Non-US Investing • Potentially moving from US to EU due to sector collapse / managing currency and other risks

Hello everyone,

I am posting to ask for recommendations on how to protect myself from currency, and other potential risks in the second half of my accumulation phase and FIRE.

I am EU/US dual citizen living in very high cost of living area in the North East US. I was born and raised in the EU and moved to the US ten years ago for work, got married since, and I am now a US citizen, since 2023. Unfortunately, I am one of the individuals whose sector of activity and general specialization has been dismantled by the new government, namely foreign aid. I don't want to make this post particularly political but reconversion realistically will be quite complicated, and prospect for jobs in my field in the short term are null, and it looks pretty bleak on the medium term, particularly in the city we live in. My wife and I (DINKS) are therefore considering moving from city, sector of activity, and an option is to move back to the EU to be able to continue working in my sector of activity, as an option among many others. This is also feasible because my wife could transition to a full remote position with her current US company.

We are not in financial trouble for now, since my wife works in an entirely different sector, and we are also pretty frugal (30k USD each in annual spending, all included), and I have about 2 years of funding secured in cash and/or unemployment insurance. Our joint goal is to FIRE with 2 M USD total by 45. I currently have around 400k invested, and she has close to 250k. We are both 35.

Since we are considering moving to the EU, I have a few doubts that relate to the next few years in terms of accumulation and/or withdrawal and currency rate risks.

In my case, it looks like I am heading to a coast Fire situation, since potential income for me in Europe in my sector are closer to 60k USD per year, vs the 100k USD I was making. Even though cost of living would be 30% lower where I am thinking to move, it also looks like after heavier taxes, I will not be able to invest as much as I used to (50% of income for the past 5 years).

Questions:

-Given this, I am wondering what would be the best way to “insure” ourselves against asset depreciation and particularly USD devaluation vs the euro. None of my funds are unhedged, and I was wondering if this would be one of the way to go? What would be the best way to protect myself and maintain the same ability to “spend” in Europe, in euros, after FIRE?

State pension equalisation Treaty, if it exists, with US Social Security is important.

Unhedged bond funds focusing on Eurozone bonds would be the best way. But I am not sure if those are available in the US? Also global equity funds (non USA) have a degree of protection against USD depreciation.

The thing is it go either way.

-If we move to the EU, should we adopt a “home bias” with investing more heavily into European stocks and bonds? So far we have tried to keep our mix at global stocks/bonds weighting.

I wouldn't favour that. Let the market decide the optimal weightings. The EU has massive problems all its own, but, of course, there's upside if it tackles them. As a UKian I am now merely a detached observer, but there are some very exciting things going on (positives) as well as the known negatives about energy supply, militant neighbours, internal political divisions & politics, etc.

If you hold Global Equity Index, then you are letting the market, and its best informed participants, decide on value. If you wanted to go 50/50 US/ non-US I don't see that as a big problem (ie a bet somewhat against the USA but not enough to destroy performance if it continues to outperform as it has historically).

-I understand that by living in the EU, I would be unlikely to be able to contribute to a 401k anymore. Should I mostly invest in IRA/Taxable account then? Do you know if there are better ways to invest while being there? I left right after finishing my master degree, so I do not know much about investment landscape in the EU.

The EU investment landscape is quasi-irrelevant to you. It varies a lot by countries, but there are ETFs that allow one to pursue a Boglehead (low cost indexation) approach. However see taxes below.

As a US citizen, you are covered by onerous IRS PFIC rules. Thus, you really cannot buy funds which are not domiciled in the USA. Unfortunately, under the PRIIP rules of EU financial services, brokers in the EU cannot offer you US funds & ETFs. This is a Catch-22 which affects all Americans living in EU (and UK, currently). Exception is if you can persuade a financial institution that you are an "accredited investor" (typically either wealthy or work in financial services) and therefore the PRIIP protections don't apply.

We have had many discussions here about the issues this brings. Including whether one can maintain a US address to avoid, for example, having your account frozen by Vanguard once they understand you are not US resident.

There are other brokers that are not so aggressive. I would have at least 2 US broking accounts, however.

See wikis here.

Here in the UK we suggest that owning Berkshire Hathaway stock is something of a proxy for the US stock market. IRS is fine with that. So AFAIK are European and UK brokers.

-If my wife maintains remote employment for the US company, will she be able to invest as usual ? Her parents live close by and we could establish residence there for investments/tax purposes.
-Any other advice you might have given my situation and our potential transition to the EU is very welcome.

In most countries, it's probably best if you and your spouse retain entirely separate affairs. Separate banking and investment accounts. Ideally under different last names (I am just throwing that in, but so often something stupid like having the same name causes issues). This is because at some point you may relinquish US citizenship for tax purposes. That would be harder for her to do as she would need to become a citizen of your new home of residence.

Our current investments/income are divided into:

My investments: Total: 460,000 USD
Cash: 60,000 USD (including 30,000 severance package that I should receive soonish)
Total invested: Around 400,000 USD, roughly divided into the following subcategories accounts, noting that all my investments are divided 80/20 stock bonds, 60/40 US international for both stocks and bonds, all in index funds at fidelity (FKSAX, FTIHX, FXNAX and FBIIX).
401 k : 225,000 USD
Roth IRA: 67,000 USD
IRA: 31,000 USD
Taxable Account: 77,000 USD

My wife's investments are divided similarly but for an amount closer to 250k USD, but she might catch up soon since she continues to max out Roth IRA and 401 k + some into taxable account every year. Her income and my lost income are/were both around 100 k annually.

Thank you in advance.

Kalzarak.

This is all fine. I would check threads here as to relevant US brokers and get accounts opened in at least 2. I believe you can roll over your 401k? (I am not US based and I can't tell you whether that's a good thing to do).

Statistics: Posted by Valuethinker — Mon Mar 10, 2025 4:21 am — Replies 4 — Views 788

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