Tips & Tricks: RAFT Your Goodbyes

It’s nearly summer and that means we expats are entering into the period of transition as we say goodbye to old friends, perhaps leave ourselves, and open our hearts to the possibility of new friends. Whether you’re staying or leaving, it’s important to know how to navigate a season of goodbyes—and even more important to help your kids process a time of transition an change.

So this week’s tip from The Prepared Expat is: RAFT your goodbyes.

Read more: Tips & Tricks: RAFT Your Goodbyes

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The acronym RAFT comes from the excellent and highly recommended book Third Culture Kids by David Pollock and Ruth Van Reken. It stands for 4 things crucial for a good goodbye: (1) Reconciliation, (2) Affirmation, (3) Farewell, (4) Think future.

BTW, if you have kids and haven’t yet read Third Culture Kids, you definitely need to. It’s jam-packed full of wisdom and advice from the authors own experience as growing up around the world. It’s a great resource.

How to RAFT a goodbye

One of the biggest challenges and downsides to life as an expat is that you live a life constantly in transition; your family is usually far away and it seems expat communities are constantly revolving doors of hellos and goodbyes. Even if you’re the rare expat who spends 20 years of their life in a single city, surrounding you will be many friends who come into your life for a season…and then leave. Knowing how to deal with those transitions and goodbyes is crucial for maintaining your emotional and mental health.

This is even more important for children who lack a broader perspective of life and time and who may not realize that the world (and their life) isn’t ending just when they or a friend moves away. RAFTing a goodby helps kids to process what is occurring, enabling them to have a good goodbye that leaves them emotionally healthy and regret-free. There are four parts to a good goodbye:

Part 1: Reconciliation

Inevitably, as we live our life, we will have conflict with other people; it is critical to deal with any broken relationships before either party of the conflict leaves. If you don’t take time to reconcile a relationship before you or the other person leaves, you may never get another chance to see them or resolve a conflict, which can create ongoing, festering emotional baggage for you or your child. Instead, take the time to meet with the person and seek to reconcile the relationship. If necessary, involve a third party (or, in the case of your children, be the third party) so that you can fully move on without regretting what you leave behind.

One of my professors was engaged to a girl in college and, right before graduating, suddenly broke it off; they were both too hurt and scared to talk and both moved on after graduation. It wasn’t until 20 years later, at a reunion, that he was finally able to tell the girl why he had broken off their engagement; he said it was one of his biggest regrets in life—and she was hurt greatly by it asa well. Don’t do that. Take the courage to address issues before you leave and make them nearly impossible to resolve; you don’t have to become best friends with someone with whom you’ve had conflict, but don’t leave without at least trying to repair a broken relationship. You may never get another chance.

Note: This is especially important if the person with whom you’ve had conflict is a family member. Life isn’t guaranteed and some of the saddest stories I’ve ever heard are when a loved one passes away and the expat never gets a chance to make right a broken relationship. Make sure that’s not you. Reconcile any relationships before you or they leave.

Part 2: Affirmation

Making sure there are no active conflicts in a relationship is a crucial first step, but it’s not enough for an emotionally healthy good goodbye. Instead, take it a step further to specifically think of and express to others things that you appreciate about them. Affirm them in the good they’ve done in your life and appreciate who they are and what they’ve meant to you.

You’ll find that making specific affirmations of others helps bring “closure” to a relationship; even though the relationship may continue on, it helps you emotionally “release” the relationship to become what it will become at a distance, rather than feeling that you need to force it to be something that can’t be sustained over distance.

This last year I said goodbye to two good friends; in the first, he and I both met and affirmed each other, expressing specific appreciation for things that we appreciated about each other and the relationship. As the second friend left, I thought we were going to have a time of affirmation, but I wasn’t intentional to make it happen and, in the end, lots was left unsaid as he departed. I regret that. Make sure you and your kids don’t end up with regrets of what wasn’t said.

Keep in mind that how you offer affirmation will differ from culture to culture; you may look the person in the eye and say it directly, you may write it down in a card, you may express it with a gift, you may express it indirectly through a third party. Regardless of the culture, find a way to express appreciation for what the relationship has meant to you.

Part 3: Farewell

This might sound funny, but amidst all the hustle and bustle of leaving internationally, it’s easy to actually forget to say goodbye to the piece, places, and things that have made something special to you. This intentional act to say goodbye produces “closure” for your heart and is crucial for your ability to move on without regrets.

When I last left the US, my Grandpa was 87 years old; since I didn’t know when I would see him again on this earth, I intentionally said my “goodbye” to him and told him how I love him. Though it was a bit awkward—he wasn’t on his deathbed or near it—I’m glad I did because, just a few years later he passed away unexpectedly. That was my last moment with him and I’m thankful I didn’t just get into the car with an awkward “Next time!” Saying farewell to him made it easier to grieve when he did leave us; I got to say goodbye. Make sure you do the same with those you love.

And remember to grieve; each goodbye is a kind of little death and, if you don’t allow yourself to feel the hurt and pain, you’ll have a festering emotional wound that keeps you from being healthy and facing the future without regrets. You don’t always get the time to grieve in the busyness of packing, but you can keep a list of things that strike your heart so that you can process them later.

Children, in particular, need to say goodbye to things and places in addition to people. When they leave their room for the last time or the bed they’ve always slept in, their minds and hearts need the closure of saying “goodbye” so that their hearts are open to the next room, bed, or whatever it is. When we leave, we take our kids to each room in our house and ask them what they want to say goodbye to in the room—it’s amazing the things that our kids want to say goodbye to, things that are special to them that I would never have thought were special to them.

You’re not going to have time to meet individually every person that you want to say goodbye to, so think in categories. A blog I’ve followed a while, Cultureblend, suggests the following categories of people and how to say by to them:

  • Closest Friends — Quality time alone – Go away for the weekend
  • Close friends — Go to dinner individually
  • Good Friends — Go out as a small group
  • Friends — Invite to a going away party
  • Acquaintances — Send an email about your departure
  • Stupid People — Walk the other way when you see them

Part 4: Think future1

In parts 1-3, you say goodbye to the past without regret, leaving you in an emotionally healthy place to be able to greet and look forward to the future. Being intentionally about thinking future helps “complete” the transition in your heart and mind. As you say goodbye to friends, as you process change yourself, and especially as you talk with your kids, intentionally think of the future in the new place or in the old place without the person who’s leaving. A few questions to consider, though there are countless ones you can use to process:

  • How will life in the new place be similar or different? Or, if you’re saying goodbye to someone who is leaving, what will be new or different without the person?
  • What can I look forward to or excites me?
  • What saddens me? What will I miss?
  • What hopes do I have for the person going or staying behind?
  • What do I want the relationship to look like going forward? Note: it’s vitally important, especially with children, not to make promises you can’t keep, but it is important, especially with children, for them to express hopes or desires for continued contact.

As you think future, your heart and mind will “complete” the circuit of processing the change and transition occurring, freeing you up to embrace the future even as you are thankful for and miss the past.

Conclusion

There you have it: the four steps to creating a regret-free, emotionally healthy, good goodbye for you and your children. I suggest using RAFT whenever you have a friend traveling internationally. One thing I regret is that I didn’t RAFT my goodbye when a very good friend traveled home in early 2020; he was supposed to return in three weeks, so I didn’t do anything special…and then COVID came and I still haven’t seen him again. So RAFT well and RAFT often.

And if you haven’t read Third Culture Kids, make sure to pick up a copy because it’s full of wisdom like this.

Footnotes:

1. In Third Culture Kids, the authors list this step as “Think Destination”; I’ve changed it to “Think future” so that it can apply to people who are staying behind, not just those who are leaving.

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How to: Contribute to an IRA while an expat

This week, The Prepared Expat takes a deep dive into how you, as an expat, can contribute to an Individual Retirement Account (IRA) while an expat US citizen and while still claiming the Foreign Earned Income Exclusion. If none of those things make sense to you, keep reading on because today’s how to can save you tens of thousands, if not hundreds of thousands of dollars in taxes and investment opportunity costs.

Read more: How to: Contribute to an IRA while an expat

Note: while most of The Prepared Expat is for a global audience, not just US citizens, this guide is specific for US citizens.

Articles on The Prepared Expat may contain affiliate links, which help support this site at no cost to you. See full disclosures & disclaimers.

One of the disadvantages to being a US citizen is that, even when you live outside the United States, you are subject to paying US income tax on your worldwide income, regardless of where it is sourced. Oddly, enough, the only other country in the world that does this is Eritrea (so the US is in good company?). However, the US tax code provides a great provision called the Foreign Earned Income Exclusion (FEIE) which will benefit many expat US citizens.

The Foreign Earned Income Exclusion (FEIE) means that your first roughly $105,000 of foreign-earned income is excluded from the US federal taxes. That is, if you make less than $105,000 and claim FEIE, then you don’t pay any tax to the US government. This is a great benefit, but it presents a problem if you want to contribute to a retirement IRA (whether Roth or Traditional), because IRA contributions require that you have earned income in order to make a contribution. If you don’t have earned income, then you can’t contribute to an IRA.

So, for example, if your foreign earned income is $85,000 and you claim FEIE, then the FEIE exclusion of $105,000 counts against your $85,000 earned income as a kind of anti-income. Thus, the IRS would consider your entire $85,000 to not be earned income. That’s great since it would mean you pay $0 in taxes, but without earned income you also can’t contribute to an IRA. Most expats I know think this means that they have to choose between contributing to an IRA or claiming FEIE, but this its not true.

However, that’s not true. Now, I’m not a financial or tax expert, but Joshua Sheats of Radical Personal Finance is (just look at the letters after his name: MSFS, CFP, CLU, ChFC, CASL, RHU, REBC, CAP); in episode 642 of his excellent podcast, he focuses on exactly this question. What follows is my summary of his explanation, with a transcript of the podcast after my summary.

How to contribute to an IRA while still claiming FEIE

First, simply make more money than FEIE excludes. That is, if you make $115,000 and claim FEIE, only $105,000 will be excluded and you’ll still have $10,000 that counts as earned income. You can still claim your normal deductions against that $10,000, but it counts as earned income and thus you can contribute up to that amount into an IRA.

Second, you can contribute to an IRA if you claim FEIE by using the strict days test (and not the bona fide resident test) and adjust your date period. The strict days test requires that you spend 330 days out of a 365 day period outside of the US; if you are in a foreign country for those 330 days, then you qualify to claim FEIE. However, you don’t have to claim that 365 day period from January 1 to December 31 of a given year; you can choose any rolling 365 day period and the FEIE will apply to you on a pro-rated basis.

Here’s an example of how it works. Let’s say that you’re outside the US for 14 months (January of 2022 to March of 2023). When you fill out Form 2555 to claim FEIE, on line 16 of part 3, you choose the time period of February 1, 2022 to February 1, 2023. You were outside the US for 330 of those 365 days, and thus you qualify for FEIE, but because you do not include January as part of the time period to qualify for FEIE, your January income will not be excluded via FEIE and thus will count as earned income. Thus, you can contribute to an IRA up to the amount that you earned from January. If you make $85,000 a year, that’s $232/day; 31 days in January would mean you have $7,192 that counts as earned income; you could thus contribute $7,192 to an IRA.

The above is just one example; you can adjust the time period you claim for FEIE however you like. Keep in mind that you will pay tax on any income that isn’t excluded by FEIE. You thus will want to adjust the time period you claim for FEIE to your advantage: long enough for you to contribute what you want to an IRA, but short enough that you don’t generate a high tax bill. You’ll need to adjust your dates to find the right time period to claim, just make sure that you were in another country for 330 days of the 365 day period that you’re claiming.

This works because Form 2555 is not a declaration to the IRS of when you were outside the US, it is just a declaration of which dates you are claiming to qualify for FEIE. Thus, by claiming the time period February 1, 2021 to February 1, 2022, you are not representing to the IRS that you were in the US during January of 2021; you’re just choosing the time period by which you qualify for FEIE. So long as you really were outside the US for 330 days of the 365 day period that you claim, you’re being truthful and qualify for FEIE.

Roth IRA or Traditional IRA?

One last thing, by claiming FEIE for most of your income and not claiming it for only a small portion of your income, your tax bill will most likely be near $0. What that means is that you’ll be far better off contributing to a Roth IRA rather than a Traditional IRA. If you’re not familiar with the difference, you contribute to a Roth IRA after you pay taxes on your income so that, when you withdraw funds from the Roth IRA, you don’t pay taxes then. On the other hand, with a Traditional IRA, you contribute before you pay taxes on your income and thus, when you withdraw funds from the Traditional IRA, you pay taxes then.

If you claim FEIE, though, your income tax rate is nearly if not actually zero, which means your contributions into a Roth IRA aren’t taxed now and won’t be taxed when you withdraw them, making your investment nearly, if not actually, tax-free. If you contributed to a Traditional IRA, though, then you would still pay taxes when you withdraw funds.

So take advantage of FEIE and a Roth IRA to make retirement investments basically tax-free!

Read the transcript of Radical Personal Finance Episode 642 below.

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Radical Personal Final Episode #642, partial transcript:

[You can contribute to an IRA] based upon how you claim your foreign earned income exclusion. There are two tests that can be used to qualify for the foreign earned income exclusion. The first test is a strict days test. It’s a test that simply goes based upon how many days you spend outside of the US. If you will spend at least 330 days out of a 365 day period outside of the US, in a foreign country, then you will qualify for the foreign earned income exclusion, regardless of any other fact…We’ll come back to that in a moment.

The other way you claim the foreign earned income exclusion is with what’s called the bona fide residence exception. So this is where you actually live somewhere else and you have a series of factors that demonstrate that, yes, you actually live somewhere else. If you can prove that you actually are a bona fide residence of another place, you actually live somewhere else, you’re not just bouncing around the world—you have a residency visa or you’re a citizen of another country, you have stable [a] house there, you work there, your family is there, etc., you’re a resident there and you plan to be a residence there forever—then you can qualify for the foreign earned income exclusion under the bona fide residency test. And that will give you the ability, if you needed to or wanted to, to spend more physical days in the US than the strict days test. Generally, you could probably spend up to about 4 months in the US. You can’t spend more than 4 months in the US every year because that would cause you to fail the substantial presence test if you were spending more than 120 days in the US every year and thus automatically subject you to US taxation. But if you spent a couple, 3 or 4 months in the US each year, you could do that as long as you are a true bona fide resident abroad. That won’t work and allow you to contribute to an IRA if you’re claiming the foreign earned income exclusion under that test, because that test is an annual test. It only works on calendar years.

But here’s the cool thing with the strict days test…It doesn’t have to be January 1 to December 31. So, you don’t have to be gone from the US from January 1 to December 31 in order to claim the foreign earned income exclusion. You simply have to qualify for it during any rolling 365 period that you choose. Which means that you could, if you wanted to, spend January, February, March, April, and May, in the US; you could leave the US on June 1 and be gone until June 1 the following year, and then return to the US for July, August, September, October, November, December of the following year and still claim the foreign earned income exclusion. Now the way that would work is you claim that 12 month period but then it is pro-rated to your 12-month tax year. So, if…under that fact pattern that I just described from June to June, if you claim the exclusion during that period of time, you would say “Listen, I would have 50% of my earnings that are subject to tax and I would have 50% that are able to claim the foreign earned income exclusion.” And the exclusion itself is pro-rated so you would have access to, say, $52,500 of the exclusion. But the thing is that you control that date.

Now let’s assume, with a case of simpler facts, that you are outside the US all the time. You haven’t come back in 5 years, you have zero days in the US. So thus automatically you’re going to qualify for the foreign earned income exclusion under the days test. Now what you’ve most likely been doing up until now is claiming your year from January 1 to December 31, just for simple convenience that’s what you’ve been claiming. Here’s what I would point out to you, though, you don’t have to claim that.

So here’s what you can do to create earned income that will allow you to contribute to an IRA: claim a different time period. Now, it doesn’t matter, you’re not representing to the IRS that you were in the US for a different time period, you’re just saying you’re claiming a different period.

For example, let’s say you earn $100,000 a year…your daily wages are $274…now you’re trying to generate some…earned income to contribute to an IRA, but you also want to make sure you qualify for the foreign earned income exclusion. Well, you don’t come back to the US, but $274 times…31 days is $8,494. So what you can simply do is, when you fill out your tax return and when you fill out form 2555 for the foreign earned income exclusion, on…part 3, taxpayers qualifying under the physical presence test, line 16 of part 3 says “The physical presence test is based on the 12 month period from this date through this date.” So when you are filling out form 2555 you simply write on that paper that the physical presence test is based on the period from February 1, for example 2018 through February 1, 2019. Then you go on and you explain that you haven’t traveled in the US, you were physically present in a foreign country for the entire 12 month period, but because you wrote on that line February 1 to February 1, you automatically now have 31 days that are not subject to the foreign earned income exclusion. Which means that your earned income is going to be pro-rated and you will pick up $8494 of income from that 31 day period. Thus that $8,494 will flow through your tax return and it’s available for you to make an IRA contribution.

So if you want to claim earned income, just claim a different set of dates on form 2555. And you can do that every year. You can do that February 1 2018 to February 2019 and then when you do the following year’s tax return, you can claim February 1 2019 to February 1 2020. All that you’re claiming is the days that you’re going to subject to that physical presence test. And so you’ve now created 31 days that you’re not going to claim the income for.

I would just say you’re going to need to play with this numbers, because this is very much one of those situations where you’re going to jigger the numbers. You’re not going to change your facts…we’re just jiggering the numbers to see what will help you the best.

Comment for you on IRA contributions: I don’t see any reason for you to contribute to a traditional IRA under this plan. What’s the point on deferring taxes to a later date when you can just go ahead and pay zero taxes, if you’re not already maximizing the foreign earned income exclusion amount? I can see why you would participate in a Roth IRA…but you judge appropriately.

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Tips & Tricks: Improve your airplane movie experience

I was sitting there on the airplane with shredded wires and a semi-disassembled pair of airplane headphones in front of me, trying to figure out how to get them to work and realizing that someone might think I’m assembling a bomb on a plane. That wasn’t my best choice, but what I was trying to do was get the airplane’s movie sound in both ears. The plane had those annoying two-hole plugins and my headphones just had one ear and it was a failed experiment from the start. But I decided on that flight that it was stupid to ever take a flight again without an adaptor so that I could listen to a movie with both ears, regardless of what the airline provided.

This week’s tip from The Prepared Expat: get some basic accessibility that will improve your airplane movie experience.

Read more: Tips & Tricks: Improve your airplane movie experience

Articles on The Prepared Expat may contain affiliate links, which help support this site at no cost to you. See full disclosures & disclaimers.

Why you should prepare accessories

Unlike most weeks when I give a detailed “why,” this week is quite simple: airplane headphones stink and if you’re taking a flight long enough to watch a movie (or several!), then it’s worth a little effort to improve your experience. You’ll find that not only does your movie experience improve, but your overall flight experience and, depending on the headphones you get, you may even arrive more refreshed than you otherwise would.

What accessories to pack

So here’s a few basic things to prepare that will significantly improve your flight experience:

First, bring your own headphones.

Nearly any pair of headphones on the planet will be an improvement over the headphones an airline provides, so bring whatever you use and like at home. However, if you’re looking for the best headphones for a flight, here are three suggestions for you:

  1. Get wireless (Bluetooth) headphones. You don’t have to worry about unplugging them when you stand up or about someone tripping over them when they get out of your aisle. Super convenient; it sounds small, but going wide-free is a massive improvement for your overall experience.
  2. Use active noise-canceling headphones. Not all noise-canceling is made equal; what you want is active noise canceling (ANC), which dynamically adapts to the noises around you to silence them. This matters immensely because part of the stress your body experiences on the plane is from the constant background noise of the engines. By using noise-canceling headphones, you’ll remove that noise, reduce your stress, sleep easier, and arrive more refreshed.
  3. Buy over-the-ear headphones rather than on-the-ear or in-the-ear headphones. I mistakenly bought a pair of headphones that were on-the-ear headphones and they worked fine for my daily use. But the slight pressure they out on the ears, not noticeable after an hour of use, was painful after 14 hours straight on a plane. An over-the-ear style will rest on your skull and not put any pressure on your ears. Over-the-ear is also superior to in-the-ear (like earbuds) because it will create better sound isolation and canceling. Now, some in-the-ear headphones create quite a good seal and will work well for you, but many don’t have a good fit.

Put that all together, and what you want are wireless, active noise-canceling, over-the-ear headphones.

A couple comments on some popular headphones:

  • AirPods – convenient for their wireless capability, but no noise canceling and a poor fit makes them less than ideal for a plane ride (even though I loved them for everyday usage).
  • AirPods Pro – worth the extra cost over AirPods for their noise cancelation and superior fit. I love them for everyday usage, but I’ve not yet taken them on a plane, so I don’t know how they’ll work in that environment. I’ll update this article once I do, as I’m eager to test it out.
  • Sony WH-CH700N – Aggressive noise cancellation that in my opinion is too much for everyday usage, but it’s great for a plane. Even though they’re technically over-the-ear, they do put light pressure on your ear which can become uncomfortable after a long haul, depending on your ear shape/size.
  • Bose QuietComfort – I haven’t personally used these, but know many expats who have and love them. Industry-leading noise-cancellation and an over-the-ear design. Pricier than other options, but if you have the means, I’ve heard they’re worth it.

Second, get some adaptors.

Specifically, you want to get two things:

Both these adaptors are cheap enough (and easy enough to lose) that I bring several with me on the plane.

Third, get a wireless transmitter

A wireless transmitter plugs into the airplane’s wired connection and transmits the audio wirelessly (usually via Bluetooth) so you can connect your wireless headphones to the airplane’s movie screen. Going wireless is a small change, but it makes a surprisingly large difference in the experience of your flight. You don’t have to worry about people tripping on the wires, accidentally pulling them out, them getting tangled in your seat-back table, or pausing your movie and removing wires when someone from your aisle needs to exit.

There’s lots of options, but I’ve personally had great results with the AirFly, made by TwelveSouth and would recommend them to you as a high-quality, time-tested option that comes from a solid company known for its quality accessories.

Fourth, prepare some backup options

This isn’t strictly necessary but I like to have a couple items to make sure I have a “backup” in case something doesn’t work. I pack a backup 3.5mm audio cable that connects my wireless headphones to the audio jack—in case the wireless transmitter doesn’t work or has a dead battery. I also pack chargers for my headphones & my Bluetooth transmitter. Nice long cables are a bonus if you’d ever have to wear them while charging (for super long flights). If you use an iPhone with a Lightning cable & not audio jack, then it’s also wise to have an extra Lightning-to-audio jack adaptor on hand as well.

Fifth, pack it all together

Again, this is optional, but I find it nice to have all these things in one baggie so it’s all prepared in once place. It’s easy ti lose those pesky little adaptors.

So there you have it! A few accessories that will greatly improve your movie experience, make your flight more convenient and pleasant, and (with noise-canceling headphones, at least) reduce the stress your body goes through on the flight!

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Flying with kids?

Make sure to check out my parent-approved tips for flying with young kids.

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