For many Americans, the dream of moving to Spain is easy to understand—sip coffee while reading the morning newspaper in a sunny plaza, long lunches in the afternoon, and a lifestyle that moves at a friendlier pace. But behind the romance of Mediterranean living lies financial realities that few people fully anticipate.
As Peter Dougherty, a financial planner at BISSAN Wealth Management, explains: “Managing your finances as an American in Spain sometimes feels like trying to play golf and basketball at the same time. You’ve studied the terrain and carefully lined up your putt as someone shouts for a fast break and you need to react quickly as they dribble right past you.”
For Americans in Spain, financial life can feel like this — their carefully planned long-term investments and strategies from one system must quickly be adapted to new rules in another. They need to navigate two distinct financial systems that operate in parallel. On one side is the United States, which taxes its citizens regardless of where they live. On the other is Spain, which taxes them on their worldwide income once they live here long enough to become tax residents.
To aid these expats in Spain, Peter has extensive knowledge on both sides of the Atlantic: in the U.S., he is a Certified Financial Planner® professional, a Chartered Retirement Planning Counselor®, and earned an MBA in finance. In Spain, he was awarded the European Financial Planner certification by the Financial Planning Association of Spain (EFPA España) and holds an MS in Spanish taxation (Máster en fiscalidad y tributación) from Universidad Nebrija.
As Peter says, “Navigating these overlapping systems requires thoughtful planning that incorporates the interrelated topics of taxes, investments, and retirement accounts. Americans abroad must continue filing U.S. tax returns every year regardless of where they live. This means that investment planning becomes more complicated after relocating. Spain’s tax system treats certain investments differently than the United States, and many common U.S. investment vehicles can become inefficient or difficult to manage once abroad. This in turn affects retirement planning: U.S. retirement accounts such as 401(k)s and IRAs generally remain intact when moving abroad, but their tax treatment in Spain can vary depending on how withdrawals are structured. Spain may tax distributions differently than the United States, potentially reducing the tax efficiency of retirement savings.”
“Our approach to financial planning at BISSAN Wealth Management reflects this complexity. First, we learn about our client’s financial goals, what they'd like to accomplish. It might be travel, financing the education of children or grandchildren, buying a (second) home, etc. We then quantify these goals in our optimisation model to determine expected future cash outflows and park the moneys that will be necessary for these expenses in compliant short-term investments. Only after we understand a client’s circumstances and have created a financial plan for them do we start to advise them on specific tax-aware investments.”
Living in Spain as an American often means learning to play two financial games at once. The rules are different, the pace is different, and the equipment hardly seems compatible. The challenge can feel awkward at first, like switching between basketball sneakers and golf spikes in the same match. But with time, practice, and a bit of strategy, Americans living in Spain can learn to play both games well—and enjoy the rewards that come with mastering a very unusual course.
BISSAN Wealth Management is authorised and supervised by the National Securities Market Commission (Comisión Nacional del Mercado de Valores), the Spanish government agency responsible for the financial regulation of the securities markets in Spain. BISSAN has offices in Barcelona and Bilbao.
For more information: https://www.financial-planning-in-spain.com