American retirees abroad

Tax Residency Profile: Tax residents of the United States (or Canada) and possibly tax residents of another country

Income Profile: US or Canadian source income


It is becoming increasingly difficult to retire and afford to live in North America. As a result, there are a number of Canadians and Americans who believe that their money can go further if they live abroad. To be clear, these are people who:

1. Receive their income from US or Canadian sources (pension, Social Security, Canada Pension Plan, etc.)

2. Live outside the United States or Canada on their US or Canadian source income.

Although they live in abroad they do NOT work abroad and may NOT be “tax residents” of their country of residence. Alternatively if they are “tax residents” of other countries all of their income is foreign source.

“Retirees abroad” often are ONLY US citizens and neither can nor wish to renounce US citizenship. They continue to file US tax returns as though they actually lived in the United States. Retirees abroad often have little interest in tax reform and in some cases would not benefit from it.

In fact, they may be “worse off” if they were taxed as nonresident aliens.