Thinking about living, working, or retiring overseas? Moving abroad may change your lifestyle dramatically, but it doesn't mean leaving the IRS behind.

In Episode 33 of the Divorce the IRS Podcast, we explore some of the most important financial and tax-planning considerations for Americans living abroad, as well as those considering making the move.

Whether you're retiring overseas, working remotely from another country, or embracing the digital nomad lifestyle, your finances can become significantly more complicated once you cross U.S. borders. The good news is that proper planning can also create valuable tax opportunities.

In this episode, you'll learn:

• Why Americans living abroad generally still have U.S. tax obligations
• How the Foreign Earned Income Exclusion (FEIE) works
• What types of income do and don't qualify for the FEIE
• The physical presence and bona fide residence tests
• How the Foreign Tax Credit (FTC) can help reduce double taxation
• Why the FTC may sometimes be more valuable than the FEIE
• How living abroad can affect your ability to contribute to retirement accounts
• Why your former state of residence can still matter after moving overseas
• How establishing domicile in a no-income-tax state may help before leaving the U.S.
• How Social Security and Medicare taxes work for Americans abroad
• What totalization agreements are and why they matter
• How working overseas could affect your eligibility for Social Security benefits

One of the biggest misconceptions about becoming an expat is that leaving the United States means leaving the U.S. tax system. The United States generally taxes its citizens and green card holders on worldwide income regardless of where they live.

But that doesn't mean expats are without options.

Strategies such as the Foreign Earned Income Exclusion and Foreign Tax Credit can provide significant tax relief when they're used appropriately. Your state residency, retirement accounts, Social Security benefits, and the country you choose to call home can also play an important role in your overall financial plan.

If you're considering moving abroad, planning before you leave the United States can make a major difference.

FREE EXPAT GUIDE

Thinking about living, working, or retiring overseas? Download the free U.S. Expat Guide for a deeper look at the tax and financial planning considerations Americans should understand before and after moving abroad.

Download the Expat Guide:
https://baobabwealth.com/financial-planning-for-americans-overseas/?guide=expat-guide-download

And stay tuned for the next episode, where we'll continue the conversation with even more tax strategies Americans abroad can use to potentially reduce their tax burden and work toward divorcing the IRS, even from overseas.

• Visit Divorce-the-IRS.com
• Visit Baobab Wealth
• Visit Baobab Wealth Abroad
• Buy a copy of Jimmy's book, Divorce the IRS
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If you're expecting a pension in retirement, your strategy for divorcing the IRS may look very different from someone relying primarily on Social Security and investments.

In this episode of the Divorce the IRS Podcast, we wrap up our three-part case study series by looking at how taxable pension income affects your Ideal Number and the amount you may want to keep in tax-deferred retirement accounts.

Pensions can be an incredible retirement benefit. They can provide guaranteed lifetime income, reduce the overall risk of a retirement income plan, and create a stable foundation alongside Social Security.

But pensions can also create challenges that are easy to overlook.

Many pensions don't increase with inflation, spousal protection can come at a significant cost, and most importantly for your tax strategy, pension payments are generally taxable income.

That last point can dramatically change your ability to pay little or even no federal income tax during retirement.

In this episode, you'll learn:

• Why pension income can change your Ideal Number
• How a pension interacts with your standard deduction
• Why pension income can make divorcing the IRS more difficult
• How pension income differs from Social Security for tax-planning purposes
• Why some pension recipients may want $0 in their tax-deferred bucket
• How Roth accounts can become especially important for pension recipients
• How the Roth TSP can help military and federal employees prepare for retirement
• When converting Traditional TSP or IRA assets to Roth may make sense
• Why pension planning should begin well before retirement
• How to determine whether your pension could prevent you from completely divorcing the IRS

The key is understanding how much guaranteed taxable income you'll already have before deciding how much money belongs in tax-deferred accounts.

If your pension equals or exceeds your standard deduction, your Ideal Number may be $0 in your tax-deferred bucket if your goal is to get as close as possible to divorcing the IRS.

That doesn't mean you're out of options. It means your strategy may need to change.

By understanding your pension, your Social Security benefits, your tax-deferred savings, and your Roth opportunities, you can build a plan designed to minimize the taxes you and your heirs may ultimately pay.

Want to find your Ideal Number?

Visit divorce-the-irs.com and use the free calculator, which factors in pension benefits to help determine how much you should currently have in tax-deferred retirement accounts.

And stay tuned for the next episode, where we'll explore strategies and potential benefits for Americans living and working overseas, including expats and remote workers.

• Visit Divorce-the-IRS.com
• Visit Baobab Wealth
• Visit Baobab Wealth Abroad
• Buy a copy of Jimmy's book, Divorce the IRS
• Follow us on Facebook
• Subscribe to us on YouTube
• Connect with us on LinkedIn

Welcome back to Episode 31 of The Divorce the IRS Podcast.

In this episode, Jimmy Miller walks through the second retirement planning case study from Divorce the IRS. Unlike the first case study, this one follows a couple who are much closer to retirement and have already accumulated most of their wealth inside traditional pre-tax retirement accounts.

Meet Bob and Helen.

They're both 50 years old, earn solid incomes, have diligently saved for retirement, and have accumulated $1.5 million in traditional retirement accounts. Like many successful savers, they've done everything they thought they were supposed to do. But they also have a problem they don't yet realize: a future retirement filled with unnecessary taxes.

Jimmy breaks down the step-by-step strategy they use to gradually transform their retirement plan over the next 15 years, showing how thoughtful tax planning can dramatically improve retirement income, reduce lifetime taxes, and create far greater flexibility.

In this episode, you'll learn:

• Why traditional retirement accounts can become future tax liabilities
• How Roth 401(k) contributions can change a retirement plan
• When Roth conversions may make sense
• Using after-tax contributions to build tax-free wealth
• How a 72(t) strategy can create early retirement flexibility
• Why paying taxes today can sometimes save significantly more later
• Coordinating Social Security with Roth withdrawals
• Reducing or eliminating Required Minimum Distribution problems
• Charitable giving strategies using RMDs
• How surviving spouses can avoid the "widow's tax penalty"
• Why retirement tax planning should be viewed over a lifetime, not one tax year at a time

By the end of this case study, Bob and Helen have transformed their retirement from one heavily dependent on taxable income into one that generates substantially more spendable income while dramatically reducing what they pay the IRS. According to Jimmy's analysis, the strategy ultimately saves them more than $800,000 in federal taxes over retirement compared to staying on their original path.

This episode demonstrates one of the central themes of Divorce the IRS: retirement isn't just about accumulating assets. It's about deciding which accounts you'll spend from, when you'll pay taxes, and how to keep more of what you've worked so hard to build.

If you've accumulated significant savings in traditional IRAs or 401(k)s and are approaching retirement, this case study offers a practical framework for thinking differently about lifetime tax planning.

Listen now to learn how strategic Roth conversions, tax bracket management, and coordinated retirement income planning can potentially save hundreds of thousands of dollars over the course of retirement.

• Visit Divorce-the-IRS.com
• Visit Baobab Wealth
• Visit Baobab Wealth Abroad
• Buy a copy of Jimmy's book, Divorce the IRS
• Follow us on Facebook
• Subscribe to us on YouTube
• Connect with us on LinkedIn