Financial Advisors for Immigrants & Foreign Nationals

Whether you’re a foreign national living in the US with a green card or working on a visa, you have unique needs when it comes to financial planning. If you’re on a path toward US citizenship or planning to return to your home country, the financial decisions you make today can have a significant impact on your financial future.

It can feel overwhelming for immigrants to try and navigate the complexities of the US tax system, not to mention making sense of the numerous retirement and savings accounts and their potential tax benefits. Beyond taxes, understanding how to make the most of your employee benefits, saving for retirement, and funding your children’s education are additional priorities that can take a lot of time to figure out on your own.

Fortunately, there are financial advisors who have walked in your shoes and know what it’s like to arrive in the United States feeling confused and unsure about money matters. By hiring a financial advisor who specializes in working with immigrants and foreign nationals, you’ll feel more confident knowing you can ask questions and get answers that other advisors simply wouldn’t know or understand.

It’s easier today than ever before to find a specialist financial advisor dedicated to working with immigrants and foreign nationals in the US. Beyond researching financial advisors in your neighborhood, which could significantly limit your access to specialists, you may find the best financial advisor for you lives several states away and is easy to work with virtually, often via Zoom online meetings, for example.

So is a financial advisor who specializes in serving immigrants right for you?

Let’s learn more by getting answers from financial advisors featured on Wealthtender who offer their perspectives on the potential benefits of working with a specialist for immigrants.

👩‍💼 Get to Know Financial Advisors Who Specialize in Serving Immigrants

This page is organized into sections to help you quickly find the information you need and get answers to your questions:

1. Q&A with Financial Advisors Who Specialize in Serving Immigrants
2. Get Answers to Your Questions About Financial Planning for Immigrants
3. Browse Related Articles

– Financial Advisors Who Specialize in Serving Immigrants –

Q&A with: ↗️ Jane Mepham | ↗️ Tamara Witham

Three Questions with Jane Mepham, CFP®:

We asked Austin-based financial advisor Jane Mepham to answer three questions she often hears from the immigrants she serves when helping them develop a financial plan for their future.

Q: I’m currently in the US on a work visa. Why should I consider hiring a financial advisor in the US?

Jane: The US financial system is complex and can be very confusing to somebody new to the country. A good financial advisor is invaluable as they can guide you through not only setting yourself up financially but also in helping you prioritize competing financial needs. You are going to have a lot of questions especially the first year, along the lines of setting up a budget, that might include supporting your family overseas, choosing the right kind of retirement plan, health, life (not every company will agree to insure you) or disability insurance. A financial advisor can easily guide you through these issues.

One of the biggest issues you are likely to face is the tax implications of being a US person, keeping in mind that the US taxes you on worldwide income and your immigration status. You’ll need to figure out if you should be filing taxes as a tax resident or non-resident. In addition, you are likely to have reporting requirements if you have overseas accounts, for example filing FBAR forms. At this juncture, a financial advisor becomes critical, as they can help you figure out these issues. Picking the right advisor and working with them over a couple of years, may prove to be the best decision you’ll make in your life in the US.

Here are some resources that might answer some of your questions as you start on your work visa journey in the U.S.

• The 6 top things to do when starting a job on H-1B visa
• How to figure out your tax residency status which is different from your immigration status
• The top 5 things to know about FBAR filing if your name can be associated with an overseas account

Get to Know Jane Mepham:

View Jane’s profile page on Wealthtender or visit her website to learn more.

Q: What should I consider before participating in my US employer’s 401k plan?

Jane: The 401k plan is a retirement plan offered by many US employers. Every employee including those on works visas is eligible to participate. Different companies have different waiting periods. Here are some things to consider before participating:

• Regardless of how long you intend to stay in the country (work visas are not permanent), contributing to the 401k plan reduces your taxable income, meaning you get to pay lower taxes now.
• Typically, we’d recommend maxing out the plan. In 2021, you can invest up to $19,500. If you are not sure about being able to max it out, consider if your company is offering a match, and plan to save up to that amount to get the free money (employer match).
• This also applies to the situation where money is a little tight, and you are not sure you are able to max it out. Again, consider putting enough to earn the employer match especially as you are starting out on a new job. The goal is to take advantage of compound interest and have your money in the market for a long time.
• Another thing to consider are the investment options offered in the plan. If there are life-strategy or target-date funds, those are the easiest ones to start with. If the investment options are below par, again consider saving up to the employer match.

Q: If I’m planning for my children to attend college in the US, what’s the best way for me to save for their education?

Jane: Immigrants tend to value education greatly and they are willing to do whatever it takes to help their kids attend the best schools. To accomplish this goal, start saving for college as soon as possible. There are a couple of ways to do this, and each has its own advantages and disadvantages.

529 plan – This is a government-provided plan specific to education and in this case college. The money goes in after taxes, grows tax-free, and comes out tax-free if it’s used for education-related expenses.

Every state has its own plan and most of them will allow non-residents to open a plan there. There are about six states that don’t allow outsiders into their plan. In terms of where, if your state offers some type of tax break (deduction or tax credit), then it makes sense to consider opening a plan in your state.

Finally, keep in mind that the beneficiary must be a citizen or a permanent resident to be able to use the funds in the plan. If the intended beneficiary is not a citizen yet, you can open the account with yourself as the beneficiary and change it later to the kids when they become citizens or permanent residents.

If you end up not using the money, for education-related expenses, you’ll pay taxes and a 10% penalty fee on the earnings. Here is a blog post that answers a question I see come up a lot in this space about opening a 529 plan if on a work visa.

Roth IRA Account – We typically think of this as a retirement account, but it can be used for saving for college as well. Your income must be below a certain threshold to be able to open the account, but with the backdoor Roth option, the income threshold is not an issue anymore.

In 2021, the max that can be put into the account is $6,000 ($7,000 if over 50). Ideally, both parents will each open an account. The initial contribution can be withdrawn anytime, penalty-free for education-related expenses while allowing the earnings to continue growing for retirement. If you withdraw the earnings for college expenses, the 10% penalty does not apply, but you’ll pay taxes on that.

At age 59 and ½, the earnings can also be withdrawn tax-free and penalty-free to pay for college expenses.

Brokerage Account – There are no tax advantages to this account, but it gives you a lot of freedom in what you do with the money, how you invest it, etc. If the funds are held in the account for more than a year, you’ll pay capital gains taxes which is lower than ordinary income tax. In applying for college aid, the account is included as the parents’ assets.

Custodial Accounts – The two main accounts in this space are UGMA (Uniform Gift to Minors Act) and UTMA (Uniform Transfer to Minors Act). Keep in mind that even though you are the account owner, the child legally owns the money in the account. They get to control the account when they reach the legal age as defined by the state. It’s a great way to start gifting kids money early on in life but consider that at the legal age they may choose not to use the account for college education and there is nothing you can do about it. It’s considered a child’s asset for college funding considerations.

 Coverdell Education Savings Accounts (ESA) – This account is very similar to a 529 plan but is limited in how much you can contribute. You can only save up to $2,000 per year, per beneficiary and you can only use it if your income is below $110,000 ($220,000 if married).

All the above plans can be combined to come up with something ideal for each family depending on their unique situation. A financial advisor is able to help you pick the best plan keeping in mind your immigration status, your income, your needs, and other issues specific to your family.

Three Questions with Tamara Witham, CFA, CFP®:

Tamara Witham is a financial planner based in Harrison, New York, who specializes in serving first-generation Americans and foreign-born families. She answered three questions that she frequently tackles when meeting with her clients.

Q: What is a common financial planning challenge unique to first-generation Americans and foreign-born individuals and families that you frequently encounter when working with your clients? How do you work with them to overcome this challenge?

Tamara: First-generation Americans and foreign-born individuals are often overwhelmed by the complexities of the U.S. financial system. After helping foreign-born families for many years, we’ve learned the importance of a customized approach that respects our clients’ cultural backgrounds and values. We aim to address the confusion by explaining key terms and strategies in plain language while creating a financial plan tailored to their retirement dreams and goals.

Whether they plan to retire here or abroad, we can help them navigate investment and tax considerations to develop a strategy for building long-term savings. Suppose a client plans to retire outside of the U.S. Certain tax-advantaged retirement accounts may not provide the same advantages as if they stayed stateside. We’re here to simplify the process and help clients make informed decisions to save and prepare for the lifestyle they envision.

A concrete example is understanding and simplifying the decision to purchase insurance. Insurance needs can vary significantly between the U.S. and other countries. Adequate coverage is crucial to protecting loved ones financially. Many employers provide basic life insurance between one- and two-times base salary. In our experience, this base benefit may not be enough to adequately protect a family in the event of a premature death. Additionally, employer policies may not be portable if an employee leaves. Many families utilize private insurers to guarantee complete customizable protection. We explain options to find the right amount and type of policy based on each situation.

Navigating U.S. health insurance also poses challenges. We help compare company, private, and public exchange plans so families can obtain optimal coverage. We also explore the options of associated Health Savings Accounts (HSA) and Flexible Spending Accounts (FSA).

Disability insurance can replace income lost to injury or illness. However, supplemental policies are expensive, pricing out some families. Also, many insurers deny claims for those residing abroad, even with premiums paid, which may be necessary for someone looking to return to his or her native country in the event of a disability.

Every family has unique priorities and risk tolerance. Through discussion, we craft tailored recommendations on available coverage to suit our clients’ finances and safety needs. We aim to educate clients about offerings so they will make informed choices to safeguard their families’ financial security.

Q: How do the services you offer first-generation Americans and foreign-born individuals and families distinguish your firm from other advisory firms?

Tamara: According to research by Herbers and Company, nine in ten investors want their advisors to help with tax planning, and three-quarters want help with retirement planning services. However, few advisory firms offer both services, and even fewer do it well. GreenLife has focused on concrete solutions for our clients’ tax planning and retirement needs.

The U.S. income tax system is often more complex than many of our clients’ respective native country’s tax systems, especially concerning reporting foreign-held income. In the U.S., full income tax reporting of worldwide financial assets and income is required, meaning the IRS may tax assets held abroad. Tax residency status is not the same as immigration status. As a U.S. resident with overseas assets, several complex reporting requirements may apply, which can trigger U.S. tax residency status.

We use tax planning software to incorporate a client’s tax profile into our financial planning services. We’re excited to offer tax planning as part of our firm’s comprehensive financial planning because taxes impact virtually every aspect of one’s finances. A client’s tax return is a financial fingerprint: it’s unique for that person, complete with valuable clues and information, all buried in dozens of pages and hundreds of numbers. Understanding the return equips us to have more valuable and actionable conversations with our clients. Additionally, we demystify the world of income taxes and help clients understand this vital piece of their unique financial picture.

Tax planning includes reviewing a tax return in depth to identify potential opportunities, both now and in the future, to minimize lifetime tax liabilities. Tax planning differs from tax preparation, which may focus on compliance with current tax laws and rules. By analyzing a client’s current and prior tax returns, we can recommend steps to potentially lower the next year’s tax bill and uncover other long-term planning opportunities. 

Here are some of the ways we may be able to leverage a client’s return during financial planning and investing strategies:

• Tax-Efficient Portfolio Management: Being fluent in a client’s tax status informs better investment strategies, such as realizing capital gains rather than ordinary income for greater tax efficiency.
• Retirement Optimization: Knowing a client’s tax details helps us determine the role of each retirement account in his or her overall financial planning strategy. Conversations often focus on Roth IRA conversions.
• Tax-Sensitive Withdrawal Strategies: Taxes are one factor when withdrawing retirement funds. We can illustrate how proper tax management is critical for withdrawal decisions.
• Coordination with a Client’s CPA: Understanding a client’s tax profile allows us to collaborate effectively on an integrated financial strategy with tax professionals.
• Ongoing Tax Management: Tax laws change frequently. We can suggest adjustments to address new laws and regulations by reviewing returns. We can run projections to see how potential changes (e.g., filing status, dependents, the sale of a business, stock option exercises, etc.) may impact a client’s upcoming tax liability and model how potential changes may impact upcoming tax liabilities.

Get to Know Tamara Witham:

View Tamara’s profile page on Wealthtender or visit her website to learn more.

Q: For first-generation Americans and foreign-born individuals who are unsure whether or not they should hire a financial advisor at the current point in their lives, what guidance can you provide to help them make a more informed and educated decision?

Tamara: For first-generation Americans and foreign-born individuals who are navigating the complex financial landscape of a new country, hiring a knowledgeable financial advisor sooner rather than later can provide significant advantages. An advisor well-versed in cultural differences can offer tailored guidance aligned with each client’s values and goals, helping build a solid financial foundation through comprehensive planning for investment strategies, retirement, and risk mitigation.

Acting now is better than delaying until later if an individual has specific financial planning needs. The earlier he or she implements a plan, the more investments can potentially grow through compounding interest over time. An advisor can also identify and address risks like insufficient insurance coverage and excessive debt before these issues escalate. Setting clear financial goals from the start, whether for retirement, education funding, or a home purchase, increases one’s chances of success with a defined roadmap.

Working with an advisor can save thousands of dollars through optimized tax planning strategies and ensure a client claims eligible deductions and credits. As careers and family dynamics evolve, an advisor can help adapt a client’s plan to manage transitions like job changes, marriage, and having children – a proactive approach that protects long-term financial security.

Not all people need an ongoing relationship with a Certified Financial Planner. Some may already have a good grasp on managing finances and making decisions. While ongoing advisory services may not be necessary, everyone can benefit from at least an initial consultation. Most advisors, including our firm, offer complimentary meetings to assess if there is a good fit and explore how the advisor can provide value based on the individual’s circumstances. There is little downside to contacting an advisor for this initial consultation.

Ultimately, procrastinating on financial planning can harm those who need it. Starting sooner allows one to capitalize on wealth-building opportunities while avoiding costly mistakes. The earlier one works with an advisor, the better positioned they will be to achieve their financial objectives.

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