A friend of a friend moved to Portugal last year. Had the apartment sorted, knew exactly which neighborhood he wanted, even learned a few phrases in Portuguese. Then about six weeks in, he ended up in an ER in Lisbon with a kidney stone and discovered his US health insurance didn’t cover a single cent of it. The bill was around $4,000. Could’ve been worse, honestly.
That story isn’t unusual. People pour energy into the lifestyle side of moving abroad and kind of just… forget the money stuff. Or assume it’ll work itself out. It won’t.
Assuming Domestic Health Insurance Travels With You
It doesn’t. Not really.
Medicare won’t pay for care outside the US in most cases. Employer plans vary, but the majority aren’t built for someone living overseas long-term. Even short-term travelers get caught off guard by this. The State Department’s guidance on travel insurance recommends buying dedicated coverage before any international trip, and for people actually relocating? It’s not optional. It’s the bare minimum.
Something like an IMG travel insurance plan covers medical emergencies and evacuations abroad, which is the kind of thing nobody thinks about until they’re the one being airlifted out of a rural clinic at 2am. But forget any specific plan for a second. The real mistake is not researching this at all. People just wing it. And then they’re shocked when a foreign hospital asks for payment upfront, in cash, before treatment even starts.
Side note, that upfront payment thing catches a lot of Americans off guard. In many countries, hospitals don’t bill insurance companies and wait. They bill you. Right there. At the front desk.
The Double Tax Problem Nobody Mentions
Americans abroad still owe US taxes. On worldwide income. Every year.
This genuinely surprises people. The US is one of only two countries on earth that taxes citizens based on citizenship rather than residency (Eritrea’s the other one, which… interesting company to keep). There are mechanisms to reduce the bite, like the Foreign Earned Income Exclusion, but those require filing specific forms. They don’t just happen automatically.
And then there’s the host country. Most places will consider someone a tax resident after about 183 days, sometimes sooner. So now there’s two countries expecting tax returns, two sets of rules, two sets of deadlines. Miss one and the penalties can be steep. Miss both and it gets really messy really fast.
Plenty of expats figure this out eventually. Usually after year one, when the panic sets in.
Bleeding Money on Currency Exchange
This one’s quieter. Less dramatic. But it adds up in a way that’s almost impressive.
Someone keeps their American bank account, uses their regular debit card abroad, and eats a 2-3% foreign transaction fee on every single purchase. Plus whatever markup the bank adds to the exchange rate. Over twelve months, that’s easily $1,000 or more for someone spending at a normal level.
Multi-currency accounts exist. Transfer services with much better rates exist. Cards designed specifically for overseas use exist. But setting all that up from a foreign country, with a foreign address, is harder than doing it before leaving. The window for easy financial housekeeping closes faster than people expect.
Leaving a Mortgage on Autopilot
Not everyone sells their home before moving abroad. Some rent it out, some let it sit empty, some have complicated family situations. Fair enough. But the mortgage doesn’t care about any of that.
Renting introduces landlord tax obligations, and not just domestically. Some host countries want to know about foreign rental income too. Leaving a property empty means paying for something nobody’s using, which is fine if the math works but a drain if it doesn’t. The financial side of choosing the right home loan gets complicated enough without adding international distance to the equation. With an ocean between the owner and the property, “I’ll deal with it later” tends to turn into a problem that compounds.
Underestimating What a Medical Emergency Actually Costs
Worth circling back to healthcare here because the numbers are genuinely wild.
Medical evacuation from a remote area? That can run past $100,000. The CDC’s Yellow Book chapter on travel insurance spells this out pretty plainly, and recommends sorting coverage out well before departure.
There’s a common assumption that because a country is “cheaper” overall, medical costs will be cheap too. Sometimes they are. But emergency surgery, specialist care, or anything involving transport to a better-equipped facility… those costs don’t follow the same curve as rent and groceries. A burst appendix in a country with affordable street food can still produce a bill that wrecks someone’s savings.
Nobody moves abroad planning to get hurt. Obviously. But the people who plan for it anyway are the ones who don’t come home broke.
Or at least, that seems to be how it works. Probably.
