What work abroad means for Social Security, taxes

Other reader questions cover sole ownership of a home and college tuition.

- By Liz Weston

A WOMAN walks near dawn in the banking district of Frankfurt, Germany. The U.S. tax code has provisions to help people working abroad avoid double taxation.

(KIRILL KUDRYAVTSEV AFP/Getty Images)

Dear Liz: It has become difficult to find good employment in my field. I've been able to find several openings that sound exactly like what I want outside the U.S. If I successfully apply for a position in a foreign country, it could mean paying income taxes into both the U.S. system and the foreign country. Not being a citizen of that country may also limit possible future employment opportunities. Once employed and resident in that county for the required time, I could apply for citizenship and pay the fee to renounce U.S. citizenship.

Obviously, this step would come with significant financial implications, including no longer being able to receive Social Security (into which I have paid during my U.S. employment). My banking and investment accounts would have to be completely rearranged as well. Obviously, a large number of people emigrate and change their citizenship every year, but how does one navigate all this financially?

Answer: You've come to some interesting but likely erroneous conclusions about working abroad.