From EU to US

[C89]

Longtime lurker recently moved from Europe to Texas last September. My Wife quickly followed in December and just started working! Due to our changes I have a few questions that I hope I get some help with in order to plan our future.

Specific Question(s):
-   Am I entitled to social security after retirement age assuming I will leave the US?
-   My 401K is close to being maxed out for the year. Should I put my savings in a Vanguard fund or should I open an after-tax account as well? How would you split the two? The first focus will be a down payment on a house (both 10k remaining)
-   What Index fund?  Individual account at vanguard?
-   I still have my old apartment as a back up. Is the rent on my property in EU Taxable under my worldwide income?

Looking forward to your advice and thoughts

[SwordGuy]

-   Am I entitled to social security after retirement age assuming I will leave the US?
If you pay enough and long enough, you should be.   There are specific rules for it and it takes a number of years to qualify.   ssa.gov has the rules.

-   My 401K is close to being maxed out for the year. Should I put my savings in a Vanguard fund or should I open an after-tax account as well? How would you split the two? The first focus will be a down payment on a house (both 10k remaining)

Vanguard is a company that provides funds to buy.  A 401K is a kind of account with specific tax breaks and rules to access it.   They are two totally different things.   You've got some real jumbling going on in your thinking on this.   You can buy Vanguard funds and put them in 401K or you can put them in after tax account instead.   Or both. 

-   What Index fund?  Individual account at vanguard?
Google "JL Collins Stock Series".   A really good explanation of all this and also discusses the specific answer to your question.

-   I still have my old apartment as a back up. Is the rent on my property in EU Taxable under my worldwide income?
If you or your wife are US citizens, yes.  Otherwise, probably not.   The answer will be specific to your home countries and the US and the deals they made with each other.    Have no idea whether you have to pay taxes on US income to your home countries.

[BicycleB]

-   Am I entitled to social security after retirement age assuming I will leave the US?
If you pay enough and long enough, you should be.   There are specific rules for it and it takes a number of years to qualify.   ssa.gov has the rules.

-   My 401K is close to being maxed out for the year. Should I put my savings in a Vanguard fund or should I open an after-tax account as well? How would you split the two? The first focus will be a down payment on a house (both 10k remaining)

Vanguard is a company that provides funds to buy.  A 401K is a kind of account with specific tax breaks and rules to access it.   They are two totally different things.   You've got some real jumbling going on in your thinking on this.   You can buy Vanguard funds and put them in 401K or you can put them in after tax account instead.   Or both. 

-   What Index fund?  Individual account at vanguard?
Google "JL Collins Stock Series".   A really good explanation of all this and also discusses the specific answer to your question.

-   I still have my old apartment as a back up. Is the rent on my property in EU Taxable under my worldwide income?
If you or your wife are US citizens, yes.  Otherwise, probably not.   The answer will be specific to your home countries and the US and the deals they made with each other.    Have no idea whether you have to pay taxes on US income to your home countries.

For these, Google "tax treaty name_of_country". For example, "tax treaty Britain" yielded https://www.irs.gov/pub/irs-trty/uk.pdf, a publication by the US Internal Revenue Service (the relevant tax authority in USA) discussing America's tax treaty with the United Kingdom.

[daverobev]

You have to look at the local tax laws. "EU" is no good - every country is very very different in terms of what they tax and what they allow.

For example - for the UK, you need to hold *UK reporting* ETFs else dividends and capital gains will be treated as regular income. In France, you will pay 'social charges' on dividends and capital gains (tax-which-isn't-tax). Some tax shelters may not be seen as tax shelters. And so on.

[Bernard]

Am I entitled to social security after retirement age assuming I will leave the US?

You are eligible for SS benefits once you have paid at least 40 quarters (10 years full time of work) into the system. That applies to you regardless of immigration or citizenship status.

Only US citizens can collect SS benefits abroad (with the sole exception of Canadians). LPRs (Green Card holders) have to reside in the US permanently, otherwise they would lose their immigration status and couldn't collect.

My 401K is close to being maxed out for the year. Should I put my savings in a Vanguard fund or should I open an after-tax account as well? How would you split the two?

Depends on your income. Generally speaking, I would go full out on an IRA as well. If your tax burden is high, that would be a traditional IRA. If your tax burden is low, go for a Roth IRA. Keep in mind that you can access your 401K for a home purchase, penalty free.

[reeshau]

Am I entitled to social security after retirement age assuming I will leave the US?

You are eligible for SS benefits once you have paid at least 40 quarters (10 years full time of work) into the system. That applies to you regardless of immigration or citizenship status.

Only US citizens can collect SS benefits abroad (with the sole exception of Canadians). LPRs (Green Card holders) have to reside in the US permanently, otherwise they would lose their immigration status and couldn't collect.

Even if you don't qualify, you may be able to get some benefit from your US Social Security contributions at home.  As @BicycleB says, you need to refer to the specific tax treaty.

In the event you do get public pension benefits from both countries, Social Security may reduce your US benefits through the Windfall Elimination Provision.