U.S. Wealth Management for Americans Retiring Abroad

Can You Keep Your U.S. Investments and Financial Advisor When You Retire in Panama?

In many cases, Americans who retire in Panama can continue holding U.S. investment accounts and working with a U.S.-based financial advisor. The details depend on the financial institution, account type, investment holdings, residency, and applicable regulatory requirements.

I'm Gabriel Motta, CFP®, MBA, AWMA™, founder of Inclinevest Wealth Management. I'm a bilingual, English- and Spanish-speaking financial advisor based in Colorado, serving eligible clients nationwide through virtual meetings. My work focuses on investment management and financial planning for professionals, executives, and retirees.

For Americans moving to Panama, maintaining access to U.S. investment accounts is one consideration among several. Brokerage firms and custodians have different policies for customers who establish residency outside the United States. Schwab offers international account capabilities for eligible Americans living abroad.

Inclinevest uses Charles Schwab as custodian for eligible advisory accounts. Depending on the circumstances, an existing Schwab account may be eligible for ongoing management, or investments held elsewhere may be eligible for transfer.

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How Does Retirement Change the Way You Manage Investments?

Many Americans manage their own investments throughout their working years. They contribute to workplace retirement plans, open brokerage accounts, select mutual funds or ETFs, and monitor their portfolios. For people who are comfortable with investing and have relatively straightforward finances, managing their own accounts can be a reasonable approach.

Retirement changes the decisions involved. Instead of primarily accumulating assets, you need to consider how those assets will support spending over an uncertain period. You may have several accounts with different tax treatments, changing income needs, and a retirement horizon that could span several decades.

Moving abroad introduces additional considerations. You may need to coordinate U.S. investment accounts, retirement distributions, banking, currency needs, tax reporting, and your new living arrangements.

Some retirees continue to manage these responsibilities themselves. Others prefer to delegate investment management and financial planning to an adviser. The decision depends on your experience, the complexity of your finances, the time you want to spend managing investments, and the level of professional assistance you prefer.

What does ongoing investment management typically involve?

These responsibilities remain relevant after moving to Panama. Whether you handle them yourself or work with an adviser, it is important to understand how your investments, income, and financial obligations fit together.

What Is a Fee-Only Fiduciary Financial Advisor?

Some retirees are reluctant to hire a financial advisor because they associate financial advice with sales commissions, expensive investment products, or pressure to purchase insurance and annuities. Others have managed their own accounts for years and are unsure what an adviser would provide beyond investment selection.

Those concerns make it important to understand how an adviser is compensated and what legal obligations apply to the relationship.

Inclinevest is a fee-only fiduciary registered investment adviser. The firm receives compensation from clients for its advisory services. It does not earn commissions from selling investment products, insurance, annuities, or other financial products, and it does not accept third-party product compensation.

What does fee-only mean?

Fee-only means the adviser is compensated by clients rather than receiving commissions from product sales. The compensation structure is different from that of a financial salesperson who may receive commissions for recommending particular investments or insurance products.

Fee-only compensation does not eliminate every potential conflict of interest. For example, an asset-based advisory fee means the amount paid generally increases with the value of the assets managed. Clients should understand how an adviser is paid, what services are included, and what conflicts are disclosed in the firm's documents.

What does fiduciary mean?

A fiduciary investment adviser has a legal obligation to act in the client's best interest within the scope of the advisory relationship and to address relevant conflicts of interest. The advisory agreement and disclosure documents explain the services, responsibilities, compensation, and conflicts associated with the relationship.

Do you retain ownership of your investments?

Working with an investment adviser does not mean giving up ownership of your retirement savings. With an arrangement such as the one used by Inclinevest, eligible advisory accounts remain in the client's name at the custodian. The client retains access to account information, balances, holdings, and statements.

Under the authority granted in the advisory agreement, the adviser can manage eligible investments on the client's behalf. The custodian holds the assets and provides account administration and reporting. The specific authority granted depends on the agreement and account arrangements.

How is investment management different from financial planning?

Investment management focuses on the portfolio itself, including asset allocation, investment selection, monitoring, and rebalancing. Financial planning considers how the portfolio fits into the household's broader financial circumstances.

For example, a retiree may have a traditional IRA, a Roth IRA, a taxable brokerage account, and cash held at a bank. Each account has different tax characteristics and may serve a different purpose. The timing and source of withdrawals can affect taxes and the way the overall portfolio is managed.

An ongoing advisory relationship can coordinate these decisions. The extent of planning provided varies by adviser, so it is important to review the actual services included in the engagement.

Can an adviser help during market declines?

Market declines can be difficult for retirees who are withdrawing money from their investments. Selling assets during a downturn, changing an investment strategy out of fear, or holding more cash than intended can affect a long-term retirement plan.

An adviser can help evaluate portfolio withdrawals, available cash, asset allocation, and the assumptions behind the financial plan. No adviser can eliminate market risk or guarantee investment performance. The value of ongoing advice is partly in having a defined process for evaluating decisions during changing market conditions.

For more information about the firm's compensation structure, see Why Fee-Only.

Already Have a Charles Schwab Account?

If you already have an eligible account at Charles Schwab, you may not need to change custodians to establish an advisory relationship. Depending on the account type, holdings, and residency requirements, an existing Schwab account may be eligible for management by an independent investment adviser.

Inclinevest Wealth Management uses Charles Schwab as custodian for eligible advisory accounts. We can review an existing Schwab account and determine whether it can be managed under an advisory agreement, subject to account approval and applicable requirements.

This may be relevant if you currently manage your own Schwab investments and are considering professional portfolio management. Rather than opening an account at an entirely different institution, you may be able to retain eligible assets at Schwab while delegating investment management to an adviser.

What does an adviser review before managing an existing account?

• Account registrations and ownership.
• Current investments, holdings, and any concentrated positions.
• Retirement income needs and expected withdrawals.
• Investment objectives, time horizon, and risk tolerance.
• Account eligibility and any restrictions related to foreign residency.
• Advisory fees, services, and the authority granted under the agreement.

You continue to hold your assets at Schwab. Inclinevest provides the investment management and financial planning services described in the advisory agreement. Schwab serves as custodian and is not affiliated with, or an endorser of, Inclinevest.

Additional information is available on the Inclinevest services and fees page.

Have Investments at Fidelity, Vanguard, or Another U.S. Custodian?

You may have options beyond remaining with your current financial institution. U.S. brokerage firms and custodians have different policies for customers who become residents of another country. Depending on the institution and country, some may limit new purchases, restrict certain account services, or require customers to move particular assets elsewhere.

An account that worked normally while you lived in Colorado, California, or another U.S. state may be subject to different restrictions after you establish residency in Panama. It is important to ask your current institution about its specific policies before relocating.

Schwab offers international account capabilities for eligible U.S. citizens living abroad. This may make it an option for Americans who want to maintain access to U.S. investment accounts while residing in Panama.

Can you transfer investments to Schwab without selling them?

Often, yes. An eligible brokerage account can frequently be transferred in kind, meaning the investments move from one custodian to another without being sold as part of the transfer. A properly completed in-kind transfer generally does not create a capital gains tax event simply because the custodian changes.

This is different from liquidating a portfolio and transferring the cash proceeds. Eligible stocks, ETFs, mutual funds, and other securities may be able to move directly to the receiving institution.

However, not every investment or account can be transferred in kind. Certain proprietary funds, unsupported securities, fractional shares, annuities, employer plans, and other holdings may require different treatment. Some assets may need to be sold or handled separately. Selling appreciated investments can create taxable gains, and retirement account distributions have their own tax rules.

How can Inclinevest help with a transfer?

If your investments are held at another U.S. brokerage firm, Inclinevest can review your existing accounts and discuss whether Schwab custody may be appropriate. If you decide to establish an advisory relationship, the firm can help coordinate transfers of eligible assets, subject to Schwab's requirements and the policies of your current institution.

The process generally involves reviewing recent statements, identifying transferable holdings, confirming account registrations, and determining what paperwork and account setup are required. Some accounts or investments may not be eligible, and the transfer process can vary by institution.

Why Consider Schwab as a Custodian When Living in Panama?

Maintaining access to U.S. investment markets and financial services is an important consideration when retiring overseas. Schwab offers international account options for eligible U.S. investors, including access to a range of U.S. investments.

Depending on account eligibility and the applicable terms, Schwab's international brokerage account offers access to U.S. stocks, options, ETFs, and bonds. Schwab also offers banking features through eligible accounts, including a Visa debit card and reimbursement of ATM fees worldwide under the applicable account terms.

These services may be useful for Americans who want to maintain U.S. investment accounts while spending retirement abroad. Account availability, features, fees, and eligibility should be confirmed directly with Schwab before opening or transferring an account.

For Inclinevest advisory clients, Schwab serves as the custodian while Inclinevest provides investment management and financial planning. Custody and investment advice are separate functions: Schwab holds eligible assets, while Inclinevest manages the portfolio under the advisory agreement.

What If You Have Always Managed Your Own Investments?

Many retirees have accumulated $1 million, $2 million, $3 million, or more through years of saving and investing without ever hiring an investment adviser. Some prefer to continue managing their own accounts. Others reach a point when they would rather delegate portfolio management or have professional assistance coordinating their financial decisions.

There is no requirement to hire an adviser simply because you retire or move overseas. The decision depends on the services you need, your comfort managing investments, the complexity of your financial situation, and the cost of professional advice.

What should you evaluate before hiring an adviser?

An advisory relationship should begin with a review of your circumstances, goals, investment accounts, income needs, and financial concerns. Before signing an agreement, you should understand:

• Which investment management and financial planning services are included.
• How the adviser is compensated and how fees are calculated.
• Whether the adviser acts as a fiduciary.
• Which custodian will hold your assets.
• What authority you are granting the adviser over your accounts.
• Whether the adviser can serve you after you establish residency abroad.
• How the relationship can be changed or terminated.

Inclinevest's primary advisory relationship combines investment management with ongoing financial planning. The firm is fee-only and acts as a fiduciary within the scope of its advisory relationship. Its typical client household has $1 million or more in investable assets. This describes the firm's general client profile, not a guarantee of acceptance.

How much does a financial advisor cost?

Fee-only investment advisers commonly charge an advisory fee based on the assets they manage. The fee should be clearly disclosed before you enter into an advisory relationship.

Inclinevest's advisory fee schedule is based on assets under management, with rates that generally decrease as managed assets increase. The applicable fee depends on the amount managed and the terms of the advisory agreement. The firm's services and fees page provides additional information.

When comparing advisory fees, consider the actual services included. These may include portfolio management, retirement income planning, financial planning, ongoing reviews, and coordination of investment decisions. Also consider other costs, such as underlying fund expenses, transaction costs, and account fees, where applicable.

What Happens to U.S. Retirement Accounts When You Move to Panama?

Moving abroad does not automatically mean you need to close U.S. retirement and brokerage accounts. Many Americans continue to hold U.S. financial assets after relocating. The options available depend on the account type, the financial institution's policies, and your personal circumstances.

Can you keep your IRA when you move to Panama?

Moving to Panama does not automatically require you to close a traditional IRA or Roth IRA. U.S. citizens generally remain subject to U.S. tax rules on worldwide income, and retirement accounts continue to be governed by their applicable U.S. tax rules.

However, the financial institution's residency policies, account eligibility, and the type of retirement account matter. Confirm whether your existing custodian will continue to service your account after you become a resident of Panama.

Can you keep your 401(k)?

Moving overseas does not automatically require you to withdraw or roll over a former employer's 401(k). Your options depend on the plan's rules, your employment status, your age, and the distribution and rollover provisions available to you.

Before making a rollover or withdrawal decision, consider the tax consequences, investment options, fees, creditor protections, and other features of the existing plan. A rollover is not automatically the best choice for every retiree.

Should you move your investments to a Panamanian bank or brokerage firm?

Not necessarily. Some retirees may have reasons to maintain local banking relationships in Panama for everyday expenses, local transfers, or other needs. That does not mean they need to move their entire investment portfolio out of the United States.

Maintaining eligible U.S. investment accounts can provide continuity and access to U.S. securities markets. The appropriate arrangement depends on your financial needs, tax circumstances, account eligibility, and the services available to you in both countries.

U.S. Taxes Still Matter When You Retire in Panama

U.S. citizens generally remain subject to U.S. federal income tax on worldwide income even when they live abroad. Moving to Panama does not, by itself, end U.S. tax filing obligations.

Investment income, retirement account distributions, capital gains, and other income may have U.S. tax consequences. Depending on your circumstances, foreign tax considerations and reporting requirements may also apply.

It is important to distinguish between transferring an account and selling an investment. A properly executed in-kind transfer generally does not create a taxable sale simply because the assets move between custodians. Selling appreciated securities, taking retirement distributions, or making other transactions may create tax consequences.

Inclinevest can incorporate tax-aware considerations into investment management and financial planning. The firm does not replace a qualified tax professional or provide legal advice. Americans living abroad should work with a tax professional familiar with U.S. international tax matters.