Since I used to be sufficiently old to vote in presidential elections, I’ve heard loads of grumbling throughout the political spectrum about moving to Canada if one candidate or one other wins. And since I’ve been a full-time employee, I’ve additionally been get together to numerous pie-in-the-sky conversations concerning the expat potential of retiring to Barcelona; Buenos Aires, Argentina; or Bangkok.
However conversations about leaving the USA have felt a bit of totally different during the last couple of years. It began when a number of of my dad and mom’ contemporaries really retired overseas, relatively than simply occupied with it. Then a number of buddies picked up stakes—which included promoting homes and vehicles and uprooting high-school aged youngsters—merely to relocate away from America.
It’s not simply my circle of buddies and acquaintances, both. CS Global Partners discovered a 102.4% soar in U.S. expatriation within the first quarter of 2025 in comparison with the final quarter of 2024—though that soar solely represents an estimated 1,285 people in actual numbers.
As straightforward as it’s to say you’d wish to change into an American expat dwelling it up abroad, the fact isn’t essentially that easy. I spoke to 2 individuals who have moved away from the U.S. concerning the hidden prices of emigration.
Infrastructure issues
Valerie Roseborough retired to Panama when she exited her profession in gross sales and marketing. She first acquired the expat itch throughout COVID-19. “In my early profession, I had completed quite a lot of solo worldwide touring,” she says. “Seeing a lot of the world undergo the identical factor at one time jogged my memory of how linked I had as soon as felt to the remainder of the world.”
That satisfied Roseborough to start out touring extra—with retirement behind her thoughts. She spent six months in Mexico and realized it was not her place. “The infrastructure wasn’t going to work for me,” Roseborough says. “It’s a big nation and form of difficult to maneuver about from state to state and place to position.”
As soon as Panama introduced itself as an possibility, with its giant worldwide airport and direct flights to North America, in addition to beneficiant reductions to retirees, Roseborough realized it was a super spot for her second act, as an expat. Journey to and from her dwelling within the Washington, D.C. space makes it potential to remain carefully linked together with her youngsters.
However she additionally acknowledges that her location within the States as she was planning the transfer additionally helped make the method simpler. “I used to be lucky in that I used to be relocating from Washington, D.C, which has a Panamanian consulate and embassy,” she says. “I simply needed to make an appointment and present up with the required paperwork.”
Should you don’t reside in an space with a close-by embassy or consulate for the nation you need to to migrate to, you’ll have to work via the State Division and deal with the whole lot through mail.
Put together for taxes
Rian Chandler-Dovis and her husband determined to immigrate to Cabo San Lucas, Mexico, from Virginia a number of years in the past. “We acquired down right here, and we had been like, we love this place,” she says. “What’s it going to take to immigrate right here?”
Mexico has a comparatively versatile immigration coverage, partly as a result of “the federal government has instituted a 16% sales tax throughout the board,” Chandler-Dovis explains. This implies immigrants to Mexico don’t essentially have onerous income requirements, as a result of even in case you’re not paying revenue tax in Mexico, the 16% gross sales tax contributes massively to the economic system.
However if you’re dwelling overseas and sustaining an American residency, that may complicate your revenue tax scenario. Chandler-Dovis’s husband now earns revenue in Mexico, whereas she owns a enterprise that’s registered in the USA. They pay revenue tax in Mexico, however discovered that sustaining their residence in Virginia would change their tax standing in ways in which would complicate issues an excessive amount of.
“For tax functions. Virginia is what you name a sticky state,” Chandler-Dovis says.
There are 4 different so-called sticky states: California, New Mexico, New York, and South Carolina. Every of those states take into account people to nonetheless be tax residents even after shifting overseas, and expects them to maintain submitting state tax returns and paying state taxes.
These states have additionally been recognized to levy penalties for noncompliance to any émigré silly sufficient to suppose that shifting to a different nation would minimize any mandatory tax ties to their former dwelling.
Not all prices are monetary
Sadly, giving up their Virginia residency has a severe value for Chandler-Dovis and her husband. With out an handle in America, they’ll’t vote in U.S. elections.
“In an effort to keep registered to vote, it’s important to have a U.S. handle,” Chandler-Dovis says. “And the legislation says that in case you transfer in a foreign country, your voter registration should mirror your final U.S. handle.”
This generally is a severe catch-22 for Individuals dwelling overseas, particularly those that are contemplating a transfer for political causes. It’s possible you’ll be caught deciding between a nightmare of a tax state of affairs in case you reside in a sticky state or the flexibility to vote in American elections.
New alternatives, new issues
Residing overseas generally is a dream, an journey, or an escape. However it is going to by no means be precisely what you count on, and it’ll all the time have hidden prices which you could’t probably anticipate.
Particularly, it’s vital to take the infrastructure of each your vacation spot and your present scenario under consideration. Taking a trial run in your potential dwelling, as Valerie Roseborough did in Mexico, will help a potential expat decide if it is going to work. Her six months in Mexico made it clear that the Mexican infrastructure wasn’t a very good match and led her to Panama, which is ideal for her retirement. She additionally acknowledged that dwelling in Washington, D.C. made making use of for her visa a lot simpler due to her proximity to the Panamanian consulate and embassy. Should you aren’t as lucky, count on the method to take longer.
Taxes will proceed to be a headache irrespective of the place on the earth you reside. Whereas revenue could also be much less vital to some nations, that doesn’t essentially imply you gained’t want to fret about how your tax scenario will have an effect on your funds, immigration standing, and residency.
Moreover, taxes could have an effect on an expat’s means to keep up residency—and the flexibility to vote—in America. Ensure you take into account all these sorts of nonfinancial prices earlier than you make any selections about shifting.
