The Financial Health Checklist for expats

Beacon Financial Education aims to help expats organise their personal finances and educate them about retirement plans, personal lifestyle planning and wealth management. With Beacon's Financial Health Checklist, you can find out if you are on the right track!

Going abroad on an international assignment is an unforgettable adventure, yet also a challenging experience. You will have many things to consider before and after moving to your new (temporary) country.

Keeping your finances in order is difficult enough, but being sent abroad adds an extra layer of significant consequences for your ability to monitor your financial accounts, and to save, invest and pay your taxes.

In anticipation of your international assignment, or if you presently live abroad, it is vital to review your financial resources and determine how they might best be managed and supplemented while working in a new country.

This checklist offers an overview and considers how your international residence may affect each of these essential items.

Create your personal Financial Health Checklist

Whether you’re still in the planning phase of your move or if you've just recently arrived in your new country, prepare - if you haven't already - your own personal Financial Health Checklist.

Make copies of all your important financial documents and keep them in separate folders. Prepare a folder for each of the following categories and start collecting information:
›  Bank accounts
›  Financial investments and your Investment Policy Statement
›  Retirement accounts
›  Insurance
›  Education 
›  Tax

› Bank accounts

Collect your bank information and statements including your checking and savings accounts, as well as those of your credit cards. Notify all banks and credit card issuers of your impending relocation.

Obtain a local checking account and credit card, or check whether your own bank operates internationally and if they have branches in your new city or country.

Find out what the banking regulations are regarding foreign nationals in your new country of residence. You may need assistance from your employer, or another trusted local referral, to arrange local banking.

It may take several months to open your new account, so be sure you have sufficient funds easily accessible in your home-based accounts during the interim period, and start the process as soon as possible.

To avoid mail-related delays of statements and bills, it may be best to monitor statements online and to set up automatic electronic payments for your monthly bills.

› Financial investments and Investment Policy Statement

It is always a good idea to review your existing financial plan on an annual basis. You should consider the scope of your investments through the lens of your international assignment.

The fundamentals of a financial plan include determining goals and composing a timeline for major life cycle events. These are complemented by insurance coverage.

A solid financial plan will take into account the state of your current investment portfolio and the approximate dates when certain funds or assets need to be accessible.

You should also have an Investment Policy Statement, namely a written document that outlines your long-term investment horizon and goals, your risk tolerance and the standards for diversification of assets, by security type and by geography.

Based on this, you can assemble an investment portfolio with the help of an advisor.

› Retirement accounts

It’s never too early to consider retirement plans, which begin with your expected age at retirement and your anticipated income needs.

For some quick and easy calculations, the following exercise may prove useful: many experts suggest multiplying your current income by 70 percent, taking into account that as a retiree your spending will be lower than while you are employed.

› Insurance

Life and disability insurance coverage are a safety net for all employees, regardless of geography, and are often provided by employers. 

Depending on the country you are from, most people purchase additional coverage that supplements the insurance provided by their employer so that they are also covered whilst abroad.

Life insurance is designed to provide income to a spouse and family in the event of death due to illness, accidents, war or terrorism. You should confirm the benefits of your policy in advance, and consider if, like most experts recommend as a guideline, it is 10 times your current salary.

When it comes to disability insurance, most policies are designed to pay 60 percent of your annual salary for a period of several years, which may be extended.

Long-term care insurance provides financial resources for your years as an elderly person, whether you live in your own home with an aide or in a senior residence.

Because the insurance company usually pays the provider, such as a nursing home or the employer of a home health care aide, it is essential to learn whether or not this particular policy would pay the expenses of an overseas facility, or the services of a skilled aide in another country.

Long-term care insurance is, generally, a private arrangement and is not offered by employers.

› Education

If you have children, you are probably anticipating saving for college expenses. This will require significant planning and investment on your part.

Make yourself aware of the options in your home country (many countries have education savings options, with special tax advantages), and enquire about the possibilities in the Netherlands. What are the costs? Are there special scholarships available for your children, etc.

› Tax

The most complex of all will be your tax situation. No matter where you are from, you will be taxed in both your home country as well as in your residing country.

Beyond income, every asset category (Investment, Insurance, Education or Retirement) must be assessed to determine the optimal product for your individual circumstance and your financial plan.

Moreover, tax consequences vary considerably by country and even state. Also, a portion of your income will be subject to taxes in the country where you reside.

Consult a specialist

This checklist focuses on the distinct components of your financial accounts and resources as an expat, with an emphasis on insurance, retirement accounts and taxes. However, you should always consult with a financial, tax and/or legal advisor for information concerning your own specific situation.

Beacon Financial Education provides access to a global network of advisors. Whether you are a U.S. citizen or international from another country residing in the Netherlands, or a Dutch national moving to another country, Beacon can help you with finding your way in your new country.

Beacon Financial Education does not provide financial, tax or legal advice. None of this information should be considered financial, tax or legal advice. You should consult your financial, tax or legal advisors for information concerning your own specific tax/legal situation.