The HENRY's Guide to Going Global

Why HENRYs are going global

HENRY stands for High Earner, Not Rich Yet — a demographic typically earning $100,000 to $500,000 annually who, despite high income, have not accumulated proportional wealth. The reason is structural: high federal and state income taxes (combined marginal rates of 40-55% in states like California and New York), elevated cost of living in major metro areas, and the lifestyle inflation that accompanies proximity to high-spending peer groups.

A software engineer earning $200,000 in San Francisco might keep $120,000 after federal, state, and payroll taxes — then spend $3,500 on rent, $800 on health insurance, $600 on student loans, and $400 on commuting. The savings rate, despite a top-5% income, often lands between 10-20%. That is not a path to financial independence before 60.

Geoarbitrage changes this equation fundamentally. By relocating to a lower-cost country while maintaining US-level remote income, HENRYs can reduce their cost of living sharply, potentially shelter up to $132,900 of earned income from federal tax via the Foreign Earned Income Exclusion (FEIE), and redirect the savings gap into investments. A HENRY who moves from San Francisco to Lisbon, Chiang Mai, or Mexico City can reasonably increase their savings rate from 15% to 50-60% — cutting their path to financial independence roughly in half.

The rise of remote work since 2020 has made this viable for millions of knowledge workers. Dozens of countries now offer dedicated digital nomad visas. The infrastructure for location-independent professionals — coworking spaces, international banking, telemedicine, global health insurance — is more mature than ever.

But going global is not a simple cost-of-living swap. US citizens face unique complexities: worldwide taxation, FBAR reporting obligations, brokerage account restrictions, Medicare gaps, and Social Security portability questions. This guide covers every dimension you need to evaluate before making the move.

Tax implications for US citizens abroad

The United States taxes citizens on worldwide income regardless of where they live, which almost no other country does. If you are a US citizen or permanent resident, you owe US taxes on every dollar you earn, whether you live in Austin or Lisbon. You must file a US federal return for any year your worldwide income is above the filing threshold, even if the FEIE wipes out the tax.

However, the tax code provides two critical mechanisms to avoid double taxation:

Foreign Earned Income Exclusion (FEIE)

Under IRC Section 911, qualifying US taxpayers abroad can exclude up to $132,900 (2026) of foreign earned income from US federal income tax. This amount is adjusted annually for inflation.

To qualify, you must meet one of two tests:

• Bona Fide Residence Test: You are a bona fide resident of a foreign country for an entire tax year (January 1 through December 31). This generally requires establishing genuine residency — local tax registration, rental lease, utility bills, and intent to remain.
• Physical Presence Test: You are physically present in a foreign country (or countries) for at least 330 full days during any consecutive 12-month period. This is the test most digital nomads use because it does not require residency in any single country.

Critical limitation: the FEIE applies only to earned income — salary, freelance income, consulting fees. It does not apply to investment income (dividends, capital gains), Social Security benefits, retirement account withdrawals, or rental income. If your income is primarily from investments, the FEIE provides limited benefit.

You can also claim the Foreign Housing Exclusion on top of the FEIE, which allows you to exclude qualifying housing expenses (rent, utilities, insurance) above a base amount of $21,264 for 2026 (16% of the FEIE limit), up to a location-specific cap.

Foreign Tax Credit (FTC)

If you pay income taxes to a foreign government, you can claim a dollar-for-dollar credit against your US tax liability using Form 1116. This prevents double taxation on the same income. The FTC is generally more beneficial than the FEIE for high earners in high-tax countries (like France or Germany), because it can offset US tax on all types of income, not just earned income.

FEIE vs. FTC — you must choose. You cannot claim both the FEIE and the FTC on the same dollar of income. For most HENRYs earning under $132,900 in a low-tax or no-tax country (such as the UAE, or Thailand if you keep foreign income outside Thailand), the FEIE is optimal. For those earning above $132,900 or living in high-tax countries, the FTC often provides greater savings. Consult a cross-border tax professional — this is not a decision to make based on internet guides alone.

FBAR and FATCA reporting

Living abroad means foreign bank accounts, and foreign bank accounts trigger mandatory US reporting requirements:

• FBAR (FinCEN Form 114): Required if the aggregate value of all your foreign financial accounts exceeds $10,000 at any point during the calendar year. This includes bank accounts, investment accounts, and even accounts where you have signature authority. Due April 15 with automatic extension to October 15. Penalties for non-filing are severe. The non-willful penalty is up to $16,536 per FBAR report (not per account — Bittner v. United States, 598 U.S. 85 (2023)): the $10,000 statutory maximum, adjusted annually for inflation under 31 CFR 1010.821. Willful violations are far worse and are assessed per account: up to $165,353 or 50% of the account balance, whichever is greater.
• FATCA (Form 8938): Required if your specified foreign financial assets exceed $200,000 on the last day of the year or $300,000 at any point during the year (thresholds for single filers living abroad; lower for US residents). Filed with your tax return.

These are reporting requirements, not additional taxes. But non-compliance carries career-destroying penalties. File them every year you cross the thresholds above. Use a CPA experienced with expatriate returns.

Healthcare abroad: the Medicare gap

Medicare does not cover healthcare outside the United States. This is the single biggest financial gap for US expats and retirees abroad. If you move to Portugal at 55 and plan to stay through retirement, you cannot rely on Medicare for healthcare coverage — it simply does not pay for foreign hospitals, doctors, or prescriptions, with extremely limited exceptions near the US border.

You have three options for healthcare abroad:

• Local public healthcare: Many countries offer residents access to their public health systems, sometimes for free (Portugal's SNS for registered residents) or for annual fees (Mexico's IMSS voluntary insurance costs about $840–$1,200 a year for ages 50+ in 2026). In Thailand, foreigners pay public-hospital fees, which are lower than private ones. Quality varies significantly. Public systems in Western Europe are generally excellent; in Southeast Asia and Latin America, they are adequate for routine care but you may want private insurance for specialist or emergency care.
• International private health insurance: Companies like Cigna Global, Aetna International, GeoBlue, and IMG Global offer comprehensive plans for expats. Prices are by quote and depend on age, coverage level, and whether you include US coverage. These plans typically cover you in any country, with direct billing at major international hospitals.
• Local private insurance: Available in most countries at a fraction of US prices. In Mexico, private coverage runs $100-$300/month. In Thailand, $50-$200/month. In Portugal, supplemental private insurance costs approximately €50-100/month. These plans are jurisdiction-specific and do not cover you in the US.

Medicare Part B consideration: If you plan to return to the US eventually, you face a choice. You can disenroll from Medicare Part B while abroad and re-enroll later, but you will pay a late enrollment penalty of 10% for each full 12-month period you were eligible but not enrolled. This penalty lasts for the rest of your life. Some expats maintain Part B ($202.90/month in 2026) as insurance against needing to return to the US for medical reasons.

Social Security portability: which countries qualify

The good news: US Social Security benefits are generally payable abroad. You can receive your monthly benefit deposited directly into a US bank account (or in some cases a foreign bank account) while living in most foreign countries.

The US has totalization agreements with over 30 countries. These agreements serve two purposes: they prevent double Social Security taxation (so you do not pay into both the US and foreign social security systems simultaneously), and they allow you to combine work credits earned in both countries to qualify for benefits.

Countries with US totalization agreements include:

• Europe: Portugal, Spain, France, Germany, Italy, Netherlands, UK, Ireland, Sweden, Denmark, Norway, Finland, Switzerland, Austria, Belgium, Czech Republic, Greece, Hungary, Iceland, Luxembourg, Poland, Slovak Republic, Slovenia, Romania (from September 1, 2026)
• Americas: Canada, Chile, Brazil, Uruguay (Mexico has no agreement)
• Asia-Pacific: Australia, Japan, South Korea

Notable absences: Thailand, Malaysia, UAE, Colombia, Costa Rica, and most of Southeast Asia do not have totalization agreements with the US. You can still receive your Social Security payments while living in these countries (benefits are still payable), but you cannot combine work credits, and if you worked in both countries, you may have paid into both systems without being able to aggregate.

Restricted countries: US Social Security payments cannot be sent to Cuba or North Korea (Treasury rules), or to Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan or Uzbekistan (SSA restrictions). If you live in a restricted country, benefits are withheld until you move to a non-restricted country or return to the US. The full list is maintained by the Social Security Administration.

Use the Social Security Calculator to estimate your benefit amount, then factor it into your retirement-abroad cost projections.

US investment accounts abroad: what you can and cannot keep

One of the most common fears about moving abroad is losing access to US retirement and brokerage accounts. The reality is more nuanced — and generally more favorable — than most people expect.

401(k) and IRA accounts

Your 401(k), traditional IRA, and Roth IRA accounts remain fully accessible regardless of where you live. You can hold them, manage them, and take distributions from them while living abroad. There are no restrictions on maintaining these accounts as a US citizen in any country.

Key considerations:

• Contributions: You cannot contribute to a 401(k) unless an employer offers one. IRA contributions need earned income that is taxed in the US; foreign income counts unless you exclude it with the FEIE. If you are self-employed abroad and claiming the FEIE, your excluded income does not count as earned income for IRA contribution purposes — this can eliminate your ability to contribute.
• Roth conversions: Available regardless of location and can be strategically advantageous. In a year where your earned income is low (perhaps a transition year when moving abroad), converting traditional IRA funds to Roth at a low marginal rate can be extremely valuable. The converted amount grows tax-free thereafter.
• Withdrawals: Subject to US tax rules (10% penalty before 59.5 for traditional, unless an exception applies). May also be taxable in your country of residence depending on the applicable tax treaty.

Brokerage accounts

US brokerage account policies vary significantly by provider:

• Vanguard: Generally allows existing accounts to remain open for most countries but restricts new account openings, new mutual fund purchases, and certain transactions. You must update your address. Policies vary by country and change frequently.
• Schwab: Schwab International supports accounts for US citizens in many countries. More permissive than Vanguard but still has country-specific restrictions. Call before moving to confirm your destination is supported.
• Fidelity: Similar to Vanguard — existing accounts generally stay open but new account openings and certain transactions may be restricted depending on the country.
• Interactive Brokers: The most expat-friendly US brokerage, supporting accounts in over 200 countries and territories. If you anticipate moving frequently or to a less-common destination, IBKR is the safest choice.

Critical rule: avoid PFICs. A PFIC (Passive Foreign Investment Company) is any foreign-domiciled mutual fund or ETF. If you buy a European ETF or a Thai mutual fund while abroad, the US taxes these under the punitive PFIC regime — excess distributions are taxed at the highest marginal rate plus an interest charge, with no preferential capital gains treatment. The solution: keep all your investments in US-domiciled funds (Vanguard Total Stock Market, S&P 500 ETFs, etc.) through a US brokerage account.

Visa options: digital nomad, retirement, and investment visas

The visa landscape for location-independent professionals and retirees has expanded dramatically since 2020. Most countries now offer at least one pathway for financially independent foreigners to live legally long-term.

Digital nomad visas

Dozens of countries now offer dedicated digital nomad or remote worker visas. These typically require proof of remote income (usually $2,000-$4,000/month minimum), health insurance, and a clean criminal record. Duration ranges from 6 months to 2 years, often renewable. Popular options include:

• Portugal D8 Digital Nomad Visa — requires 4x Portuguese minimum wage (€3,680/month income in 2026)
• Spain Digital Nomad Visa — requires employment with a non-Spanish company or freelance income
• Thailand Long-Term Resident (LTR) Visa — for remote workers earning $80,000+/year
• Mexico — no formal digital nomad visa, but Residente Temporal covers remote workers
• UAE Freelance/Remote Work Visa — requires $3,500/month income, based in Dubai
• Croatia, Greece, Estonia, Barbados, Colombia — all offer various digital nomad programs

Retirement visas

Designed for retirees with pension or investment income. Income requirements are generally lower than digital nomad visas because the expectation is passive income, not employment:

• Portugal D7 Passive Income Visa — €920/month minimum in 2026 (the Portuguese minimum wage)
• Thailand Non-Immigrant O-A — age 50+, THB 800,000 (~$23,200) in savings or THB 65,000/month income (~$1,900), plus health insurance with at least $100,000 of cover
• Mexico Residente Permanente — retirees with a pension (there is no age route), with pension income of $6,788/month or an average balance of $273,025 (San Diego consulate, 2026; each consulate sets its own figures), or after 4 years as a temporary resident
• Malaysia MM2H (Malaysia My Second Home) — financial requirements vary by age and state
• Panama Pensionado Visa — $1,000/month pension income, one of the oldest and most generous programs

Investment and golden visas

These grant residency (sometimes leading to citizenship) in exchange for significant financial investment in the country. Popular programs include Portugal's Golden Visa (€500,000+ investment, though the real estate pathway closed in 2023), Greece's Golden Visa (€400,000 or €800,000 in property depending on location, or €250,000 to convert or restore certain buildings), and various Caribbean citizenship-by-investment programs (from $200,000). These are relevant primarily for UHNW individuals or those seeking a second passport as part of a broader tax and estate planning strategy.

The decision framework: evaluating a country for relocation

Moving abroad is not a single decision — it is a matrix of at least six dimensions, each of which can independently make or break the experience. Evaluate every destination against all six:

1. Tax impact

What is your total tax burden in the destination country? Does the country have a tax treaty with the US? Can you use the FEIE or FTC effectively? Some countries (UAE, Bahamas, Cayman Islands) have no income tax. Others (Portugal's former NHR regime, Malaysia) offer preferential tax regimes for new residents. Others (France, Germany) have high tax rates that may exceed US rates, making the FTC more relevant than the FEIE.

Model your specific tax situation before committing, ideally with a tax professional who works across both countries. For living costs, the Geographic Arbitrage Calculator compares your spending with each country's average.

2. Healthcare quality and cost

What does public healthcare cover for residents? What does private insurance cost? Are there international-quality hospitals accessible from where you plan to live? For retirees: what happens if you develop a chronic condition — can you manage it locally or would you need to return to the US?

3. Cost of living

Use real data from sources like Numbeo to compare specific cities, not just country averages. The difference between Lisbon and a small Algarve town, or between Bangkok and Chiang Mai, can be 30-50%. Factor in housing, food, transportation, healthcare, and the “expat premium” — the tendency to spend more on imported goods, Western restaurants, and international schools if you have children.

4. Visa pathway and stability

Can you get legal residency? Is the visa renewable? Does it lead to permanent residency or citizenship? How stable is the immigration policy — has the country changed visa rules frequently (as Portugal has with its Golden Visa and NHR programs)? Avoid building your life in a country where your right to remain depends on a program that could be cancelled with the next government.

5. Community and social infrastructure

Is there an established expat community? Are there English-speaking professionals (doctors, lawyers, accountants)? How easy is it to make local connections? Loneliness is a common reason expats move home.

6. Safety and political stability

Check the US State Department travel advisories, the Transparency International Corruption Perceptions Index, and the Global Peace Index. Consider natural disaster risk, political stability, rule of law, and personal safety for your demographic.

Country guides: deep dives by destination

Each of the following guides covers visa requirements, tax treatment, healthcare, Social Security portability, cost of living, banking, and a decision checklist specific to that country:

• Retire in Portugal: A US Expat's Complete Guide — D7 visa, NHR/IFICI tax regime, SNS healthcare, totalization agreement, Lisbon/Porto/Algarve cost of living
• Retire in Thailand: A US Expat's Complete Guide — LTR visa, remittance-based taxation, affordable private healthcare, no totalization agreement, Bangkok/Chiang Mai/islands
• Retire in Mexico: A US Expat's Complete Guide — Residente Temporal/Permanente, US-Mexico tax treaty, IMSS public healthcare, Social Security in Mexico, CDMX/Merida/Lake Chapala

Practical next steps: building your global relocation plan

Going global is not a leap — it is a sequence of deliberate steps. Here is the order that minimizes risk and maximizes optionality:

1. Run the numbers first. Use the Geographic Arbitrage Calculator to compare your current spending with the average cost of living abroad. Use the Net Worth Calculator to establish your baseline.
2. Consult a cross-border tax professional. Not a general CPA — a specialist in US expat taxation. They will help you determine whether the FEIE or FTC is optimal, structure your income for the destination country, and ensure FBAR and FATCA compliance. This is a $500-$2,000 investment that prevents $50,000+ mistakes.
3. Scout the destination in person. Spend 2-4 weeks in your target city. Rent an Airbnb in a residential neighborhood, not a tourist area. Open a local bank account if possible. Visit hospitals. Talk to other expats. Do not commit to a multi-year visa based on a vacation.
4. Secure your US financial infrastructure before leaving. Notify your brokerage of your planned move. Consolidate accounts if needed. Set up a US mailing address service (many expats use a family member's address or a virtual mailbox service like Traveling Mailbox). Ensure your US bank account will remain accessible from abroad.
5. Apply for the visa. Each country has different processing times and documentation requirements. Start 3-6 months before your intended move date.
6. Set up healthcare coverage. Arrange international or local health insurance before arrival. Do not plan to rely on travel insurance for more than the first 30 days — travel insurance is designed for emergencies, not ongoing care.
7. Establish local banking and finances. Open a local bank account. Set up a multi-currency account (Wise is the most popular among expats) for low-cost currency conversion. Understand FBAR reporting obligations from day one.

Frequently asked questions

What is the Foreign Earned Income Exclusion (FEIE) for US citizens abroad?

The FEIE allows qualifying US citizens living abroad to exclude up to $132,900 (2026) of foreign earned income from US federal income tax. To qualify, you must meet the Bona Fide Residence test (full tax year as a resident of a foreign country) or the Physical Presence test (330 full days outside the US in a 12-month period). The exclusion covers only earned income — not investment income, Social Security, or retirement withdrawals.

Can I keep my US brokerage account if I move abroad?

Generally yes, but policies vary by brokerage and destination country. Vanguard and Fidelity allow existing accounts to remain open with some restrictions on new purchases. Schwab International supports many countries. Interactive Brokers is the most permissive, covering 200+ countries. Contact your brokerage before moving to confirm your destination is supported. Avoid foreign-domiciled funds, which trigger punitive PFIC tax treatment in the US.

Does Social Security work if I retire abroad?

Yes, for most countries. As a US citizen you can usually be paid wherever you live, agreement or not. The US has Social Security agreements with 31 countries, including Portugal, Japan, Canada and most of Western Europe (not Mexico): they stop double Social Security tax and let you combine work credits from both countries to qualify. Use the Social Security Calculator to estimate your benefit.

What is a HENRY and why are HENRYs going global?

HENRY stands for High Earner, Not Rich Yet — professionals earning $100,000 to $500,000 who have high income but limited accumulated wealth due to high taxes, high cost of living, and lifestyle inflation. Geoarbitrage allows HENRYs to maintain US-level income while spending at emerging-market prices, potentially doubling their savings rate and cutting their FIRE timeline in half.

What happens to my 401(k) and IRA if I move abroad?

They remain fully accessible. You can hold, manage, and take distributions from 401(k) and IRA accounts regardless of where you live. You cannot contribute to a 401(k) unless your employer offers one, and IRA contributions need earned income you have not excluded with the FEIE. Roth conversions remain available and can be strategically advantageous in lower-income transition years.

Do US citizens abroad still have to file US taxes?

Yes, if your worldwide income is above the filing threshold. The US taxes citizens on worldwide income regardless of residency. You may also owe FBAR filings (foreign accounts over $10,000 aggregate) and FATCA Form 8938 (foreign financial assets over $200,000 for single filers abroad). Penalties for non-filing are severe. Work with a CPA experienced in expat returns.