Coming to America

In a country as big as the United States, the cost of living across regions and states can vary as widely as the geography, climate, and culture. To top that off, state and local laws can differ more, state-to-state and county-to-county, than in countries with more centralized legal systems. In short, New York is not Nebraska and San Francisco sure ain’t San Antonio.

As in American supermarkets, where rows and rows of breakfast cereals await you, there is also a bewildering choice of banking options. These range from commercial banks, which have the benefit of convenience and multiple branches, to credit unions, which may offer more personalized customer service, to investment companies which, in exchange for higher fees, will help you manage everything from basic checking to sophisticated investments. Each of these offers its own slate of accounts with differing requirements, so it pays to shop around. And if you already bank at an institution that has a U.S. presence, you may be able to open an international account before you even get to your new home!

One of the most difficult things about moving from abroad is the lack of a credit history, without which anything from a car loan to a mortgage may be out of reach without a co-signer. A strong credit history could help improve many aspects of your life in the U.S. In fact, having some history of debt management is better than having none. It may seem counterintuitive, but companies and individuals will often want to see evidence that you can manage money responsibly before they enter into a contract with you. This means that potential employers, landlords, utility providers and insurance companies may ask to see your credit score and, occasionally, your full credit report. So, even if you have no need or plans to borrow money, it’s still a good idea to try to build and carefully manage your credit score. You can do this by applying for and using a credit card regularly. To build positive credit and ensure you’re not in debt, make sure that you never spend more than you’re able to pay back, pay your credit card bill on time each month, and maintain plenty of room between your balance and credit limit.

As a “non-resident alien,” you will have to pay tax on income earned in the U.S. Once you qualify for “resident alien” status, however, your income will be taxed like an American citizen. Which means – and this comes as a surprise for many – that your worldwide income is subject to tax, not just what you earn in the U.S. Check to see if your country has a tax treaty with the United States, which may entitle you to reduce or eliminate U.S. tax in areas such as pensions, interest, dividends, royalties, and capital gains. Also, a financial advisor can help you determine how best to set up your investments before moving to avoid being unnecessarily clipped by the Internal Revenue Service (IRS).

Although you will have to pay into the American Social Security for at least ten years before qualifying for retirement benefits, here’s the good news: you may be able to transfer your own pension plan with you. UK residents, for example, can transfer their pension to a qualifying US plan through the Qualifying Recognised Overseas Pension Scheme. It’s worth seeing what arrangements your home country has in place.