Thorny new issue on the radar for U.S. expats regarding IRA accounts

[Jingthing]

OK, this one just might be my personal undoing living abroad.

The major IRA firms (Fidelity, Vanguard) etc. are not only not welcoming new expat business for IRA accounts under 500K USD, they are kicking out long time existing customers.

So you (I) might be forced to close accounts / "roll over" ... to what firm exactly?

For traditional IRAs the TAX (and early withdrawal penalty) hit from selling out an entire large account could be ruinous.

I don't even know an established reliable firm that WOULD welcome such expat accounts. Yes I mention an odd firm here, but I've never heard of them and they sound like goldbugs .. SCARY!

I know what you're thinking ... if you've got a U.S. address on record, no problema, well think again ... maybe still a problema.

From the login screen at Fidelity:

You are visiting Fidelity.com from outside of the United States and you must accept the International Usage Agreement before you can proceed.

This web site is intended to be made available only to individuals in the United States. Nothing on this site shall be considered a solicitation to buy or an offer to sell a security, or any other product or service, to any person in any jurisdiction where such offer, solicitation, purchase or sale would be unlawful under the laws of such jurisdiction and none of the securities, products or services described herein have been authorized to be solicited, offered, purchased or sold outside of the United States of America. By using this site, you consent to the use of cookies which collect information about site visitors. To continue to this site, you must acknowledge that you understand and agree to these terms of use by clicking "I Accept" below.

Note it doesn't speak about a U.S. address. This text is implying they just won't deal with you if you don't LIVE in the U.S. It sounds like even with a U.S. address if you're living abroad, you're not even supposed to sell portions of existing investments, as retirees generally do annually.

More evidence this is real and possibly very serious for a lot of people:

http://www.certifiedgoldexchange.com/vanguard-ira-services-expats-not-welcome/

Vanguard IRA Services has evidently closed the door on American expatriates with retirement accounts valued at less than $500,000, according to a recent International Advisor article. Vanguard, along with eight other IRA custodians, including Scottrade, Fidelity, T.D. Ameritrade, Morgan Stanley and Merrill Lynch, is no longer accepting applications for self-directed IRA plans when the IRA owner is an expat (a U.S. citizen living abroad) and when the account in question is valued at $500,000 or less.

It is unclear whether Vanguard is forcing current expat IRA clients to move elsewhere, as are some of the aforementioned custodians, or whether Vanguard is only denying expats incoming or new IRAs. What’s certain is that U.S. expats the world over are scrambling to find an IRA custodian that is willing to manage expat retirement accounts.

And more:

http://www.international-adviser.com/news/tax---regulation/us-institutions-to-expats-take-your-retirement

First American expatriates were told that their bank accounts weren’t welcome, either in the US or in their new countries of residence, because of the growing hassles and expense banks have to deal with when they have American citizens as clients.

Now, it is emerging, Americans’ tax-deferred retirement accounts – many of which were set up decades ago, and never touched since – are also increasingly unwanted by US financial institutions, unless these accounts are of significant size.

So anyway ... HELP PLEASE ... what's an expat to do?

Have you encountered this issue personally yet?

In other words a long term IRA customer discovered to be logging in from abroad ... and then contacted to close your account?

Again, rollover to where?

Any other ideas on how to cope with this?

Yes there is VPN. Legal to use in such a way to show U.S. login or not? I really want to know. In a case where you do have a U.S. address on record, isn't that a stronger case for not being forced to close? But then there is the issue of logging in from outside the U.S. and forced to sign agreements about non-service for people outside the U.S.?

Edited May 20, 2014 by Jingthing

[KittenKong]

"You are visiting Fidelity.com from outside of the United States and you must accept the International Usage Agreement before you can proceed.

This web site is intended to be made available only to individuals in the United States. Nothing on this site shall be considered a solicitation to buy or an offer to sell a security, or any other product or service, to any person in any jurisdiction where such offer, solicitation, purchase or sale would be unlawful under the laws of such jurisdiction and none of the securities, products or services described herein have been authorized to be solicited, offered, purchased or sold outside of the United States of America. By using this site, you consent to the use of cookies which collect information about site visitors. To continue to this site, you must acknowledge that you understand and agree to these terms of use by clicking "I Accept" below."

Standard access disclaimer used by thousands of companies all over the world, notably those in the UK (where "United States" is replaced by "UK", of course). It's all to do with companies covering themselves against being accused of trying to sell products in other territories where they may not be authorised or legal. Nothing new here at all.

[TallGuyJohninBKK]

The disclaimer may be "nothing new", because there are legal differences in what kinds of securities can be sold/traded to people inside the U.S. vs. outside the U.S.

But the issue of some U.S. brokerages apparently wanting to avoid retirement accounts held by expats is a new/more recent wrinkle.

For a variety of reasons, I think the best course is to maintain a U.S. mailing address used for all one's banking/brokerage accounts, and pick and use the same location VPN server to match it for all log-ins to those accounts. So in other words, if your mailing address is Los Angeles, choose and use a VPN service with a server in Los Angeles. And use it for ALL log-ins without exception.

That also will help avoid a related issue of getting temporarily locked out of your brokerage account because the inhouse security systems for your U.S. account suddenly see a log-in IP address coming from Thailand, and bingo, the brokerage security system suspects fraud. And you'll likely be forced to go thru answering a series of credit report-type questions to verify your identity before they'll be willing to unlock your account.

Their systems look for out-of-the-ordinary log-in activity and flag those. So, I guess, an alternative would be to ONLY do log-ins from a Thailand IP. But for reasons such as the issues/problems Jing raised in the subject OP, I think that's asking for trouble, now or at some point in the future.

Also, FWIW, in some of those same kinds of article about some brokerage houses having problems with expat IRA accounts, I saw representatives from Schwab being quoted as saying they had no problem continuing to provide accounts and service to expats. And of course, Schwab is already probably the best regular banking/ATM card option for expats as well.

[Pib]

Just last month I rolled over/moved my Beneficiary IRA (only around $15K) from a U.S. bank to a "new" Beneficiary IRA account with Franklin-Templeton Investments/Mutual Funds. On the forms I mailed to Franklin-Templeton to accomplish the transfer I only used my Thailand military APO address. Took about 3 weeks for my bank and F-T to complete the transfer which as mentioned was the establishment of a new IRA with F-T. No problems....my Beneficiary IRA is now with F-T.

Those disclaimers in the OP seem standard issue/been around for a while when they detect you are connecting from a foreign IP address or sometimes even when connecting from within the U.S....guess they just want to make sure you understand some of their products/services only apply to U.S. residents....then you get into the debate of exactly what is a U.S. resident in the eyes of the company.

Edited May 21, 2014 by Pib

[CaptHaddock]

The possibility of having our investment and/or retirement accounts closed back in the States is a real threat, although not yet. I previously received Fidelity's warning and so now use a vpn. Having worked in the financial sector in the US before retiring I recognize the motivation behind Fidelity's warning as an attempt to show that they are not soliciting business abroad and therefore, not subject to regulation in those jurisdictions. If they ever were to have to bear the cost of meeting the regulations in foreign countries like Thailand, they would dump our accounts in the blink of an eye. That hasn't happened so far and may not in the future. However, there is always the risk of tightening of Patriot Act-type or anti-tax evasion restrictions that catch us the net and make our current arrangements untenable. There is no guarantee that the regulations of Thailand and the US will be harmonized sufficiently to enable us to continue to live here. That applies to income tax considerations, but also to banking and investments. We are not a priority for Thailand, because we are not important to the Thai economy. It's a little different for expats working in a multi-national that is indeed providing some essential service to Thailand. We may continue to be able to get by by being lumped with them, but not necessarily. We are not important to the US because expats do not represent a single voting constituency.

In the meantime, it becomes more important to resemble an everyday customer as much as possible. To that end it behooves us to use a US mailing address, a US telephone number accessible here, and a vpn. Also, the more different accounts we set up before expatting the better our chances to avoid being shut down. That's the best we can do. We can fall through the cracks because we decided to place ourselves between those very cracks.

[thailiketoo]

Some institutions say they are not showing overseas clients with US retirement accounts to the door. “We have not asked any of our non-US clients to close accounts,” a spokesperson for Charles Schwab told International Adviser.

“We continue to open accounts for non-US residents who want to open IRAs with us, and comply with related IRS reporting requirements.”

http://www.international-adviser.com/news/tax---regulation/us-institutions-to-expats-take-your-retirement

[TallGuyJohninBKK]

I agree with the Captain's advice above...

Meanwhile, the BKK-based Creveling and Creveling financial advisors had a blog entry on this same subject about a year ago that helps explain why this problem is occurring:

Can't Invest Overseas, Can't Invest at Home Either

If that weren't enough, U.S. expat investors increasingly are also prevented from purchasing many U.S.-based investment products. Under pressure from compliance departments to conform with various aspects of the Patriot Act, anti-money-laundering legislation, and securities rules that prevent cross-border marketing of U.S.-registered mutual funds, U.S.-based brokers have been making a distinction between resident Americans and non-resident Americans. Overseas Americans face difficulty in opening new accounts, and those with existing accounts are being shut out from buying the U.S.-domiciled mutual funds that resident Americans can purchase. In the worst cases, U.S.-based investment custodians/brokerages are deciding to force their U.S. clients with overseas addresses to close their accounts.

http://www.crevelingandcreveling.com/blog-list/165-american-expats-investing-without-a-private-banker.html

Obviously, the answer for Americans in particular is to NOT be an expat for purposes of banking / brokerages / investing.

Edited May 21, 2014 by TallGuyJohninBKK

[partington]

I too have been fearing this development for a long time now.

For me it has the extra wrinkle that I am not and have never been a US citizen, simply worked there for more than a dozen years, though always intending this would be temporary.

However the highest earning phase of my career occurred there, and my company's 401k scheme was very good, since they made matching contributions if you joined the scheme, (that is free money!) and everyone advised me that the tax benefits for contributing were too good to ignore.

Even so, I worried about the fact that I always intended to return to the UK, and how this would affect the accessibility and safety of the money. Of course Fidelity assured me there would be no problem at the time, and told me this again when I rolled this money over to a personal IRA just before I left. Of course their assurances were worthless.

Now and for the last five years they have had the UK as my home address - I have no green card and no right to live in the US , so there is no possibility that I can fool them into believing that I live there.

If they close my account not only will I get the 10% tax penalty for early withdrawal, but will also get the 30% flat tax they impose on lump sum withdrawals to foreign addresses, so I will lose 40% of the money at a stroke. This could make a huge difference to my retirement (it's a very significant amount, though short of the $500k that apparently protects you from closure), and I simply have no course of action other than to hope it doesn't occur.

Obviously if I had been able to foresee this I would just have saved the money in a bank account and taken it with me. A retirement account that you cannot use to retire abroad seems baffling to me as a European...

[Jingthing]

U.S.people who say this isn't an issue for a lot of people are in denial. This isn't about the U.K. which is an extremely expat friendly country (because of how COMMON it is there). The U.S.A. is pretty much the opposite and recently getting worse.

That Fidelity screen I just saw for the first time. I don't know how long it was up as I hadn't logged in for a long time. I take it and some of the info in the links I posted as evidence this is becoming a bigger issue.

Obviously it won't hit everyone, but it is already hitting some people.

As far as a U.S. person with a foreign military address, that's rather a different thing than for a civilian.

There are some good clues here so far as other firms to look at. Probably Vanguard and Fidelity are the top firms and they might be issue firms for some.

The fact that it is news that some places aren't showing customers to the door is more strong evidence some firms ARE and this might be on the rise (see the links).

Rolling over an IRA isn't exactly a bucket of fun ... but if that's possible that's certainly better than being forced to sell all of an account in one year, even worse if you're under age 59 1/2.

If this doesn't concern you personally, good for you, but don't assume because of that it isn't a difficult issue for a significant percentage of U.S. expats. Also, it could hit you later so it's a potential problem worth being aware of and perhaps taking steps to prevent problems later.

I also agree it makes sense to use a U.S. address and U.S. telephone number. HOWEVER, the VPN login concerns me. Wouldn't major firms be savvy to which IP addresses VPN providers use? Is it always the same IP address when using a VPN or do they float? If your address of record is in Florida and you're always logging into an account from Nebraska (with a VPN IP that might be identifiable as such anyway) aren't you kind of in red flag situation?

So far for my many ties to the U.S. financial system, I have followed this tactic of presenting myself as NOT an expat. It feels a little sleazy but in some ways I feel it's not worth the risk to do differently. But until now the login from outside the U.S. has not been an issue to me. But it seems it may become more of an issue.

Also an aspect of this perhaps not mentioned often enough, IF you are playing the faux U.S. person, you are likely burdening someone in the U.S. to help you out with that. Generally a mailing service doesn't cut it for financial institutions. So you're kind of VULNERABLE aren't you ... to changes in the situation to the people helping you out back in the U.S. Is that really a good long term, lifetime solution? Perhaps, depending on your luck and how long your lifetime is, but I hope you get my point. This situation is far from ideal.

This might be stirring it up a bit much, but I want to say this here as it relates. If a person in the U.S. asked me now should they retire abroad at this point based on my experience I would say, probably not ... and a large reason will be the complications they can expect with their financial ties back in the U.S.

Edited May 21, 2014 by Jingthing

[CaptHaddock]

U.S.people who say this isn't an issue for a lot of people are in denial. This isn't about the U.K. which is an extremely expat friendly country (because of how COMMON it is there). The U.S.A. is pretty much the opposite and recently getting worse.

That Fidelity screen I just saw for the first time. I don't know how long it was up as I hadn't logged in for a long time. I take it and some of the info in the links I posted as evidence this is becoming a bigger issue.

Obviously it won't hit everyone, but it is already hitting some people.

As far a U.S. person with a foreign military address, that's rather a different thing than for a civilian.

There are some good clues here so far as other firms to look at. Probably Vanguard and Fidelity are the top firms and they might be issue firms for some.

The fact that it is news that some places aren't showing customers to the door is more strong evidence some firms ARE and this might be on the rise (see the links).

Rolling over an IRA isn't exactly a bucket of fun ... but if that's possible that's certainly better than being forced to sell all of an account in one year, even worse if you're under age 59 1/2.

If this doesn't concern you personally, good for you, but don't assume because of that it isn't a difficult issue for a significant percentage of U.S. expats. Also, it could hit you later so it's a potential problem worth being aware of and perhaps taking steps to prevent problems later.

I also agree it makes sense to use a U.S. address and U.S. telephone number. HOWEVER, the VPN login concerns me. Wouldn't major firms be savvy to which IP addresses VPN providers use? Is it always the same IP address when using a VPN or do they float? If your address of record is in Florida and you're always logging into an account from Nebraska (with a VPN IP that might be identifiable as such anyway) aren't you kind of in red flag situation?

So far for my many ties to the U.S. financial system, I have followed this tactic of presenting myself as NOT an expat. It feels a little sleazy but in some ways I feel it's not worth the risk to do differently. But until now the login from outside the U.S. has not been an issue to me. But it seems it may become more of an issue.

Also an aspect of this perhaps not mentioned often enough, IF you are playing the faux U.S. person, you are likely burdening someone in the U.S. to help you out with that. Generally a mailing service doesn't cut it for financial institutions. So you're kind of VULNERABLE aren't you ... to changes in the situation to the people helping you out back in the U.S. Is that really a good long term, lifetime solution? Perhaps, depending on your luck and how long your lifetime is, but I hope you get my point. This situation is far from ideal.

This might be stirring it up a bit much, but I want to say this here as it relates. If a person in the U.S. asked me now should they retire abroad at this point based on my experience I would say, probably not ... and a large reason will be the complications they can expect with their financial ties back in the U.S.

The ip addresses used by vpn services are part of pools of addresses assigned to those companies and readily identifiable as such by anyone interested. For a while I used a virtual machine in Amazon's cloud as my vpn, but that was identified by one website on the basis of which they refused me service. In general, if the brokerages decide to investigate us seriously we cannot fool them. The fact that they haven't used the tools available to them to sort us out from those genuinely resident in the US is actually encouraging. It means that, other than a pro forma effort to ward off regulation by foreign jurisdictions, they just aren't interested. They don't have a reason to be interested yet and as long as that remains true, we are likely to be okay.

While I understand the frustration I wouldn't advise anyone not to expat just because of the risks we are discussing. The fact of the matter is, at least for the time being, the tools available to us make it easier than ever to maintain our presence in the US as necessary. Just the other day I deposited my first check by desktop scan to a US bank. Couldn't do that a few years ago. Not a major issue since I seldom receive checks, but it does solve one pesky little problem nicely. So far, the benefits of expatting outweigh the inconveniences, although seeing a coup d'etat go down close is pretty depressing.

By the way, I don't think the UK is all that friendly to their expats. They receive their National Insurance benefits, but are denied the cost-of-living-adjustments forever. That's a slow, cruel squeeze to death for no good reason. Fortunately, the SSA is a far better organization.

Edited May 21, 2014 by CaptHaddock

[Jingthing]

I agree, that wouldn't be the only reason not to expatriate. However, I think most potential expats minimize the U.S. presence issues and the hassles they are setting themselves up for. It definitely belongs on the con list in a pro and con decision process. I agree there are better tools now than ever ... especially for U.S. telephone presence.

OK, sorry, probably the focus here should be IRA accounts ...

[JimMagee]

Roll over to Charles Schwab. Then open a checking account with them. They are very international friendly, their ATM card works all over the world, AND they reimburse any ATM charges.

They have great investment plans for your IRA, I've been with them for many years and have had minor problems which were easily solved over the phone using their 24/7 phone service. They also have a toll free number from Thailand.

[Jingthing]

I will look into Schwab. I actually don't want to roll over, really a hassle, so I won't do unless forced, so I will continue to act the non-expat, but they are definitely a legit firm.

[TallGuyJohninBKK]

I also agree it makes sense to use a U.S. address and U.S. telephone number. HOWEVER, the VPN login concerns me. Wouldn't major firms be savvy to which IP addresses VPN providers use? Is it always the same IP address when using a VPN or do they float? If your address of record is in Florida and you're always logging into an account from Nebraska (with a VPN IP that might be identifiable as such anyway) aren't you kind of in red flag situation?

Jing, I've never had any issues with using a VPN. But have had when NOT using one.

As I mentioned above, my recommendation is, if possible, to use a VPN service that has servers located in or near where one's residence address is, just for consistency and uniformity. In reality, I think using an IP anywhere in the U.S., as opposed to international, ought to be OK. But these days, most good sized VPN services have server locations available in many major city areas across the U.S. So finding a "local" VPN server for your residence address usually isn't a problem.

As for VPN IP addresses, yes, they operate in ranges, and typically will change slightly with different log-ins. That's called dynamic IP as opposed to static IP addressing. But I don't believe that's terribly different than what you'd get if you were using a U.S. cable or DSL provider, where the default accounts usually are Dynamic IP ones. At any rate, I don't believe any of the financial firms discriminate against (or flag in any way) any of their customers just for using a VPN for log-ins.

BTW, re one of the issues being raised above, the bad situation where a customer is being forced to close their U.S. retirement account at a particular brokerage is not necessarily the same thing as being forced to liquidate/withdraw the funds and incur penalties, taxes, etc. Provided, of course, that the accountholder can find a different brokerage willing to accept the rollover. Right now, especially if someone is not promoting any foreign status, I think finding a rollover at a different firm ought to be generally achievable.

Edited May 21, 2014 by TallGuyJohninBKK

[Jingthing]

Thanks for the guidance comrades. I won't panic yet.

[Jingthing]

Here is another method. You need good cooperation from a U.S. person, best at your "U.S." address specifically:

1. Install Teamviewer on both computers (Thailand and the U.S.) It's free. They give you the teamviewer ID number for their computer.

2. Login to IRA account via Teamviewer. You are actually in control of the U.S. computer.

3. Password needed for each session from host.

But it's slow.

Brave new faux world.

Cool, huh?

Edited May 21, 2014 by Jingthing

[TallGuyJohninBKK]

I think it's a good topic and an important issue for expats, and well-deserving of airing and attention. Hopefully things won't get any more difficult over time.

I have an IRA that I'm looking to move in the near future for issues unrelated to this discussion. But the issues in this discussion are factoring into my deliberations about which brokerage firm to look to move my IRA to.

[Suradit69]

I use Vanguard and have for years. I use a US mailing address, although nothing is ever mailed to that address and I use my Thai phone number. They used the phone number to call me as recently as a few weeks ago, so they're well aware of where I am staying. They also accept collect calls from me and have a specific number to use for collect international calls.

One time when there were some security concerns regarding internet access from Thailand, they acknowledged the problem affected many of their clients resident in Thailand and put in an extra layer of sign-in security to deal with it. Actually (almost) every time I log in it asks me to answer a security question in addition to the usual user name and password.And I sign in numerous times just about everyday.

They also are the ones who send my deposit to Bangkok Bank when I make my online instruction for them to do that every month or so.

No problems and I seriously doubt they would give the boot to retirees, many of whom have taken up residence outside the US.

Edited May 21, 2014 by Suradit69

[Jingthing]

Suradit, are you talking brokerage account or IRA account? The issue here is IRA accounts. Is your IRA account over 500K USD? It's a personal question so can't really expect an answer, but it relates directly to this issue. A willingness to keep higher asset expats and otherwise riskier to lose access.

[Suradit69]

Suradit, are you talking brokerage account or IRA account? The issue here is IRA accounts. Is your IRA account over 500K USD? It's a personal question so can't really expect an answer, but it relates directly to this issue. A willingness to keep higher asset expats and otherwise riskier to lose access.

I have a taxable cash account, a traditional IRA and a Roth IRA with Vanguard. I use both IRA accounts as brokerage accounts. They both have money market accounts also that I use for clearing cash from the IRA brokerage account, but both IRAs are primarily invested in stocks.

I periodically transfer income/gains from those stocks that has settled in those IRA money market funds to my taxable cash account and from there make a transfer to Bangkok Bank in NY. Actually I make regular cash transfers from my Bank America account to the Vanguard taxable account as well and hold the money there until I'm ready to transfer it to Bangkok Bank since Vanguard does the wire transfer without charge.

I really don't feel my accounts are in jeopardy, but Bank America is always pushing me to roll over my IRAs to them, so I suppose that would be a possibility if it became necessary. I access my Bank America account on line from Thailand, but I use my US address for that account too.

Years ago I had the Vanguard accounts using my overseas address, but at one point that did cause a problem. They seemed OK with it once I switched back to account addresses in the US even though it was apparent I was physically outside the US. the problem, if I remember correctly was when I wanted to buy some non Vanguard mutual funds and those funds wouldn't accept my foreign address as shown at Vanguard. I don't think Vanguard raised the issue themselves.

You could just claim you took long holidays in Thailand, but wanted to access your account from here. Certainly they can't expect retired Americans to never spend time outside the country.

Edited May 21, 2014 by Suradit69

[Pinot]

I haven't had a problem with Schwab and don't use a VPN. I would hate to lose them. I use my sister's American address and phone as my home.

One issue for these companies is that you can't trade Mutual Funds from outside the US. A low profile and a VPN should be the ticket. Gees, it's bad enough I have to pay American taxes.

[hawker9000]

Connect with your institution via VPN (with US-based server). You will appear to be accessing the site from inside the U.S. If you're not maintaining a valid US home address, can't help you with that. My IRA and 401K accounts are distributed across multiple institutions (incl Vanguard & Fidelity), all less than $500K, and so far no issues whatsoever (but my home address is in US). This should violate absolutely NO service agreements! (If it does, you need to find a different financial services provider.)

And while on the subject of VPNs, it shouldn't matter a jot that you're using one in a state different than your homestate. People use VPNs (and proxies) for a variety of reasons. IP address is simply not an accurate indication of actual location. A few financial institutions might be set up to alert based on IP, but if so will eventually "learn" to quit doing it after you've called customer service a few times... Marketers sort of have to use it since it's the best "promiscuous" indicator of identity & location available to them in most cases of browser-based data-gathering.

There's an outfit in Florida that will enable you to maintain a US address complete with mail forwarding services. It's intended for the yachting crowd and perpetual business travelers who just need a permanent address (and tax home). Google to find. Fee-based (but not exorbitant IMO).

Edited May 21, 2014 by hawker9000

[TallGuyJohninBKK]

There are lots of mail forwarding businesses in both Texas and Florida because those states, among others, have no state income tax. There are threads here on the various mail forwarding/U.S. address services that people use.

More broadly, I think the perspective to keep on this issue with brokerages is as follows:

Just because one person hasn't had a problem with a particular brokerage, doesn't mean that no one else has or will. We really have little idea who ends up being targeted by which brokerages, and for what reasons. Some people have posted here in the past about having their brokerage accounts closed, and it seemed they couldn't get a straight answer from their own brokerage as to why. The articles Jing linked above said the financial institutions are less likely to hassle you if you have at least $500,000 with that particular firm... But that's a lot to keep in just one institution...

So I think the takeaway from this is... take all reasonable steps to AVOID the potential for such problems. Do the things necessary to fit in will all the other account holders, and you'll most likely go along for years without attracting any problems or attention. But, if someone wants to ignore the issue and not take any preventive measures, they might get along fine... But they also might not, and that's where the headaches begin.

Edited May 21, 2014 by TallGuyJohninBKK

[movsrus]

I have two IRA accounts in the US. One is with Etrade while the other is with Schwab and I access them daily to make trades and review my accounts. To date I have not had a problem nor been asked about the country of residence. I also have a banking account with Capital One and use that to transfer money from the US to Thailand. I return to the US twice a year and use my home IP address when I check my accounts. The only issue I had was with my local bank who asked me why I accessed my accounts via the internet from SEA. I told them I travel extensively and that I check my accounts when I am traveling. Their only comment was that I had to have a US address to continue to maintain my account. I use an PO Box address and they said that was OK.

So far I haven't encountered the issues the OP describes but no telling what the future holds. Should things get to be too much of a pain in the ass I will take a lump sum distribution from my accounts and pay the minimum 10% withholding then move it all offshore. I have friends who have done this and not paid the requisite tax (other than the 10% which is required when doing an non-IRA transfer of funds) and the only thing that happened was the IRS began to take a piece of the monthly SSA payments. Since the amount they take is so small, you can live long and still pay less than you would if you paid the required tax on an IRA distribution.

[hawker9000]

I can see having nothing but a PO Box being a problem someday in the not too distant future. If that axe ever falls, I can see APO/FPO addresses coming not far behind. US Treasury Dept seems to be setting off on the warpath when it comes to US citizens holding and moving significant assets offshore. Credit Suisse certainly just accepted a spanking for facilitating that. Other institutions are sure to be taking notes.

[Pib]

When/if they they get a hard-on for military active duty and military retiree APO/FPO addresses who are assigned/live all over the world then you'll know they have went overboard. Sure many/most financial companies already require a within the U.S. residence address but readily accept an APO/FPO mailing address and sometimes readily accept the APO/FPO address as the U.S. physical address also. With a couple of my banks and credit cards my physical "and" mailing address is my APO address which is an official U.S. Postal System address.

Edited May 21, 2014 by Pib

[TallGuyJohninBKK]

Re using PO Boxes, it depends on whether a person means an actual P.O. Box, or a mail forwarding address, which are two different things.

Generally, the mail forwarding/U.S. address businesses don't set up their account holders with addresses that say "P.O. Box," because those are not allowed for various things, including receiving some kinds of mail/packages and also for some business purposes.

Rather, they tend to give the customer a "#????" account number that can be expressed for mail addressing purposes as "Unit #????" or "Apt #????" or "Suite #????". The Unit / Apt. / Suite references don't carry any of the same limitations as the use of "P.O. Box" does, and would be generally indistinguishable from traditional physical addresses.

The one area where I have seen some problems, although rare, is when opening a new account, some financial institutions actually will run some kind of check that ends up showing them whether a particular address is listed as residential or commercial, and the mail forwarding places tend to be classed as commercial because they're typically located in commercial areas. If the financial institution turns up a commercial address for an individual's application/account, that can kind of raise questions. But that issue/situation seems to be a pretty infrequent one.

Edited May 21, 2014 by TallGuyJohninBKK

[hawker9000]

Active duty using FPO/APO addresses are one thing (and their domicile in the states on record). Retirees quite another. No one has "assigned" them to be overseas. The Treasury Dept's clamping down on them won't have any more impact than erosion of medical benefits, closure of exchanges & commissaries, or changes to retiree compensation. Nobody will even notice or care, except for these particular retirees themselves.

Edited May 21, 2014 by hawker9000

[Frank James]

Hey Jing, thanks for jump-starting my paranoia. I was all right, for a while. Now this to be concerned about.

I have a modest IRA account of long standing with the most excellent company called Vanguard. I am preparing to make a withdrawal, (take a distribution, it's called) which I haven't done for a long time. So just today I listed Bangkok Bank as my bank of record, to which they will be sending the "distribution". This caused no alarms in the system. They seemed entirely familiar with BKK Bank and its routing number. I still have a US residential address, and phone number. This was a good move because I can bypass my US credit union (my former bank of record) who loves to give me a $40 dollar enema (soon to go up, or so they say), along with a hard time, every time they transfer me my own money in any amount, even though it's routed to Bangkok bank's US HQ.

I have logged into my Vanguard account from here hundreds of times, and nothing was ever said. I always am required to answer a "security question."

I'm just wondering how much of a percentage I should have them hold back for taxes. I was thinking 25%, but somebody here is saying 30%? OW!!

I also this very day e-filed that FBAR report, that every American with a foreign bank account containing more than $10,000 at any point in the year, must file with the US Treasury. I'm convinced a lot of people don't yet know about this. Too bad, because they can bone you with a HUGE fine, and ignorance won't cut ice with them. It's done electronically now, which is a big improvement from prior years, when one had to download the form, fill it out by hand, and mail it to Detroit, of all places. Must be done by June 30.

Like Bobby Dylan says, To live outside the law, you must be HONEST, and a man can't give his address out to Bad Company.

What next, I ask you!

[CaptHaddock]

Here is another method. You need good cooperation from a U.S. person, best at your "U.S." address specifically:

1. Install Teamviewer on both computers (Thailand and the U.S.) It's free. They give you the teamviewer ID number for their computer.

2. Login to IRA account via Teamviewer. You are actually in control of the U.S. computer.

3. Password needed for each session from host.

But it's slow.

Brave new faux world.

Cool, huh?

Or install a router running dd-wrt and openvpn at your friend's stateside address. Then vpn into it when you need to. Technically more complex, but other than that solves the problem completely without any ongoing cooperation from the friend.