Project Description

Case Study: Retiring to the Mediterranean

HomeCase Study: Retiring to the Mediterranean

Sarah and Christopher…

were closing in on retirement and had dreams to spend part of the year somewhere warm and sunny overseas, and part of the year near family. Avid travelers, the couple held financial assets in the United States and overseas and Christopher is a dual-citizen.

They felt comfortable with the financial choices they had made over the years and had a long-term relationship with a CPA who handled annual tax preparation but had no knowledge of their investment portfolio.

When Sarah and Chris came to Passport Wealth Management, they had dreams of wandering through Mediterranean streets, exploring vibrant downtown art galleries and the simple pleasure of meals by the sea. They were looking to answer one single question…

Could they achieve their dream of retiring part-time abroad in the next five years?

Step 1: Discovery

Dan spoke to the couple about their retirement dreams, goals for the future, and family. He collected information on their accounts, assets, liabilities, insurance coverages, philanthropic giving, and more – taking a comprehensive and holistic account of their financial history, lifestyle, and goals.  They had taken investment steps to secure their financial future, but Dan identified several areas where the couple could benefit from professional advice to receive immediate value and long-term benefit.  

Step 2: Identifying Liabilities

At the advice of their accountant, the couple held significant assets in retirement accounts which deferred the tax burden to retirement. Unfortunately, they had overfunded those retirement accounts, and inadvertently set themselves up to see a significant increase in their tax rate when they started to withdrawal from their retirement accounts. Dan recognized that recent legislative changes had created a window of opportunity to recognize taxes in these accounts in the near-term at a lower tax rate and maintain a constant long-term tax rate in the future instead of seeing a significant increase. He moved to recognize the taxes now, saving the couple not only from an April 15th surprise down the road, but also a significant amount in future taxes owed. Knowing the various nuances and changes in the law allowed Dan to help the couple maximize their finances for the future.

Step 3: Tax-Savings Strategy

Although their CPA had provided some suggestions for tax planning in the U.S., the couple had no guidance on managing their foreign pensions into their long-term tax and income plan. The income from the foreign pension, as well as the potential tax implications, became a critical component to their financial future, and thanks to Dan’s education and knowledge on global tax structures and professional network they were able to get accurate, complete answers to help build a strong plan.

Step 4: Continued Tax Planning for Overseas Living

Recognizing that establishing residency in another country would have additional implications on the couple’s financial future, Dan continued to advise and support the couple on balancing U.S. tax planning and retirement planning, against the regulations for Christopher’s country of birth and the third country where they hoped to establish residency. Thanks to Dan’s experience he was able to advise them on best practices to access and protect their money while overseas, insurance needs, and more to ensure the couple would have the best opportunity to live their dream.

So, the question is, where are Sarah and Chris now?

Two years later, ahead of schedule, they are overseas enjoying the sun, art and food of the Mediterranean, with frequent trips stateside to enjoy their role as grandparents knowing that Passport Wealth Management has their best interests at heart.

All investing involves risk, including the potential for loss of principal. There is no guarantee that any investment plan or strategy will be successful.  As client names and details have been changed, this is not a statement of client experience.  The situation described above is reflective of the processes, views and opinions of Passport Wealth Management and does not reflect the opinion or testimonial of any particular client. 


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