HomeDaily updateWill My Current Job Support Me Living Abroad For A Few Years?

Will My Current Job Support Me Living Abroad For A Few Years?

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With the growing popularity of remote work, it’s no surprise that we see people all over TikTok and Instagram living their best lives abroad. This can create some serious FOMO and burning questions about how these full-time travelers can fund their Insta-worthy vacations.

Since (for most people) it isn’t feasible to take an extended vacation and travel the world, your next best bet may be trying to work abroad. If you aren’t particularly tied down to living in the states, this could be a fantastic opportunity to explore new cultures, eat across a continent, and perhaps find a permanent place to call “home.”

But before you book any plane tickets, there are a few considerations about working abroad to work through first.

Before Packing Your Bags, Review Your Goals

It’s easy to romanticize the idea of living and working in another country. But you owe it to yourself, your spouse or partner, and your financial goals to stop and unpack some logistics first.

How long do you plan on staying in a foreign country? A few weeks, months, several years? Perhaps you don’t know the answer to this question yet, and that’s okay! But you need to be able to nail down your goals for traveling to estimate your needs better.

While you’re abroad, what do you want to do with your time? Maybe you’re hoping to cut back your working hours so you can spend time exploring a new city. Or perhaps you’d like to take a career break altogether. While you may wish to stick with your current employer, moving to a new country could be an exciting opportunity to pivot employers or pursue contract work. 

If you envision taking a pay cut, you must re-evaluate your cash flow plan to account for this change. This is especially important considering all the other changes to your financial situation, like housing, groceries, transportation, entertainment, etc.

The vital piece of the puzzle is to determine if your current financial plan supports these goals or if you need to make adjustments (either with your goals or your plans). 

Consider Your Employment Options

Start with finding out if your current employer will allow you to work from another country. If you’re already remote, you may be able to work from other parts of the U.S. but not other countries so it’s a good thing to ask HR about.

Does your current employer have international offices or a sister company with global roots? If so, you can find new roles or opportunities reasonably quickly.

Considering switching roles? Consider what skills you’ll need to secure that spot. For example, do you need to be fluent in another language or learn a new skill you don’t possess? These factors may limit your options or change your timeline for moving abroad.

If you think your employer will need some convincing before sending you away, create a presentation focusing on how the move could benefit you and the company.

An added advantage of getting your employer on board is the chance that they’ll offset some costs involved with you moving or living abroad. For example, they may be able to subsidize your housing, transportation, food, etc.

Talk to Your Partner

If you’re married or have a partner, you’ll naturally need to involve them in this conversation. Are they on board to pick up and move out of the country? Or will they stay behind and hold the fort while you’re gone?

All of the same considerations we discussed before working and living abroad also apply to your spouse or partner.

Look Into a Visa

In most cases, you’ll need to obtain a special work visa if you plan on working in another country. But you’ll want to review the local laws carefully since this may not be the case if you’re maintaining your current job in the U.S. and simply working remotely from abroad.

Also, check the U.S.’s current list of Travel Advisories for the country or countries you plan on visiting abroad. The government updates this list regularly, and it can help you decide if your desired destination is currently safe to visit or not.

If you plan on living somewhere that requires you to renew your visa every three months, how will you do that? What do other Americans who are living in that country do?

Don’t Forget About International Taxes

Depending on how long you plan on visiting or living abroad, you may be subject to different tax requirements. 

According to the IRS, U.S. citizens living abroad still need to follow the same rules when filing income, estate, and gift tax returns and to pay quarterly or estimated taxes.1 

If you earn income from the foreign country you’re working and living in, you must pay taxes on all income — regardless of where you earned it. 

Tax Breaks for Americans Abroad

The good news is the IRS does offer several tax breaks for Americans living abroad. Primarily, the foreign-earned income exclusion and foreign tax credit.

To be eligible to claim the foreign-earned income exclusion, you must either:2 

  • Be considered a “bona fide” resident of another country for one uninterrupted tax year, or
  • Be physically present in another country for at least 330 days out of 12 consecutive months

If you meet one of these requirements, you may be able to exclude foreign earnings of up to $120,000 in 2023.2 If you’re married, and both meet the requirements you can each choose the foreign earned income exclusion. Meaning, you could exclude as much as $240,000 for the 2023 tax year. 4

You may be able to claim the foreign tax credit if you were required to pay taxes to another country and are also subject to filing a U.S. tax return. The foreign tax credit would allow taxpayers to take an itemized deduction for those foreign taxes or a tax credit.3 You cannot claim both the FEIE and foreign tax credit on the same income.

Consider the Lifestyle Changes

Maybe you’ve seen shows like “Emily in Paris” or rewatched “Eat Pray Love” one too many times. Whatever’s sparked your desire to move abroad, try being realistic in your daily life expectations. It’s not all two-hour lunches and baguettes for breakfast when living abroad and working full-time.

Consider what you must do to maintain a daily routine and sense of “normalcy” in a new environment. Inevitably, things will change, and you’ll likely acquire new habits or routines. But it’s still wise to approach this adventure with a sense of how you’ll build a new and productive daily life while abroad.

Figure out what you want your lifestyle and routine to look like. What will you do for exercise? How will you find community? Are there activities you’re excited to be a part of (i.e. surfing, salsa dancing, scuba, etc.) that you’re not able to do back home?  

Keep Loved Ones in Mind

You’re likely leaving some loved ones behind when you embark on your travels. Have you thought about how you’ll stay in touch with friends and family back home? The world has certainly embraced virtual connection over the last few years, so finding the right method of communication shouldn’t be too hard.

Try to be intentional with how you’ll maintain those relationships. Pick a day once a month to video chat, or get in the habit of sending weekly check-in texts to your family. They will appreciate your thoughtfulness during your time abroad.

If a loved one is sick, are you able to get on a direct flight home or will you be halfway around the world and it’s harder to come back? These are considerations to think about before you choose your destination.

There are undoubtedly plenty of considerations to make before heading out on this exciting journey abroad. As you prepare to talk with your employer and share the news with loved ones, don’t forget to keep some focus on your financial well-being. You’re about to experience the adventure of a lifetime, so make sure you do it in a way that still aligns with your greater values and goals.

Sources:

1 U.S. Citizens and Resident Aliens Abroad

2Foreign Earned Income Exclusion

3Foreign Tax Credit

4Figuring the Foreign Earned Income Exclusion

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