail to integrate socially 
• Stay isolated in expat bubbles 
• Are “escaping” rather than intentionally relocating 

Key Advisor Takeaway

The biggest risk in moving abroad is not taxes, investments, or currency—it is:

👉 Whether the client can build a life, not just relocate geographically

Advisors who focus only on financial mechanics (taxes, FX, compliance) will miss the primary driver of success or failure.