Nino Trentinella has been living in Tbilisi, Georgia for two years. She employs a maid and a cook, takes a taxi almost every day, and regularly dines out. This lifestyle would likely be out of reach for her back home in Baltimore on her five-figure salary, as reported by The New York Times.
Since 2020 and the Covid-19 pandemic, digital nomadism has become more popular among young Americans. Approximately 5.5 million of them are said to be living abroad, according to the Association of Americans Residents Overseas (AARO). They are attracted by a more affordable lifestyle, with returning to the United States now seeming too expensive.
Furthermore, those earning less than $130,000 per year abroad are exempt from U.S. taxes, and many countries offer a very favorable tax regime for digital nomads. In Tbilisi, for example, Nino Trentinella is only taxed 1% of her income.
Corey O’Flanagan, a video editor from Denver, has managed to save money by using what is known as “geographic arbitrage.” He works remotely for American or Australian companies while living in countries where the cost of living is very low.
In Kuala Lumpur, Malaysia, he and his wife were able to get a complete health checkup for $400 each – in the U.S., they would have had to pay thousands of dollars. “The American healthcare system really scares both of us,” says Corey O’Flanagan. “My wife, who is British, is very concerned about this.”
Another concern for American digital nomads is their retirement. Corey O’Flanagan doubts he will have enough to retire in the U.S., even though he has managed to build up some savings. Many nomads make fatal mistakes when it comes to retirement planning, explains financial analyst Peter Sengelmann, specializing in expatriate issues. For example, contributing to a U.S. retirement account, when they must pay taxes to the U.S. to be eligible.
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Context: The article discusses the rise in digital nomadism among Americans living abroad, citing cost-saving incentives and lifestyle benefits. It also highlights the financial considerations and potential pitfalls such nomads may face, such as retirement planning.
Fact Check: The article mentions the popularity of digital nomadism among young Americans and the tax advantages they can have while living abroad. It also raises valid concerns about retirement planning and potential mistakes digital nomads may make in this regard.
