joe in USA

[jraf11]

My wife and I are retired and planning to spend a few years living in Italy. We're so excited but have a few questions before we commit:
1: Is our Social Security and Railroad Retirement benefits taxed by the Italian government?
2: Will our investments be taxed?
3: Do we need to purchase a medical/hospitalization plan in Italy? We currently have medicare plus a supplement.
Thanks to anyone who can help.

[Bevdeforges]

Originally Posted by jraf11

My wife and I are retired and planning to spend a few years living in Italy. We're so excited but have a few questions before we commit:
1: Is our Social Security and Railroad Retirement benefits taxed by the Italian government?
2: Will our investments be taxed?
3: Do we need to purchase a medical/hospitalization plan in Italy? We currently have medicare plus a supplement.
Thanks to anyone who can help.

Welcome to the forum.

1. There is a tax treaty (and a social security treaty) between the US and Italy which will avoid double taxation on your pension. I don't know the specifics of Italian taxation, so I can't tell you for sure how your US benefits will be taxed there.

2. This is the tricky one. You will be subject to US taxes on your worldwide income for the rest of your lives, no matter where you live. If your investments are all in the US, chances are you'll pay your taxes there on the investments and simply declare the income to the Italians. Again, the treaty is supposed to eliminate any double taxation.

3. Your medicare does you absolutely no good in Italy (or anywhere outside the US). You have to check on your medicare supplement policy as to what (if anything) it covers while you are outside the US. Generally, it's a requirement of your visa that you have a health insurance policy that covers you to the same extent as the local national health care program and that normally requires that you buy an expat policy (i.e. not a travel policy).

You may want to contact an organization called AARO AARO - Association of Americans Resident Overseas which deals with many of the relevant issues of Americans living overseas. They offer an expat health policy to members which is supposed to be quite reasonable. (AARO is based in Paris, however, so don't expect to hear back from them until after the 1st of September. We're in the midst of the summer vacation season right now.)

Another organization you might want to contact for information is ACA American Citizens Abroad They also provide information about Medicare and taxation for US citizens living overseas.
Cheers,
Bev

[jraf11]

Thank you, Bev. We will definitely follow up on your advice and utilize your suggestions.