Let's say, about chf 10k. I am a US citizen, but have no US bank accounts, no assets in the US.
If you were me, where would you look? Moderate risk, moderate growth, not short term.
Thanks.
I have a small amount of money I'd like to invest somewhere other than my savings account in the bank.
Some US$ stocks.
I suppose this isn't your question, but it's tough as a US citizen living here to get an investment account. Banks both at home and in Switzerland don't want to deal with us. The most lucrative solution I could find was having a balanced mutual fund in the USA, but I've had to use a relative's stateside address to keep it. Good luck. If you find a good solution, add to your thread!
As U.S. citizens and Swiss passport holders we have run into a stumbling block with our investments.
After leavung Switzerland a lifetime ago, we always planned to retire in Switzerland, which is why we have been holding onto our empty house in CH. Gradually a temporary move turned into nose to the grindstone with very few breaks for 21 years.
On return we hoped to supplement our income, before pension kicked n, by living off investments.
Now we learn that not only will we be subject to wealth tax upon return to CH, but will incur tax penalities if we invest in Swiss or UK funds. We are subject to FATCA.
Similarly, in a tit-for-tat, we will be tax penalized by Europeans including Swiss, for investing in U.S. stocks.
Therefore, to remain ccompliant imited to investing in reporting funds, which only yield around 3%-4%.
Double whammy- wealth tax and lower investment returns.
Bang goes our dream? What do we do now, suck it up or give up the Swiss house and live in U.S.?
We are pretty naiive and new to investments, never invested before; apart from 401K.
If we give up U.S. citizenship,.then I think we lose any Social Security contributions including pension.
If anyone has any advice or different info, I would love to hear it.
You don't.
Tom
Hoppy, another 'gotcha' for folks who have worked abroad to be aware of when planning retirement is whether a pension earned in another country (or a US pension on which you did not pay Soc Sec taxes) could affect your US Soc Sec entitlement via the Windfall Elimination Provision (WEP). From the SSA:
https://www.ssa.gov/benefits/retirem...anner/wep.html
Calculator:
https://www.ssa.gov/benefits/retirem...iaWepjs04.html
There are lots of other sites explaning the WEP with a bit more clarity, but I don't want to link a commercial site.
'Tis a bit of a minefield.
ETA:
Glad to see you back!
A few corrections, as Tom and Meloncollie have done.
You don't lose SS as Tom said but if may be diminished by windfall elimination, but as you seem to have spent quite a lot of working years in US as opposed to CH, this might not be a huge impact. Nevertheless, living in CH and trying to live off US SS won't get you far. I consider my future SS pension as coffee money, especially given the way exchange rates go.
The wealth tax, while there, is very low. Unless multimillionaires the impact is quite small, but does vary by canton.
But finding a legal way to invest in CH with the blue passport is near impossible. Ditto on the US side without doing something dodgy. If you are set to stay in CH, consider giving up the blue passport. That unlocks a lot of financial hurdles. Plus as retirees you can't claim the FEIE, making US taxation here more difficult and likely costly.
Wow thanks everyone. I love this forum!
As for investment check out Ameritrade.
https://www.tdameritrade.com/home.html
One can do business with them outside of the USA.
Fidelity is also possible. https://www.fidelity.com/
But once relocated out of the USA funds can only be kept as is. No trading except to sell.
Concerning US Social Security and Swiss AHV: there is a joint recognition of both programs by the Swiss and US governments - you can get AHV credit for having paid into Social Security, and vice-versa. I am in the middle of filling out the forms to do exactly that.
https://www.ssa.gov/international/Ag.../switzrld.html
"When you apply for benefits. You may have some social security credits in both the U.S. and Switzerland, but not have enough to qualify for benefits in one country or the other. The agreement makes it easier to qualify for benefits by letting you combine your social security credits in both countries. For more details, see the section on " Monthly benefits "."
.. and US-based TD Ameritrade lets you open a brokerage account online as a Swiss citizen, or joint US/Swiss citizen. Takes only a week or so to complete the process. Recently did both.
Thanks, but I had understood you could only combine if you do not have enough qualifying credits on one or the other, however if qualified already, they don't allow you to combine or top up.
Low cost ETFs through a broker who is happy to work with US expats, such as Interactive Brokers or Schwab
That was not my understanding. If you have enough credits to be recognized from both countries, you will get whatever you qualify for from Switzerland, and whatever you qualify for from the US minus the windfall elimination provision from the US (you will still get some SS money, just less).
Do make sure you run the numbers before claiming a foreign pension that triggers WEP.
If the calculators I've played with are even close to reality, it would make little sense for me to claim a Swiss pension, the WEP bite wipes it out.
(A fair amount paid into US Soc Sec, but I have not worked in Switzerland, so would only get a token amount based on OH's contributions.)
YMMV, but run the numbers.
How does one run the numbers.
There's a calculator on the US Soc Sec site.
After I've had another coffee I'll look for the link.
(One needs caffein to tackle that labrynth of a site...)
Now that my caffein reservoir has been refilled...
Since last i looked at the site, there appears to be a new screening tool to determine if you are WEP affected. My very superficial peek hints that changes might be slightly more favorable than when I looked into this some years ago. Will need to run real numbers again.
But anyway, start here:
I have the US side sorted, that is very easy. Also get the annual estimate by mail from SSA.
But I find the CH side is a nightmare. The entirely useless online calculator seems to just assume you worked your entire life here with no way to adjust years. Any ideas on how to get realistic AHV estimate that adjusts for this?
Also, they keep talking about removing the WEP so keep an eye on it, although I am never too optimistic. Although I think there's higher chances of that compared to removing FATCA or CBT.