I might move outside of the US for retirement, might be going for a job assignment outside of the US at some point.
Are there any drawbacks? for example, are there difficulties getting banking or other services in Europe? Has it become easier now in Switzerland? Other countries such as Portugal, France,..?
You’d face the same problems as any other American, probably limited bank choice here in Switzerland though you might be luckier if you want to get a mortgage as you’re Swiss as well, still have to file US tax returns no matter where you live in the world.
But you can relinquish a green card, no question asked. Renouncing US citizenship is a heavier process and may involve an exit tax or even, subject to government caprice, continuing to be liable to US taxes even without the citizenship.
https://travel.state.gov/content/tra…ty-Abroad.html
https://www.greenbacktaxservices.com…free-us-taxes/
Correction: You may face the exit tax when relinquishing a green card, but less likely and in any case an easier process.
https://www.hrblock.com/expat-tax-pr…-the-exit-tax/
And of course cheaper to give up the Green Card than the citizenship - free versus $2,350.
My thoughts are: returning to the US if I decide or need to leave for work for a while? I am assuming that after some time I would loose "permanent resident" status.
Keeping bank accounts, investments, etc in US?
On the investments side, you are looking at the worst of both worlds unless you commit to staying in the US. Banks and investment houses in Switzerland and much of the world will be turned off by a US passport , due to FATCA. (Many will wink-wink a green card.) Meanwhile, US banks and especially investment funds will be turned off by a non-US address . That will limit your option in both places.
How does one solve for this, leaving the US? Keeping bank accounts, brokerages, etc? Either as US citizen or GC holder?
You can keep your plain bank accounts but your investment choices will be limited.
You can keep your mutual funds (401k/IRA) but you will be given at best limited investment choices and you may not be able to rebalance. Basically, they don't want new (re)investments from non-residents.
I will need to bring this up with my finance planner, whether there is an impact with them.
Are people trying to keep somehow a US address?
Have not thought about that.
I need to renew the GC this year. So, I figured citizenship is $750 vs GC renewal $540. If I renewed more than one more time it would be cheaper, now
Contrary to the experiences of many, banking has not been a problem. We have accounts and a mortgage. No one ever blinked on seeing our blue passports, it's really been a non-issue. But then, we had those accounts pre-2008.
There are some investments here we cannot make as US citizens, to simplify our lives we invest most heavily through our US-side advisors. OH got kicked out of his company's Pillar 3 plan, as the the fund invests in things that are verboten for Americans, so they didn't want to deal with us. Not much of an issue, though, as Pillar 3 doesn't help us much (see the tax stuff below.)
For us the largest issue is our US tax burden. Yes, there are ways to reduce that, but nonetheless (individual circumstances aside) you can find yourself paying a painful chunk to Uncle Sam. Our US taxes are higher than our Swiss taxes, so deductions on the Swiss side are of limited use for us.
One thing that hurts us is the way pensions are viewed by each side. The US does not consider the Swiss pillars as qualified pensions - meaning that not only do you NOT get any tax relief on money that goes into your pension, but instead BOTH your contributions to Pillar 2 AND your employer's contributions are taxed as income in the year the contribution is made. So you are taxed each year on money that you cannot access.
When it comes time to retire, you have another issue: You have already paid your US tax on Pillar 2, thank doG - but not your Swiss tax so that remains due. But your Swiss pension distribution isn't considered earned income by the US at that point.
All in all, our combined tax burden is a little higher than if we still lived in the US, and significantly higher than if we were living in Switzerland without the blue passport. Living in Switzerland as US citizens has come with some not-insignificant financial downsides.
You can mitigate this with financial planning from a professional qualified in both systems. Specifically, as you look for a place to live, look at how your local tax rate affects your US tax. Hint: American might not benefit from living in one of the Steuerparadis Gemeinden. On the other hand, deductions taken on your US tax for the amount of Swiss tax paid when living in a high tax Gemeinde can toss you into AMT-land.
Some other quirks we have run into:
Property sale: The US considers the sale of foreign property as both a property sale and a currency trade. This may or may not be an issue, depending on when you buy and sell.
Your other thread already discusses issues with the two pension systems, again, be aware of how a Swiss pension can reduce your US pension. The US applies the WEP to your Soc Sec.
I think the WEP problem will follow you even if you do not become a US citizen, but this should be checked. All the issues around the intersection between US Soc Sec and Swiss (or other) pensions likely apply to anyone receiving Soc Sec.
So why do I still carry the blue passport?
First, I can't ditch it as I have no other citizenship. (It is almost certain that we will never qualify for Swiss citizenship.)
More importantly - my family are all in the US. The pandemic really brought home the 'right of return' issue. I could visit my family, whereas many non-citizens couldn't enter the US for quite some time. There was a good decade while living here that I counted on being able to get back to the US within 24 hours if a crisis arose - during the pandemic that would not have been possible if I were not a citizen.
It's a big decision - wishing you all the best.
I carefully looked at the pros and cons of keeping my US citizenship. Honestly, if I could have just kept it tucked away in a drawer, I would have kept it. But instead it costs me money every year to file my US taxes (I don't have to pay, at least, but I am not comfortable filing them myself, so I pay someone a fee to do the work for me and I know that it has been done correctly).
Plus the US wants to tax me based on any assets I might have. My husband (non-American) has our assets in his account, otherwise I would probably owe the US money.
The "pros" of keeping it? I honestly couldn't find any. I will never move back there, I can visit with a simple visa, and I am much happier here in Switzerland. Obviously you have an entirely different situation, but keep in mind that if you choose to pursue US citizenship, you will be forever responsible to file (and possibly pay) taxes every year, no matter where you decide to live.
And if you change your mind later? It is an expensive "mistake"
I believe the root question is simply: "is there a difference between GC and passport when it comes to double taxation, exit tax etc."
I believe the answer is no in principle. The difference is that with passport one would pay citizenship renounce fee.
There is on additional important detail: my spouse is already US citizen...
Admittedly I know very little about the subject because my eyes start to glaze over when I get to the bits about 'non-resident aliens' while trawling through IRS publications. But while you are weighing up pros and cons, since you are married to a US citizen you should look into this topic, to see if after having moved abroad you would be considered a non-resident alien, and what effect, if any, that might have on you or your spouse.