The Complicated Financial Life of a US to NZ Expat

Posted on 22-September-24 by Grumpus

I recently gathered the information needed to file my New Zealand taxes. This was a multi-week task that required downloading documents from family financial accounts spanning three different continents. It was as exciting as it sounds, and if it were the only tax experience I had to endure each year, it would be bearable. However, as an expatriate (expat) US citizen, I must also file US taxes annually because the US is one of a handful of countries that taxes its citizens no matter where they live. An additional complication is that the New Zealand and US tax years do not match up. Hence, the information I gather for one regime is not complete for the other. All of this leads me to the conclusion that as an expat US military retiree family, we lead a complicated financial life.

Suppose you’re considering becoming an expat, expat retiree, or expat military retiree (like me). In that case, your financial life need not be as complicated as mine. Don’t get me wrong, if you want to be an expat, you are accepting a significant amount of financial friction in your life. However, I’ve logged below several engaging lessons learned from my complicated financial life that should help you navigate that process more efficiently. Those lessons include the importance of paying for expert tax advice, as well as finding a money tracking program that can access all your accounts in their various currencies. There are several more, all of which are worth considering before making that move. Continue reading →

FIRE in New Zealand: One Thing a Pension Cannot Buy

Posted on 09-January-23 by Grumpus

Here’s an imaginary conversation that’s been playing in my head recently:

- - Almost non-existent long-term reader: “Hey Grumpus, I noticed you haven’t posted any new articles in a while. Is everything OK?”
  - Grumpus: “Thanks for asking, but unfortunately, no, everything is not OK. I’ve been mourning a personal loss.”
  - Almost non-existent long-term reader: “Oh…I’m sorry for your loss. Who are you mourning?”
  - Grumpus:“Not who but what.”
  - Almost non-existent long-term reader: “OK … That’s strange … What are you mourning?”
  - Grumpus:“I’m mourning the death of my defined benefit pension-enabled Financial Independence Retire Early (FIRE) in New Zealand lifestyle. It died in October 2022, when I returned to full-time work.”
  - Almost non-existent long-term reader: “Oh, I’m sorry to hear that! However, I’m afraid I must report you to the Internet Retirement Police (IRP) that Mr. Money Mustache talks about.”
  - Grumpus: “I understand. I’m now a FIRE imposter. Tell the IRP that I’ll go willingly.”

(Moments later, as the IRP is dragging a defeated Grumpus into the police van)

- - Grumpus: “My first attempt at a FIRE in New Zealand lifestyle is dead. LONG LIVE MY SECOND FIRE IN NEW ZEALAND LIFESTYLE!”

The End of a Short Era

You read that imaginary conversation correctly. My defined benefit pension-enabled FIRE in New Zealand lifestyle only lasted 1 year, 4 months, & 23 days. By FIRE in New Zealand lifestyle, I mean the time I spent in retirement with no GI Bill-sponsored or other full-time work-related income. During that time, my family and I lived in New Zealand, relying solely on the income from my Department of Defense and Veteran’s Administration (VA) pensions. I must admit, with a small amount of pride, we did an excellent job of staying under those spending limits.

Why, then, did I return to full-time work? I did it because a defined benefit (DB) pension cannot buy a New Zealand residence-class visa. And without a resident visa, an immigrant family like mine cannot FIRE in New Zealand. That’s not to say that money can’t buy residence in New Zealand because it most certainly can through an investor visa. However, in the post-pandemic New Zealand immigration system, that potential visa pathway was moved beyond my family’s ability to achieve. As a result, even though I’m guaranteed to earn the same inflation-protected amount of money each month until the day that I die, it wasn’t enough. I found myself at the uncomfortable crossroads of a return-to-work decision around September 2022. Continue reading →

18 Months of Kiwiarbitrage

Posted on 13-August-21 by Grumpus

In my original Kiwiarbitrage article, I explained how I determined that my family and I could afford to “retire” to New Zealand (NZ). I also stated that I would write many more articles on New Zealand and geoarbitrage. Since then, I’ve written precisely none … until now!

This article starts with general lessons that any expatriate (EXPAT) pensioner should know before moving, some of which I didn’t. Secondly, since several readers contacted me over the past few months and asked what the cost of living in New Zealand is like, I discuss that below. The article is organized so people can read the sections they’re interested in and skip the rest. I also try not to concentrate too much on COVID-19 pandemic-specific lessons but rather lessons that apply to all environments.

Finally, this article is anything but definitive. There will be others. For instance, I want to write one for EXPAT US military retirees and veterans. However, I limited this article to just the general lessons I’ve learned from retiring overseas and cost of living insights for the sake of time. Continue reading →