In this episode of The Smarter Planner podcast, host Belle Osvath, CFP®, sits down with Jane Mepham, CFP®, founder of Elgon Financial Advisors, to discuss the unique challenges and opportunities of financial planning for immigrants and foreign nationals living in the United States. Jane, a former H-1B visa holder herself, brings a deeply personal and professional perspective to helping clients bridge two financial worlds- from understanding tax treaties and global reporting requirements to navigating cultural expectations around money and family support.
She also shares insights from her podcast, The International Money Café. She explains how collaboration between financial planners, immigration attorneys, and tax experts is essential for clients with cross-border ties.
Website: https://elgonfa.com
Podcast: https://www.theimcafe.com
LinkedIn: https://www.linkedin.com/in/janemepham/
Kitces Article-
Recommend a podcast guest here: https://www.surveymonkey.com/r/PWXHTV7
The Smarter Planner podcast is produced by the Financial Planning Association National Capital Area Chapter (FPA NCA) for educational purposes only. Belle Osvath and FPA NCA do not endorse specific individuals or services mentioned.
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Episode Transcript
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(00:06):
Welcome back to the Smarter Planner Podcast.
I'm your host, Belle Osva.
In this episode, I speak with Jane Miefammer
about the unique challenges and hidden opportunities of
financial planning for immigrants and foreign nationals in
the U.S. Jane brings both a personal
journey and professional experience to the table, showing
how to help clients bridge two financial worlds,
from deciphering tax treaties and global reporting requirements,
(00:29):
to navigating cultural expectations around money and family
support.
If you work with immigrant or foreign national
clients, or if you've ever wondered how much
your citizenship shapes your financial future, this is
an episode you won't want to miss.
So stay tuned, and you're sure to become
a Smarter Planner.
(00:53):
Today, I'm speaking with Jane Miefam, CFP, and
founder of Elgon Financial Advisors, which specializes in
helping high-earning immigrants and foreign nationals make
the most of their financial resources.
She's also co-host of the International Money
Cafe Podcast, which focuses on cross-border finances,
taxes, and compliance.
(01:14):
Jane, thank you for being here.
Thank you for that lovely welcome.
So you're here to talk about planning for
people with roots outside of America, which is
a rather large demographic.
Can you talk about that group of people
and how they're different than those of us
who are maybe more rooted here?
(01:35):
Excellent, and that's a great question to start
with.
Stats show that there's about maybe close to
50 million people in the U.S. who
were born outside, and all these people are
at different stages of what I like to
call the immigrant journey.
So you have people that came here, they're
now naturalized citizens, so they probably have citizenships
(01:57):
from two countries, or their country doesn't allow
dual citizenship.
They've already lost their home country's citizenship, but
they still have assets and family back home.
And then you have the second group, which
came here on what we call immigrant visas.
An immigrant visa allows you to become a
permanent resident, commonly known as a green card.
(02:19):
You can then decide if you want to
become a citizen, and that's another part of
your journey.
And then you have the third group, which
I work a lot with.
These are people who've come to the U
.S. on non-immigrant work visas.
So let's say H-1Bs, O-1s, E
-3s, those kind of visas.
And with this group, the intent is, according
(02:40):
to the law, is that they're only here
for a while, and then they'll go back.
But based on the visa that you're on,
you could become a green card holder.
And again, that's a whole list of processes
that you need to go through.
Does that answer your question?
Yeah.
And as you were speaking, it really made
me think there has got to be a
totally different approach to financial planning with these
(03:03):
people, because it's a big question mark whether
they're going to stay.
Correct.
Whether or not they'll keep accounts here.
Are they sending money back home?
Basic things like banking have to be a
little bit more complex because of how long
have they been here?
Where are their paychecks going?
I mean, just even the basics seem like,
for me, I'm like, I don't even know
how any of that stuff works.
(03:25):
Right.
That's a question that I deal with all
the time.
Part of it is I've been on the
same journey.
So these are questions that I've dealt with.
I was once on the H-1B visa.
My spouse was on an L-1 visa
from a different country.
So we've kind of dealt with all that.
And as we went through the process, what
I realized is there's a lot of us
(03:46):
in this situation and people don't know where
to start.
Now, a big part of it is you
also have those that came to the U
.S. on student visas who end up on
the work visa.
So that's like, I guess it's all part
of the same group.
Let's just talk about non-immigrant visas to
start with.
They may have come here, most likely came
here as students.
(04:06):
That means they're probably like college students.
So their values are already all formed, their
cultural background.
Most of them are most likely first generation,
like, OK, we're sending you, Jane, to America,
go pursue your American dream.
And then, of course, we expect you to
help us back.
And that's the cultural stuff that I talk
about.
(04:26):
And then you have those are the ones
that came here straight from their home countries
on the immigrant visas.
The age range is usually like 25 to
maybe 50.
So that really is the time when they're
probably making the most amount of money, but
also when they have a lot of transitions.
And so you're right.
There's a whole lot that goes into it.
(04:48):
And then, of course, you put them into
a whole new financial system.
And so I tend to do a lot
of education when I start working with these
people just to explain, OK, I know where
you're coming from.
I know what they call back home.
It's not really what we call it.
So a lot of education before we can
even figure out the complexities of the financial
(05:08):
situation.
Yeah, I can imagine this has got to
be a lot for someone to navigate.
Not only are you changing countries, but you're
changing the entire financial system.
Do most people find you right at the
beginning or are they already having trouble by
the time you start working with them?
You could probably get so far.
And then especially when it comes to any
kind of tax planning or retirement savings like
(05:29):
that has to be a big question mark.
When I started out initially, most people found
me after they'd already been here.
The other thing that tends to happen is
when people are thinking about coming here, finances
and taxes is the last thing they're thinking
about.
It's more, OK, I got a job.
(05:49):
Where am I going to live?
Apartment?
I don't know.
I've had about credit cards and that type
of thing.
But lately, people have started finding me before
they get here.
And that really is the best option.
If you find me, we'll do an educational
session before you even get here.
And that will make such a huge difference.
(06:11):
So I think just talking a lot more
about it is the ideal situation is find
me before you get here.
But if not, OK, once you get here,
find me and we'll go from there.
Do you collaborate with other advisors that maybe
have clients they've been working with that they've
been managing the money?
But then when it comes to actually doing
planning, it's a different ballgame because these people
(06:33):
aren't planning to stay here or if they
are planning, it's more tentative or they're sending
money home.
How do you interact with other advisors that
are dealing with these problems?
I was just at the X, Y, P
and Life conference this past weekend.
Oh, wow.
Yeah.
A real talker.
She's a cross-border planner like me, but
(06:53):
she's based overseas, had a session.
And what was so interesting about our session
was she's talking more about people that have
already left the U.S., you know, U
.S. expats outside, which is what she's doing.
And I'm talking more about people coming in
to the country.
And what we explained to the group, and
I think that was probably one of the
(07:13):
major takeaways, is if you're not sure, let's
put it that way, of how to deal
with some of this, the best thing to
do is reach out to a cross-border
planner.
It will probably save you hours and hours
of research and you're sure you're going to
find the right information.
So to your point, I do this a
lot where people will reach out and say,
(07:35):
OK, this is the current situation.
I try to be as active as I
can, but not always on like, you know,
the FPA boards, the XYP and Facebook groups,
just answering questions from advisors.
I'm also a member of a couple different
networks that just work with cross-border planners.
And it really helps because you can bring
(07:56):
all these questions to the group and maybe
somebody else has worked with a situation like
that, or you can help each other out.
But it really is a space where I
think advisor collaboration is so, so key, because
on top of that, you have all these
other professionals that we want to work with
in the space.
(08:16):
I have great relationships with a lot of
integration lawyers, cross-border planners, because every one
of these situations probably needs a different set
of skill sets, which I'm usually the first
person to say, I don't have that, but
so and so, and they might be able
to help you.
I think you're right.
I mean, it's got to be different for
(08:37):
every country, right?
How they do things with their banking and
taxes, especially.
Can you give me an example of someone
that you've helped navigate this?
Think of a country, and I'll come to
a specific example where they call a checking
account.
They don't call it a checking account.
Even where I come from, I'm from Kenya,
(08:57):
we call it a current account.
Just that alone is already a huge difference.
Or the financial system is so different, they
don't trust the system.
And so they're coming in here with the
same mindset, and so you have to start
by educating them to understand this is a
different system.
(09:18):
So some of the clients that I work
with, thinking I recently concluded an engagement with
somebody from Mexico, very different system, even though
we're sort of close to each other.
Whatever products they have, and we probably can
talk about that.
Some of them are not suitable, and I'll
explain what I mean for somebody who's a
(09:39):
tax resident here.
So pretty much almost all my clients, and
not everybody is an immigrant, but all the
ones that are coming from different countries, we're
dealing with a lot of those issues, just
the language, me doing a lot of education
around what things are called over there, and
what it means here, and how do we
(09:59):
bridge the two.
What about when it comes to retirement accounts?
Because if you put money in an IRA
here, or a Roth, I'm dealing with that
right now.
What I've said to other advisors, all these
things we have in the U.S. are
really designed to work in the U.S.,
within the U.S. tax code.
(10:20):
And if you think of it that way,
it makes life a lot easier when we
start moving outside.
So that's the first thing.
So you got HSAs, you got RO1Ks, you
got Roth accounts.
All those accounts are meant for people who
are going to retire in the U.S.
So that's the first thing.
I actually did a kids' article on this.
(10:41):
Okay, now, you're here, let's say, on H
-1B visa.
These visas are not meant to be permanent.
You could switch to a green card for
it to become permanent.
So technically, like the H-1B visa, let's
say, after six years, you need to leave.
These six years you're here, you really want
to be saving, obviously, because it's probably some
(11:02):
of your best earning years.
And so from there, you then leave.
And what I've seen is you take all
the things you had in the U.S.
and you take them out and kind of
expect that your home country tax code is
going to treat them the same way.
It doesn't.
So here's the crux of the matter.
(11:24):
The U.S. taxes you on worldwide income.
Once you become a U.S. tax resident,
it doesn't matter what you have elsewhere.
You could have things in your country, on
the moon, some planet.
The U.S. wants to tax you on
that, and they will tax you on that.
(11:45):
So that's a first.
Sounds right.
Yeah.
They really want to know what's happening out
there.
And I said to people, don't try to
hide, because in 2010, they signed this through
the FATCA, which kind of forces other countries'
banks to sort of report back on you
or to report to the U.S. what
(12:07):
assets they have that belong to U.S.
tax residents.
So that's the first thing.
OK, now you're here.
You know you're reporting on everything.
You now leave, let's say, for example, which
is a case I'm dealing with.
You go back to India.
India looks at your situation and says, great,
we're so happy to have you back.
What overseas assets do you have?
(12:29):
And, oh, you've got a Roth account.
We don't know what a Roth account is.
As far as we're concerned, this is just
a taxable account.
And so we're going to start taxing you
on that.
So there's a huge mismatch at that point,
because you were saving, thinking this thing will
be tax free, and the U.S. is
looking at it as being tax free, so
(12:51):
we don't need to track bases and all
that stuff.
And India says, uh-uh, we need to
tax you on that.
So that's the first thing I'll always say.
We need to think about the accounts you're
saving me and where you're going to be
when you use these accounts.
Now, when it comes to specifically, let's say,
IRAs and 401ks, there is tax treaties.
(13:14):
Hopefully, it's about maybe 70-something odd tax
treaties between the countries that at least would
say, OK, this is a pension in the
U.S. OK, you people in India, for
example, you can treat it as a pension
as well.
At least a few of them will recognize
retirement accounts.
But when you finance out the money, there's
(13:35):
still the tax implications.
Now, if there's a tax treaty between the
two countries, again, let's use India as an
example, your 401k, the U.S., of course,
wants to tax that because it's a 401k.
If you've left, they'll tax you at like
30%.
It doesn't matter what technically your tax rate
would have been.
If there's a tax treaty, then that gets
(13:57):
modified to something like 15%.
But you're still paying taxes, but hopefully not
as much as it would have been without
the tax treaty.
So it's important that we know where you're
going to be moving to or you're likely
to be moving to before we talk about
what to invest in.
If you leave this country and you no
longer have a U.S. mailing address, don't
(14:19):
most broker-dealers not want to service your
account anymore because you're out of the U
.S.? Yes, it's true.
Because of FATCA, once again, a lot of
custodians, you're right, don't want to deal with
people that have put a foreign address on
the account.
And you really should put a foreign address
on it because you're no longer a tax
(14:40):
resident.
So these two types of people, those that
were here on temporary visas, you're now considered
an NRI, non-resident Indian, or a U
.S. expert that's moved overseas.
So what you need to do is before
you leave, find a brokerage that allows you
to put a foreign address on your account
and most likely move your money to that
(15:03):
firm.
That's what it comes down to.
So have you found that people coming from
other countries, they have a different view on
what assets they want to invest in, their
risk tolerance is different, or are they less
interested in investing in their more physical assets?
What have you seen?
It's a little bit of a mixed bag.
If I think of myself that moved 3
(15:25):
,000 miles to a brand new country, we're
most likely going to have a higher risk
tolerance if you think of how we define
it here, right?
And so I find a lot of the
people that come on some of those temporary
visas, their risk appetite tends to be a
little bit high.
And I know this is a generalization.
(15:46):
And they're also very interested in, a lot
of them will be trying to pursue FIRE,
the FIRE movement.
So they'll talk a lot about other assets.
Real estate seems to be a big one,
like passive income.
And for whatever reason, a lot of people
think passive income, they think real estate.
And then depending on where they're coming from,
(16:09):
there's also a huge appetite to invest home,
whenever home is.
So if I'm thinking, again, let's use India
as an example.
If you came here on the H-1B
visa, and let's say you really want to
get the green card, your company can apply
for that green card for you.
But right now, it's going to take you
(16:29):
20, 30 years if you're lucky to get
that green card.
So a lot of people will look and
say, you know what, I'm not going to
wait.
So I'm just going to do as much
as I can here, invest home, and off
we go.
So I've seen, I'd say the risk tolerance
tends to be a lot higher.
They really want to explore other options.
But of course, you still have to think
(16:49):
about the visa status before you get into
this.
So there's also a lot of education around,
you need to be thinking about these things
if you're not going to be here the
next 5, 10 years.
And then when they go home, and again,
I'm using home as your home coming from,
it's, I think a lot of rental property.
They also want to invest in their stock
markets back home.
(17:10):
And that's where we really have to have
a conversation.
I'm like, as a US advisor, I can't
really advise you on what to invest over
there.
But I do want to caution you that
there's some things you may not want to
invest in just because of the tax implications.
Because as long as you're in the US,
(17:31):
we're very interested, and we want to know
everything about what you're doing with your money
outside.
I had never thought about the fact that
people who come over here are already higher
risk, because they took the risk to come.
So they're sort of self-selecting.
That's such a good point that I had
never really put two and two together, but
it makes perfect sense.
(17:52):
Yeah, you're willing to leave everything.
It's like, what's the worst that can happen?
When somebody comes over, like our first conversation,
I now bring it up, whether they're going
to become a client or not.
And I'll ask, do you have assets invested
overseas?
And if they do, I'm like, I really
would just like for us to talk about
it.
Because what happens is once you become a
(18:14):
US tax resident, and you're supposed to report
everything overseas, if you have, let's say, there's
something called the FBA.
If you have accounts more than 10K, just
one day, it's 10K plus, you need to
report that.
There's no tax implications, but you need to
report it.
If you're invested in, let's say, mutual funds,
(18:37):
stocks, anything else, you need to report that
on a different form, and that's actually taxed.
And then if you're invested in foreign registered
mutual funds, which are the worst, they fall
into something called APIFIG, which stands for Passive
Foreign Investment Company.
In the US, taxes that so, so badly,
(19:01):
that's the only way to put it.
You could end up paying up to like
50% of when you get into that
account, whether it's recognized or not.
And so what we'll say to people is,
I just want to make sure I educate
you on this.
If you have this kind of assets, you
may have to sell them or just deal
with having to file taxes on these things,
which is not fun.
(19:21):
IRS says it takes 25 hours to do
what's called an 8621 form for one of
these mutual funds.
So just want to let you know, this
is what it is.
We can find a cross-border planner that
will help.
But I also know they're probably not very
keen because you need to charge them appropriately
for that kind of money.
(19:42):
So that's something I caution people about.
We definitely want to look at what you
have.
And if you haven't been filing, if you're
talking to me after you've been here for
a while, IRS has actually created what are
called streamlined filing process, because I think they
know people don't know that allow you to
(20:02):
come into compliance with some of these things.
So that's always a good one to bring
to people's attention.
That's a really good point.
Can you talk a little bit about your
podcast, The International Money Café?
Sure.
So The International Money Café podcast, I do
it with, she's become a really good friend
now, my cross-border tax professional.
Her name is Manasa.
(20:23):
And the way the podcast started was we
used to meet every Friday and just talk
about these things, you know, these cross-border
ideas, cases, and things like that.
And one time you were like, why don't
we just record this stuff?
And so we started recording it.
So it really is a coffee chat.
And so within the podcast, we'll talk about,
(20:45):
you know, finances, obviously taxes, all looked at
through your immigration lenses.
And then we're both immigrants.
So we hear, and actually we've both become
citizens.
So we'll also talk about our lived experiences,
what it means to move to the US,
to another country, and what are some of
the things that we So it's a fun
(21:06):
podcast, but we also address very serious issues.
Like I said, all the tax things that
you can think about, and just life in
the US.
And from what we've been told, it's a
good resource, not only for our end consumers,
which is who we were thinking about, but
also other planners who are interested in the
subject.
(21:27):
It's a fun one.
Everybody should check it out, vimcafe.com.
I have one question that I was thinking
about.
Right now, we have a lot of policy
changes going on in our government.
Are you seeing that trickle down, that uncertainty
around these policies?
Is that trickling down to your clients?
Is it something that's more set in law,
(21:48):
and you feel like it's going to be
a gradual change?
How are you viewing the changes?
It's very stressful, because things are changing.
People panic.
I actually had somebody reach out from me
back home saying, are you okay?
Do you have to leave?
So you can see the miscommunication that happened
even to the people outside.
So the people here, because nothing was clarified
(22:09):
at that point, another part of that announcement
also indicated when you come into the country,
would need to see this stamp to show
that you've actually paid the fee.
And so it wasn't explained this impact.
People who were on their way out, literally
on H-1B visas, turned around to come
(22:31):
back to the country.
People who were like in India, literally cut
short their trips to come back.
So that's a kind of anxiety that we're
talking about.
So with all this going out, people are
afraid.
I spoke to somebody the other day, and
it was so sad, because I know they're
(22:53):
here on the H-1B visa, and they
said to me, Jen, I'm afraid to leave
the house.
It would be nice if this was communicated
nicely.
And I know immigration lawyers are doing all
they can to kind of, like that Saturday,
I think I was on LinkedIn a lot,
and it was like every 30 minutes, oh,
here's a new update.
Here's a new update.
Oh, it doesn't affect everybody.
(23:13):
Okay.
It affects only these people.
But then when you come into the country,
you don't know who you're going to find
at the airport, you know, immigration check.
So there's a lot of anxiety for sure.
And that does not bode well for people's
livelihoods and their psychology.
So what I'm also seeing a lot of
(23:35):
is people saying, we're not sure about this.
I think we're just going to plan to
leave.
And so we've had a lot of those
conversations with Manasa, and what we ended up
doing, actually, we created a checklist for anybody
who's on a work visa that's thinking, I
need to go, because we can't talk to
(23:55):
everybody.
So they go to the IM Cafe store,
we have a 52-page checklist to help
them plan their departure.
Some of, like what you were talking about,
addresses, accounts, what do I do with my
house, what do I do with whatever the
case may be?
So I'm definitely seeing a lot of that.
(24:18):
I have one question, the same question I
ask everybody.
What is the one thing you think financial
planners should know, but don't?
I'm going to talk about, again, cross-border
planning.
And this was reinforced at the XYPN live
conference.
When you have a cross-border client, or
a client that has roots in other countries,
it's not planning as usual.
(24:39):
There's so much more you need to consider,
not only their cultural background, which I think
is huge, but also the technical aspect.
So the countries, their immigration status, where they
want to be when they retire, because that's
always completely different.
And of course, their whole situation.
So the best thing I say is, find
(24:59):
another cross-border planner, have a quick chat
with them, and hopefully they'll be able to
guide you in the right direction.
But I think if you do that, you
have a shot at getting this thing right
for the client.
Well, thank you so much.
That's an excellent answer.
If people want to find you, they can
find you on LinkedIn, and at your website,
which is...
(25:20):
algonfa.com.
So algonfa.com, or LinkedIn, or they can
also find our podcast on theimcafe.com.
And we will provide links to both of
those in the show notes, as well as
a link to that article, the Kitsitz article
that you mentioned.
I think that'd be interesting to share.
Jane, thank you so much for being here.
(25:42):
Thank you, Belle.
This was lovely.
All information in the Smarter Planner podcast is
for educational and informational purposes only.
Belle Osvath and the FPA NCA do not
endorse or recommend any of the people, products,
or services featured or discussed on this podcast.
And now it's time for your FPA NCA
news and events update.
(26:02):
Tuesday, October 14th, from noon until one, there's
a webinar about navigating family dynamics in senior
living decisions.
It will feature Ginger Noyce and Christy Kennedy,
founders of Silver Bridges Consulting.
And volunteers are needed for Wednesday, October 22nd,
from 1230 to three o'clock, the FPA
NCA GMU pro bono event at George Mason
(26:25):
University in Fairfax, Virginia.
This event has cashflow planning for wealth management
students at GMU, along with one-on-one
coaching sessions.
Volunteers arrive at 1230, one o'clock and
one-thirty, a presentation at one-thirty and
three o'clock with networking and one-on
-one coaching.
To find out more about these events and
to register, find us online at fpanca.org.
(26:48):
Thanks for listening.
And until next time, stay smart.
What key do you use when opening a
banana?
Kingdom?
Banana key?
I don't know.
(27:09):
A muggy.
That's better than it's good.
Welcome back to the Smarter Planner Podcast.
I'm your host, Belle Osva.
In this episode, I speak with Jane Miefammer
about the unique challenges and hidden opportunities of
financial planning for immigrants and foreign nationals in
the U.S. Jane brings both a personal
journey and professional experience to the table, showing
how to help clients bridge two financial worlds,
from deciphering tax treaties and global reporting requirements,
(00:29):
to navigating cultural expectations around money and family
support.
If you work with immigrant or foreign national
clients, or if you've ever wondered how much
your citizenship shapes your financial future, this is
an episode you won't want to miss.
So stay tuned, and you're sure to become
a Smarter Planner.
(00:53):
Today, I'm speaking with Jane Miefam, CFP, and
founder of Elgon Financial Advisors, which specializes in
helping high-earning immigrants and foreign nationals make
the most of their financial resources.
She's also co-host of the International Money
Cafe Podcast, which focuses on cross-border finances,
taxes, and compliance.
(01:14):
Jane, thank you for being here.
Thank you for that lovely welcome.
So you're here to talk about planning for
people with roots outside of America, which is
a rather large demographic.
Can you talk about that group of people
and how they're different than those of us
who are maybe more rooted here?
(01:35):
Excellent, and that's a great question to start
with.
Stats show that there's about maybe close to
50 million people in the U.S. who
were born outside, and all these people are
at different stages of what I like to
call the immigrant journey.
So you have people that came here, they're
now naturalized citizens, so they probably have citizenships
(01:57):
from two countries, or their country doesn't allow
dual citizenship.
They've already lost their home country's citizenship, but
they still have assets and family back home.
And then you have the second group, which
came here on what we call immigrant visas.
An immigrant visa allows you to become a
permanent resident, commonly known as a green card.
(02:19):
You can then decide if you want to
become a citizen, and that's another part of
your journey.
And then you have the third group, which
I work a lot with.
These are people who've come to the U
.S. on non-immigrant work visas.
So let's say H-1Bs, O-1s, E
-3s, those kind of visas.
And with this group, the intent is, according
(02:40):
to the law, is that they're only here
for a while, and then they'll go back.
But based on the visa that you're on,
you could become a green card holder.
And again, that's a whole list of processes
that you need to go through.
Does that answer your question?
Yeah.
And as you were speaking, it really made
me think there has got to be a
totally different approach to financial planning with these
(03:03):
people, because it's a big question mark whether
they're going to stay.
Correct.
Whether or not they'll keep accounts here.
Are they sending money back home?
Basic things like banking have to be a
little bit more complex because of how long
have they been here?
Where are their paychecks going?
I mean, just even the basics seem like,
for me, I'm like, I don't even know
how any of that stuff works.
(03:25):
Right.
That's a question that I deal with all
the time.
Part of it is I've been on the
same journey.
So these are questions that I've dealt with.
I was once on the H-1B visa.
My spouse was on an L-1 visa
from a different country.
So we've kind of dealt with all that.
And as we went through the process, what
I realized is there's a lot of us
(03:46):
in this situation and people don't know where
to start.
Now, a big part of it is you
also have those that came to the U
.S. on student visas who end up on
the work visa.
So that's like, I guess it's all part
of the same group.
Let's just talk about non-immigrant visas to
start with.
They may have come here, most likely came
here as students.
(04:06):
That means they're probably like college students.
So their values are already all formed, their
cultural background.
Most of them are most likely first generation,
like, OK, we're sending you, Jane, to America,
go pursue your American dream.
And then, of course, we expect you to
help us back.
And that's the cultural stuff that I talk
about.
(04:26):
And then you have those are the ones
that came here straight from their home countries
on the immigrant visas.
The age range is usually like 25 to
maybe 50.
So that really is the time when they're
probably making the most amount of money, but
also when they have a lot of transitions.
And so you're right.
There's a whole lot that goes into it.
(04:48):
And then, of course, you put them into
a whole new financial system.
And so I tend to do a lot
of education when I start working with these
people just to explain, OK, I know where
you're coming from.
I know what they call back home.
It's not really what we call it.
So a lot of education before we can
even figure out the complexities of the financial
(05:08):
situation.
Yeah, I can imagine this has got to
be a lot for someone to navigate.
Not only are you changing countries, but you're
changing the entire financial system.
Do most people find you right at the
beginning or are they already having trouble by
the time you start working with them?
You could probably get so far.
And then especially when it comes to any
kind of tax planning or retirement savings like
(05:29):
that has to be a big question mark.
When I started out initially, most people found
me after they'd already been here.
The other thing that tends to happen is
when people are thinking about coming here, finances
and taxes is the last thing they're thinking
about.
It's more, OK, I got a job.
(05:49):
Where am I going to live?
Apartment?
I don't know.
I've had about credit cards and that type
of thing.
But lately, people have started finding me before
they get here.
And that really is the best option.
If you find me, we'll do an educational
session before you even get here.
And that will make such a huge difference.
(06:11):
So I think just talking a lot more
about it is the ideal situation is find
me before you get here.
But if not, OK, once you get here,
find me and we'll go from there.
Do you collaborate with other advisors that maybe
have clients they've been working with that they've
been managing the money?
But then when it comes to actually doing
planning, it's a different ballgame because these people
(06:33):
aren't planning to stay here or if they
are planning, it's more tentative or they're sending
money home.
How do you interact with other advisors that
are dealing with these problems?
I was just at the X, Y, P
and Life conference this past weekend.
Oh, wow.
Yeah.
A real talker.
She's a cross-border planner like me, but
(06:53):
she's based overseas, had a session.
And what was so interesting about our session
was she's talking more about people that have
already left the U.S., you know, U
.S. expats outside, which is what she's doing.
And I'm talking more about people coming in
to the country.
And what we explained to the group, and
I think that was probably one of the
(07:13):
major takeaways, is if you're not sure, let's
put it that way, of how to deal
with some of this, the best thing to
do is reach out to a cross-border
planner.
It will probably save you hours and hours
of research and you're sure you're going to
find the right information.
So to your point, I do this a
lot where people will reach out and say,
(07:35):
OK, this is the current situation.
I try to be as active as I
can, but not always on like, you know,
the FPA boards, the XYP and Facebook groups,
just answering questions from advisors.
I'm also a member of a couple different
networks that just work with cross-border planners.
And it really helps because you can bring
(07:56):
all these questions to the group and maybe
somebody else has worked with a situation like
that, or you can help each other out.
But it really is a space where I
think advisor collaboration is so, so key, because
on top of that, you have all these
other professionals that we want to work with
in the space.
(08:16):
I have great relationships with a lot of
integration lawyers, cross-border planners, because every one
of these situations probably needs a different set
of skill sets, which I'm usually the first
person to say, I don't have that, but
so and so, and they might be able
to help you.
I think you're right.
I mean, it's got to be different for
(08:37):
every country, right?
How they do things with their banking and
taxes, especially.
Can you give me an example of someone
that you've helped navigate this?
Think of a country, and I'll come to
a specific example where they call a checking
account.
They don't call it a checking account.
Even where I come from, I'm from Kenya,
(08:57):
we call it a current account.
Just that alone is already a huge difference.
Or the financial system is so different, they
don't trust the system.
And so they're coming in here with the
same mindset, and so you have to start
by educating them to understand this is a
different system.
(09:18):
So some of the clients that I work
with, thinking I recently concluded an engagement with
somebody from Mexico, very different system, even though
we're sort of close to each other.
Whatever products they have, and we probably can
talk about that.
Some of them are not suitable, and I'll
explain what I mean for somebody who's a
(09:39):
tax resident here.
So pretty much almost all my clients, and
not everybody is an immigrant, but all the
ones that are coming from different countries, we're
dealing with a lot of those issues, just
the language, me doing a lot of education
around what things are called over there, and
what it means here, and how do we
(09:59):
bridge the two.
What about when it comes to retirement accounts?
Because if you put money in an IRA
here, or a Roth, I'm dealing with that
right now.
What I've said to other advisors, all these
things we have in the U.S. are
really designed to work in the U.S.,
within the U.S. tax code.
(10:20):
And if you think of it that way,
it makes life a lot easier when we
start moving outside.
So that's the first thing.
So you got HSAs, you got RO1Ks, you
got Roth accounts.
All those accounts are meant for people who
are going to retire in the U.S.
So that's the first thing.
I actually did a kids' article on this.
(10:41):
Okay, now, you're here, let's say, on H
-1B visa.
These visas are not meant to be permanent.
You could switch to a green card for
it to become permanent.
So technically, like the H-1B visa, let's
say, after six years, you need to leave.
These six years you're here, you really want
to be saving, obviously, because it's probably some
(11:02):
of your best earning years.
And so from there, you then leave.
And what I've seen is you take all
the things you had in the U.S.
and you take them out and kind of
expect that your home country tax code is
going to treat them the same way.
It doesn't.
So here's the crux of the matter.
(11:24):
The U.S. taxes you on worldwide income.
Once you become a U.S. tax resident,
it doesn't matter what you have elsewhere.
You could have things in your country, on
the moon, some planet.
The U.S. wants to tax you on
that, and they will tax you on that.
(11:45):
So that's a first.
Sounds right.
Yeah.
They really want to know what's happening out
there.
And I said to people, don't try to
hide, because in 2010, they signed this through
the FATCA, which kind of forces other countries'
banks to sort of report back on you
or to report to the U.S. what
(12:07):
assets they have that belong to U.S.
tax residents.
So that's the first thing.
OK, now you're here.
You know you're reporting on everything.
You now leave, let's say, for example, which
is a case I'm dealing with.
You go back to India.
India looks at your situation and says, great,
we're so happy to have you back.
What overseas assets do you have?
(12:29):
And, oh, you've got a Roth account.
We don't know what a Roth account is.
As far as we're concerned, this is just
a taxable account.
And so we're going to start taxing you
on that.
So there's a huge mismatch at that point,
because you were saving, thinking this thing will
be tax free, and the U.S. is
looking at it as being tax free, so
(12:51):
we don't need to track bases and all
that stuff.
And India says, uh-uh, we need to
tax you on that.
So that's the first thing I'll always say.
We need to think about the accounts you're
saving me and where you're going to be
when you use these accounts.
Now, when it comes to specifically, let's say,
IRAs and 401ks, there is tax treaties.
(13:14):
Hopefully, it's about maybe 70-something odd tax
treaties between the countries that at least would
say, OK, this is a pension in the
U.S. OK, you people in India, for
example, you can treat it as a pension
as well.
At least a few of them will recognize
retirement accounts.
But when you finance out the money, there's
(13:35):
still the tax implications.
Now, if there's a tax treaty between the
two countries, again, let's use India as an
example, your 401k, the U.S., of course,
wants to tax that because it's a 401k.
If you've left, they'll tax you at like
30%.
It doesn't matter what technically your tax rate
would have been.
If there's a tax treaty, then that gets
(13:57):
modified to something like 15%.
But you're still paying taxes, but hopefully not
as much as it would have been without
the tax treaty.
So it's important that we know where you're
going to be moving to or you're likely
to be moving to before we talk about
what to invest in.
If you leave this country and you no
longer have a U.S. mailing address, don't
(14:19):
most broker-dealers not want to service your
account anymore because you're out of the U
.S.? Yes, it's true.
Because of FATCA, once again, a lot of
custodians, you're right, don't want to deal with
people that have put a foreign address on
the account.
And you really should put a foreign address
on it because you're no longer a tax
(14:40):
resident.
So these two types of people, those that
were here on temporary visas, you're now considered
an NRI, non-resident Indian, or a U
.S. expert that's moved overseas.
So what you need to do is before
you leave, find a brokerage that allows you
to put a foreign address on your account
and most likely move your money to that
(15:03):
firm.
That's what it comes down to.
So have you found that people coming from
other countries, they have a different view on
what assets they want to invest in, their
risk tolerance is different, or are they less
interested in investing in their more physical assets?
What have you seen?
It's a little bit of a mixed bag.
If I think of myself that moved 3
(15:25):
,000 miles to a brand new country, we're
most likely going to have a higher risk
tolerance if you think of how we define
it here, right?
And so I find a lot of the
people that come on some of those temporary
visas, their risk appetite tends to be a
little bit high.
And I know this is a generalization.
(15:46):
And they're also very interested in, a lot
of them will be trying to pursue FIRE,
the FIRE movement.
So they'll talk a lot about other assets.
Real estate seems to be a big one,
like passive income.
And for whatever reason, a lot of people
think passive income, they think real estate.
And then depending on where they're coming from,
(16:09):
there's also a huge appetite to invest home,
whenever home is.
So if I'm thinking, again, let's use India
as an example.
If you came here on the H-1B
visa, and let's say you really want to
get the green card, your company can apply
for that green card for you.
But right now, it's going to take you
(16:29):
20, 30 years if you're lucky to get
that green card.
So a lot of people will look and
say, you know what, I'm not going to
wait.
So I'm just going to do as much
as I can here, invest home, and off
we go.
So I've seen, I'd say the risk tolerance
tends to be a lot higher.
They really want to explore other options.
But of course, you still have to think
(16:49):
about the visa status before you get into
this.
So there's also a lot of education around,
you need to be thinking about these things
if you're not going to be here the
next 5, 10 years.
And then when they go home, and again,
I'm using home as your home coming from,
it's, I think a lot of rental property.
They also want to invest in their stock
markets back home.
(17:10):
And that's where we really have to have
a conversation.
I'm like, as a US advisor, I can't
really advise you on what to invest over
there.
But I do want to caution you that
there's some things you may not want to
invest in just because of the tax implications.
Because as long as you're in the US,
(17:31):
we're very interested, and we want to know
everything about what you're doing with your money
outside.
I had never thought about the fact that
people who come over here are already higher
risk, because they took the risk to come.
So they're sort of self-selecting.
That's such a good point that I had
never really put two and two together, but
it makes perfect sense.
(17:52):
Yeah, you're willing to leave everything.
It's like, what's the worst that can happen?
When somebody comes over, like our first conversation,
I now bring it up, whether they're going
to become a client or not.
And I'll ask, do you have assets invested
overseas?
And if they do, I'm like, I really
would just like for us to talk about
it.
Because what happens is once you become a
(18:14):
US tax resident, and you're supposed to report
everything overseas, if you have, let's say, there's
something called the FBA.
If you have accounts more than 10K, just
one day, it's 10K plus, you need to
report that.
There's no tax implications, but you need to
report it.
If you're invested in, let's say, mutual funds,
(18:37):
stocks, anything else, you need to report that
on a different form, and that's actually taxed.
And then if you're invested in foreign registered
mutual funds, which are the worst, they fall
into something called APIFIG, which stands for Passive
Foreign Investment Company.
In the US, taxes that so, so badly,
(19:01):
that's the only way to put it.
You could end up paying up to like
50% of when you get into that
account, whether it's recognized or not.
And so what we'll say to people is,
I just want to make sure I educate
you on this.
If you have this kind of assets, you
may have to sell them or just deal
with having to file taxes on these things,
which is not fun.
(19:21):
IRS says it takes 25 hours to do
what's called an 8621 form for one of
these mutual funds.
So just want to let you know, this
is what it is.
We can find a cross-border planner that
will help.
But I also know they're probably not very
keen because you need to charge them appropriately
for that kind of money.
(19:42):
So that's something I caution people about.
We definitely want to look at what you
have.
And if you haven't been filing, if you're
talking to me after you've been here for
a while, IRS has actually created what are
called streamlined filing process, because I think they
know people don't know that allow you to
(20:02):
come into compliance with some of these things.
So that's always a good one to bring
to people's attention.
That's a really good point.
Can you talk a little bit about your
podcast, The International Money Café?
Sure.
So The International Money Café podcast, I do
it with, she's become a really good friend
now, my cross-border tax professional.
Her name is Manasa.
(20:23):
And the way the podcast started was we
used to meet every Friday and just talk
about these things, you know, these cross-border
ideas, cases, and things like that.
And one time you were like, why don't
we just record this stuff?
And so we started recording it.
So it really is a coffee chat.
And so within the podcast, we'll talk about,
(20:45):
you know, finances, obviously taxes, all looked at
through your immigration lenses.
And then we're both immigrants.
So we hear, and actually we've both become
citizens.
So we'll also talk about our lived experiences,
what it means to move to the US,
to another country, and what are some of
the things that we So it's a fun
(21:06):
podcast, but we also address very serious issues.
Like I said, all the tax things that
you can think about, and just life in
the US.
And from what we've been told, it's a
good resource, not only for our end consumers,
which is who we were thinking about, but
also other planners who are interested in the
subject.
(21:27):
It's a fun one.
Everybody should check it out, vimcafe.com.
I have one question that I was thinking
about.
Right now, we have a lot of policy
changes going on in our government.
Are you seeing that trickle down, that uncertainty
around these policies?
Is that trickling down to your clients?
Is it something that's more set in law,
(21:48):
and you feel like it's going to be
a gradual change?
How are you viewing the changes?
It's very stressful, because things are changing.
People panic.
I actually had somebody reach out from me
back home saying, are you okay?
Do you have to leave?
So you can see the miscommunication that happened
even to the people outside.
So the people here, because nothing was clarified
(22:09):
at that point, another part of that announcement
also indicated when you come into the country,
would need to see this stamp to show
that you've actually paid the fee.
And so it wasn't explained this impact.
People who were on their way out, literally
on H-1B visas, turned around to come
(22:31):
back to the country.
People who were like in India, literally cut
short their trips to come back.
So that's a kind of anxiety that we're
talking about.
So with all this going out, people are
afraid.
I spoke to somebody the other day, and
it was so sad, because I know they're
(22:53):
here on the H-1B visa, and they
said to me, Jen, I'm afraid to leave
the house.
It would be nice if this was communicated
nicely.
And I know immigration lawyers are doing all
they can to kind of, like that Saturday,
I think I was on LinkedIn a lot,
and it was like every 30 minutes, oh,
here's a new update.
Here's a new update.
Oh, it doesn't affect everybody.
(23:13):
Okay.
It affects only these people.
But then when you come into the country,
you don't know who you're going to find
at the airport, you know, immigration check.
So there's a lot of anxiety for sure.
And that does not bode well for people's
livelihoods and their psychology.
So what I'm also seeing a lot of
(23:35):
is people saying, we're not sure about this.
I think we're just going to plan to
leave.
And so we've had a lot of those
conversations with Manasa, and what we ended up
doing, actually, we created a checklist for anybody
who's on a work visa that's thinking, I
need to go, because we can't talk to
(23:55):
everybody.
So they go to the IM Cafe store,
we have a 52-page checklist to help
them plan their departure.
Some of, like what you were talking about,
addresses, accounts, what do I do with my
house, what do I do with whatever the
case may be?
So I'm definitely seeing a lot of that.
(24:18):
I have one question, the same question I
ask everybody.
What is the one thing you think financial
planners should know, but don't?
I'm going to talk about, again, cross-border
planning.
And this was reinforced at the XYPN live
conference.
When you have a cross-border client, or
a client that has roots in other countries,
it's not planning as usual.
(24:39):
There's so much more you need to consider,
not only their cultural background, which I think
is huge, but also the technical aspect.
So the countries, their immigration status, where they
want to be when they retire, because that's
always completely different.
And of course, their whole situation.
So the best thing I say is, find
(24:59):
another cross-border planner, have a quick chat
with them, and hopefully they'll be able to
guide you in the right direction.
But I think if you do that, you
have a shot at getting this thing right
for the client.
Well, thank you so much.
That's an excellent answer.
If people want to find you, they can
find you on LinkedIn, and at your website,
which is...
(25:20):
algonfa.com.
So algonfa.com, or LinkedIn, or they can
also find our podcast on theimcafe.com.
And we will provide links to both of
those in the show notes, as well as
a link to that article, the Kitsitz article
that you mentioned.
I think that'd be interesting to share.
Jane, thank you so much for being here.
(25:42):
Thank you, Belle.
This was lovely.
All information in the Smarter Planner podcast is
for educational and informational purposes only.
Belle Osvath and the FPA NCA do not
endorse or recommend any of the people, products,
or services featured or discussed on this podcast.
And now it's time for your FPA NCA
news and events update.
(26:02):
Tuesday, October 14th, from noon until one, there's
a webinar about navigating family dynamics in senior
living decisions.
It will feature Ginger Noyce and Christy Kennedy,
founders of Silver Bridges Consulting.
And volunteers are needed for Wednesday, October 22nd,
from 1230 to three o'clock, the FPA
NCA GMU pro bono event at George Mason
(26:25):
University in Fairfax, Virginia.
This event has cashflow planning for wealth management
students at GMU, along with one-on-one
coaching sessions.
Volunteers arrive at 1230, one o'clock and
one-thirty, a presentation at one-thirty and
three o'clock with networking and one-on
-one coaching.
To find out more about these events and
to register, find us online at fpanca.org.
(26:48):
Thanks for listening.
And until next time, stay smart.
What key do you use when opening a
banana?
Kingdom?
Banana key?
I don't know.
(27:09):
A muggy.
That's better than it's good.
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My Favorite Murder with Karen Kilgariff and Georgia Hardstark
My Favorite Murder is a true crime comedy podcast hosted by Karen Kilgariff and Georgia Hardstark. Each week, Karen and Georgia share compelling true crimes and hometown stories from friends and listeners. Since MFM launched in January of 2016, Karen and Georgia have shared their lifelong interest in true crime and have covered stories of infamous serial killers like the Night Stalker, mysterious cold cases, captivating cults, incredible survivor stories and important events from history like the Tulsa race massacre of 1921. My Favorite Murder is part of the Exactly Right podcast network that provides a platform for bold, creative voices to bring to life provocative, entertaining and relatable stories for audiences everywhere. The Exactly Right roster of podcasts covers a variety of topics including historic true crime, comedic interviews and news, science, pop culture and more. Podcasts on the network include Buried Bones with Kate Winkler Dawson and Paul Holes, That's Messed Up: An SVU Podcast, This Podcast Will Kill You, Bananas and more.