Expat Community > Italy

katieburg
Joined 2018
Posts: 4

Advice about Investing in IRA while in Italy

6 years ago

I am a 36 year-old American expat, married to an Italian, and have lived in Italy for a few years so far. There is a good chance that my husband and I will retire here. Does anyone have any recommendations about continuing to invest in IRAs while living here? I invested in a ROTH IRA while living in the US, but to my dismay have learned that the distributions will be taxed by Italy. While no longer eligible to invest in a ROTH IRA, I could contribute to a TRADITIONAL IRA, but am wondering if it even makes sense if we retire in Italy. Any thoughts/experiences? I guess the tricky part of this equation is that the current tax laws could all change by the time I retire, so it is hard to predict how to invest for retirement.

My main dilemma is whether or not I will do better to invest in an IRA or a retail account. The IRA doesn’t seem too appealing if at the end of the day I have to pay at least a 23% income tax on the entire amount of the distributions (and the mandatory IRA withdrawals might involuntarily put me into a higher tax category). I am not an expert, but that seems to create a higher tax burden than paying the yearly 26% on capital gains and dividends from retail accounts. Am I missing something?

Also, does anyone have any information about the tax credit on pension income? From what I have been able to find online, it seems that pensioners in Italy can make up to around 7500 euros/year without being taxed. The question is, would distributions/withdrawals from IRA accounts count as normal pension income and be eligible for this credit? It is unclear to me as it appears that the pension must be received over a full year, 365 days. Would that rule out an IRA distribution as it might only happen once a year?

Any information or advice would be GREATLY appreciated! Thank you!!!!

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SJB Global

SJB Global is a top-rated financial advisory firm specializing in expat financial advice worldwide, offering retirement planning & tax-efficient solutions with a regressive fee model.
Learn More

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SJB Global

SJB Global is a top-rated financial advisory firm specializing in expat financial advice worldwide, offering retirement planning & tax-efficient solutions with a regressive fee model.
Learn More

SJB Global

SJB Global is a top-rated financial advisory firm specializing in expat financial advice worldwide, offering retirement planning & tax-efficient solutions with a regressive fee model.
Learn More

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Advice about Investing in IRA while in Italy

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