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MONEY

Americans in France: What you need to know about your pension

The food. The weather. The wine. The lifestyle. France has plenty to offer retirees - but ensuring you make the most of your hard-earned pension will make your new life in l’hexagone even better.

A couple sitting on chairs beneath a tree, silhouetted by the setting sun

Lots of Americans retire to France, and there are generous bilateral agreements in place that make matters relatively straightforward.

First things first; US citizens can bring any type of US-based pension to France – although you’ll have to inform the US tax authorities that you’ll be paying French income tax on it.

You can move either before or after your pension starts to pay out and it doesn’t affect your payments.

US citizens coming to retire in France still have to file a US tax return every year, as well as a French one. Dual taxation agreements mean that you won’t pay tax twice on the same income, but you do have to complete two sets of tax declarations.

You can only forego US income tax responsibilities if you renounce your US citizenship – a process that is lengthy and expensive.

Tom Goold, founder of international financial advisers Valiant Wealth, said: “Generally, France is an attractive retirement destination for US expats with one of the best double taxation agreements and favourable views on US retirement accounts such as IRA 401(k)s and the like.

“If you pay state income tax in the US then this is eliminated in France. One negative could the higher estate taxes in France but there are certain structures that help navigate this issue.

“If this is a concern then you should work with an appropriately qualified advisor who has US experience and regulation.”

For further information, log on to the IRS website for advice and information on exclusions and deductions.

Tax matters

You should inform tax authorities in the USA that you’re moving to France. 

Pensioners are treated favourably here, with a 10 percent reduction factored in on income up to €36,600. You also pay tax as a household so you probably end up paying less tax than you might elsewhere.

If you own property in France expect to pay property taxes in addition to taxes on your income.

Once you have been living in France for three months you are entitled to register within the health system and if you become ill, incapacitated or need extra care as you get older, France has a generous social security system

Americans in France: What’s the deal with health insurance?

Currency matters

Be aware that currency fluctuations will mean that the amount that finally makes it into your bank account will change from month to month.

Other challenges

There’s a piece of US legislation known as FATCA that means all Americans in France, not just pensioners, may struggle to open a bank account – here’s some tips on how to get round this.

READ ALSO What are the biggest challenges for Americans in France?

In all cases, it is best to obtain independent advice that’s appropriate to your personal situation, from a financial expert.

Member comments

  1. “ If you pay state income tax in the US then this is eliminated in France. ”

    This is not true. You remain domiciled in your state until you are domiciled in another state. Domicile is not the same as “living in”. Most, if not all states, will require you technically to continue to pay state income tax if you are domiciled in the state even if you are not living in the state.

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TRAVEL NEWS

Covid rules: Travelling abroad from France this summer

There's been plenty written on travel rules for people coming to France - but what if you live in France and have plans for international travel over the coming months? We've got you covered.

Covid rules: Travelling abroad from France this summer

France isn’t currently on the Covid red list for any country, so there is nowhere that is barred to you as a French resident, but different countries still have different entry requirements.

EU/Schengen zone

If you’re travelling to a country that is within the EU or Schengen zone then it’s pretty straightforward.

If you’re fully vaccinated then all you need is proof of vaccination at the border – no need for Covid tests or extra paperwork. Bear in mind, however, that if your second dose was more than nine months ago you will need a booster shot in order to still be considered ‘fully vaccinated’. 

READ ALSO Everything you need to know about travel to France from within the EU

If you were vaccinated in France then you will have a QR code compatible with all EU/Schengen border systems. If you were vaccinated elsewhere, however, your home country’s vaccination certificate will still be accepted.

If you’re not fully vaccinated you will need to show a negative Covid test at the border, check the individual country for requirements on how recent the test needs to be.

Bear in mind also that several EU countries still have mask/health pass rules in place and some countries specify the type of mask required, for example an FFP2 mask rather than the surgical mask more common in France. Check the rules of the country that you are travelling to in advance.

If you’re travelling to a country covered by The Local, you can find all the latest Covid rules in English on the homepages for Austria, Denmark, Germany, Italy, Norway, Spain, Sweden or Switzerland.

UK

The UK has no Covid-related travel rules, so there is no requirement for tests even if you are not vaccinated. The passenger locator form has also been scrapped – full details HERE.

Once there, there are no Covid-related health rules in place. 

If you’re travelling between France and the UK, remember the extra restrictions in place since Brexit.

USA 

Unlike the EU, the USA still has a testing requirement in place, vaccinated or not. You would need to show this prior to departure.

It has, however, lifted the restrictions on non citizens entering, so travel to the USA for tourism and visiting friends/family is once again possible.

For full details on the rules, click HERE.

Once there, most places have lifted Covid-related rules such as mask requirements, but health rules are decided by each State, rather than on a national level, so check in advance with the area you are visiting.

Other non-EU countries

Most non-EU countries have also lifted the majority of their Covid related rules, but in certain countries restrictions remain, such as in New Zealand which is reopening its border in stages and at present only accepts certain groups.

Other countries also have domestic Covid restrictions in place, particularly in China which has recently imposed a strict local lockdown after a spike in cases.

Returning to France

Once your trip is completed you will need to re-enter France and the border rules are the same whether you live here or not.

If you’re fully vaccinated you simply need to show your vaccination certificate (plus obviously passport and residency card/visa if applicable) at the border.

If you’re not vaccinated you will need to get a Covid test before you return and present the negative result at the border – the test must be either a PCR test taken within the previous 72 hours or an antigen test taken within the previous 48 hours. Home-test kits are not accepted.

If you’re returning from an ‘orange list’ country and you’re not vaccinated you will need to provide proof of your ‘essential reasons’ to travel – simply being a resident is classed as an essential reason, so you can show your carte de séjour residency card, visa or EU passport at the border.

Even if the country that you are in is reclassified as red or orange while you are away, you will still be allowed back if you are a French resident. If you’re not a French passport-holder, it’s a good idea to take with you proof of your residency in France, just in case.

Fully vaccinated

France counts as ‘fully vaccinated’ those who:

  • Are vaccinated with an EMA-approved vaccine (Pfizer, Moderna, AstraZeneca or Johnson & Johnson)
  • Are 7 days after their final dose, or 28 days in the case of the single-dose Johnson & Johnson vaccines
  • Have had a booster shot if more than 9 months has passed since the final dose of your vaccine. If you have had a booster shot there is no need for a second one, even if more than 9 months has passed since your booster
  • Mixed dose vaccines (eg one Pfizer and one Moderna) are accepted 
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