Whether or not you lower your US income tax

Whether or not you lower your US income tax liabilities if you retire or work abroad really depends on your personal situation and where you choose to retire.

 

If you are paying taxes locally you can use the Foreign Tax Credit to get a dollar for dollar tax credit on your US taxes.  If you are in a zero tax country you can use the Foreign Earned Income Exclusion to exclude the first US $100,800 (tax year 2015) of your income from US taxes.  This can really help lower your tax liability.

 

(Resort near Santa Maria Beach, Nicaragua,pictured.)