Hello and welcome.
spacetsunami wrote: ↑Wed Jun 07, 2023 1:52 pm
I always thought I was pretty good with money, but I’m only now realizing that my definition of pretty good has just meant that I have never been in long-term debt and I live comfortably. In the past justified not doing more investing because I was incredibly dedicated to paying off student loans as fast as possible, and my parents’ investing skills are at the level of “our house is our investment.”
What seemed like an above average head start in investing compared to my peers has turned out to be a measly pittance. Add in a few years of taking time off to travel between jobs and up and moving to a new country. I feel like I’ve lost at the investing game. I know it’s never too late so I want to take the next steps to get back on track. For me, this means tying up the messy loose ends I left in the US now that I’m living abroad.
At 34, it's far too early to say you've lost at the investing game. Working and raising a child abroad is a big task especially in a second language. You are on the right path now.
spacetsunami wrote: ↑Wed Jun 07, 2023 1:52 pm
Below is my situation and the questions I think I need answered in order to make a decision regarding my US money situation:
Tax situation
- US citizen nonresident
- 34 yrs, resident in Italy since 2021
- Married to nonresident alien (Italian)
- works for European company
- File Married Filing Separately
- Filled out FTC on 2022 taxes, FEIE for 2021
- One child, under 1 yr, dual Italian/American citizenship
- Envision eventually moving back to the US within the next 5 years, but not 100% certain of this
Just a little reminder here that since you gave up the FEIE in 2021, you can't claim it again for another five years without IRS written permission.
Also, be aware that the spouse's SWDA and VWCE will be a little problematic if he gets a green card as they are non-US domiciled funds and subject to harsh PFIC taxes. It's a thought for another day but one to be aware of.
Also, since you claimed the FTC and not the FEIE, you are eligible to make IRA or ROTH contributions.
spacetsunami wrote: ↑Wed Jun 07, 2023 1:52 pm
Current US Investments/Bank situation:
- Fidelity
- Bought company stock at job 1, $11,00
- Opened a 401k with job 2, $1,600
- Money sitting in my account, uninvested, $2,000
- ETrade
- Bought company stock at job 2 in US, $2,000
- Vanguard
- Roth IRA (VFFVX) - opened in 2015, $5,700
- Bank account with over $10,000 (from selling my car)
- Using parent’s address for all accounts
More details (not sure this is relevant):
I do have an Italian bank account (less than €10k) and work pension plan (Italian) and my husband has several bank accounts. We keep our accounts completely separate and I have no authority over any accounts he has opened. He has one savings account with +€15K and has bought EFTs (SWDA and VWCE - they are separated because the latter is essentially savings for our kid).
You are aware of the FBAR filing requirement if your bank account goes over $10k right?
https://www.fincen.gov/report-foreign-b ... l-accounts. Your child will have the same requirement as will your husband if he gets a green card. It's not difficult to file even if a little worrisome over giving out account numbers.
spacetsunami wrote: ↑Wed Jun 07, 2023 1:52 pm
Questions:
- Should I roll both my stocks and 401k to my Roth IRA? When?
VFFVX is a great option, so it'd make sense to put the 401k into an IRA. I am not sure about how Italy might tax that income. If Italian rates are higher and you'd be subject to Italian taxes, then I'd wait till you are back in the US.
Is the company stock tax sheltered? That's the only way you could roll it over I think.
spacetsunami wrote: ↑Wed Jun 07, 2023 1:52 pm
- What should I do with the uninvested money siting in Fidelity?
Figure out your AA (asset allocation - US stocks, intl stocks and bonds) and then invest according to that. VFFVX is about 54% US stocks, 36% intl stocks and 10% bonds. So I'd just use 54% FSKAX (Fidelity Total Market Index Fund), 36% FTIHX (Fidelity Total International Index Fund) and 10% in a money market fund or cash in your Italian bank. And I'd try to hit that allocation over all of my accounts combined.
You can see funds here
https://www.bogleheads.org/wiki/Fidelity
spacetsunami wrote: ↑Wed Jun 07, 2023 1:52 pm
- What should I do with the +$10,000 in the bank? I’d like to invest it but the one upside of having it readily available is that I visit the US every year and it’s nice not having to pay with European credit cards
Personally I would want to invest it even if only in a money market fund or short term CD which are paying well now. I personally would use your parent's US address to get a US credit card. Living overseas for a number of years, I experienced numerous times when I needed a US card. Usually it was on a site (airlines or even ordering food at a restaurant within Disneyland) that seemingly accepted foreign cards but had a bug that wouldn't accept a foreign zip code or something like that that prevented the transaction. And sometimes foreign card rejected charges for travel within the US - actually VISA would reject it and the bank would never see it and it was a hassle to figure out why it wasn't going through. I might look at the Fidelity cards since your money is already there.