My sister is a US citizen, living and working in a foreign country for a non-profit, under a diplomat visa.
She pays no US income taxes and no income tax in the country she lives (Mexico).
Currently her employer contributes 15% of her salary to a 403b with Vanguard, invested in their target retirement 2050 fund. She contributes an additional 7ish% of her salary.
I just helped her set up a Roth with vanguard, and she fully funded it for 2014, and will do a monthly payroll deduction to fully fund it going forward. This is obviously her best savings vehicle as shears no tax now, and no tax later.
My main question is about the 403b. She will probably spend some of her retirement in Mexico or another south or Central American country. Then as she gets more towards elderly she will likely come back to the US. Of course she is only 28 now, so things could change wildly.
So, should she up her 403b contribution, where she is investing tax free money, but will have to pay income taxes on it if she takes he income in the US? Or should she put it in a brokerage account, and possibly have to pay Mexican income tax now, but never have to pay US income tax? Or is it a total crapshoot since it depends heavily in where she lives during retirement?
And another variable might be whether she would have to pay Mexican Capitol gains tax, or US Capitol gains, or neither, on a brokerage account. She doesn't know, and a quick google was not helpful. Does anyone have a clue where to even look for this information?
