I hold dual US and Myanmar citizenship. I am retired and receive social security benefits every month because I contributed social security taxes while working in the US.
If I decided to renounce my US citizenship, would I lose my monthly benefits from that fund? May I seek financial advice from your group of advisers with or without a fee?
ANSWERED BY... Teera Phutrakul, CFP, chairman, TFPA So you want to divorce Uncle Sam, do you? Well, you are not alone. The billionaire co-founder of Facebook, the only American member of Monty Python, the founder of Carnival Cruise Lines and the owner of the Miami Heat NBA franchise have all handed in their US passports. Apparently, it was all in the name of tax avoidance.
Once you have renounced your US citizenship, you become a non-resident alien (NRA). As an NRA, it depends on your place of residence whether you can continue to collect social security in the long run. Depending on a combination of US bilateral agreements (or lack thereof), your current citizenship and your country of residence, it can range from only a minor tax difference to having social security payments discontinued after more than six months outside the US.
Note that dependents' and survivors' benefits may also be affected by change of status from US citizen to NRA. In any case, you should hold on to your social security card because what you have in your social security account always remains there and your social security number is unique to you.
Best advice is to check with the Federal Benefits Unit (http://www.socialsecurity.gov/foreign/foreign.htm) or via the US embassy website.
However, in your case, I would think long and hard before renouncing your US citizenship. Given the quirkiness of the Myanmar military junta, you may be rendered stateless and so lack the protection of any government.
On top of that, there is the US Exit Tax to think about, especially if your net worth exceeds US$2 million. In your case, you are likely to be exempted due to your dual citizenship.
Lastly, protection abroad may be an issue for some US citizens who find themselves in politically unstable parts of the world such as Iraq, Iran, Syria and, yes, Myanmar too.
Citizens rarely need the US armed forces to keep them safe in a sticky situation abroad. But if they do, it is comforting to know that Uncle Sam, with his 11 active aircraft carriers and Seal Team Six, is always on call should help be needed.
The Thai Financial Planners Association is the Certified Financial Planner (CFP) trademark licensing authority in Thailand. It is a self-regulated, non-profit group of financial advisers and experts from various organisations set up to give advice to investors. Questions can be submitted through email@example.com or the TFPA webboard, www.tfpa.or.th
About the author
Writer: Thai Financial Planners Association