Rosaria I. Says:
I’m Italian with dual citizenship. I lived for many years in USA and I would like to retire in Italy, near Rome. What is the first step that I need to do? It is a little overwhelming. If you have a bank account in the USA, how do you transfer all the funds in Italy? Will I still be taxed from IRS here? What about medical insurance?
Global Diversification Expert Ted Baumann Says:
Hi Rosaria,
Let’s start with the bank account. If you’re living in Italy full time and a citizen, you should have no trouble opening a bank account there. Then, you have many options for transferring funds from the U.S. to Italy. Which ones make the most sense for you depend on how you plan to manage your money.
If you’re going to transfer everything to Italy all in one go, then you’ll want to work with a specialist money transfer agency so you can get the best possible exchange rates and avoid bureaucratic hassles. Essentially, these agencies help you transfer funds for a small fee. But it works out much better than trying to wire money from a U.S. bank, which charges you ridiculous upfront fees and gives you a terrible exchange rate.
The other alternative is to transfer money on an as-needed basis, using transfer services like Remitly, Xoom or Wise. This works particularly well if you’re receiving regular Social Security or pension payments.
The money comes into your U.S. Bank account then you just log on to their app or website and transfer as much as you need as often as you need to. But you do have to pay attention to monthly and other sending and receiving limits, which can vary from country to country.
When it comes to taxation as an American citizen, you will be taxed by the IRS no matter where you live in the world. If you are living on Social Security or pension income, taxes on that income will be withheld before it is dispersed to you.
Depending on your tax situation in Italy, you may be taxed there as well, but Italy in the United States have a double taxation agreement. That means that you shouldn’t be taxed on the same income twice. Generally, any income taxes you do pay to Italy will be offset against your U.S. taxes, so you don’t pay any more.
You’ll want to get local medical insurance. It is possible to use U.S. based medical insurance for occasional travel, and even sometimes for semi long-term surgeons abroad, but once you are living permanently somewhere else come up you’ll want to get a medical aid program from a local setup.
Remember also that local medical aid providers will coordinate their services with those of the public health system, which are much stronger and comprehensive in Europe than they are in the U.S. So you’ll probably save quite a lot of money that way.
To learn more about how to get set up in Europe, you might want to consider joining IL’s European experts for The European Living Seminar taking place this Wednesday.
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