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Old 17-06-2019, 02:53 PM   #1261
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Is my assumption that insurance payouts, say health payouts, are protected from creditors for bankrupt individuals? It will be a disaster if a bankrupt falls sick and cannot pay his hospital bills.
In the United States? Yes. The health insurance companies pay the providers directly, or at least that's thoroughly common. "Do you have insurance? Which plan?" are two very common, upfront questions in U.S. medical care.

Medical crises still cause lots of personal bankruptcies in the United States, but it's less bad than in the recent past since the percentage of the population that's uninsured has declined substantially (thanks to "Obamacare").

The situation is a little odd in Singapore (also). The medical insurance here operates much more frequently on a reimbursement basis. But how do you come up with the cash to pay for medical care (for later partial or full reimbursement) if you're bankrupt? In practice, you probably don't, so if you're bankrupt it's quite likely you'll be obtaining your care from public medical providers offering the best subsidies, notably C ward in public hospitals. Then, you'd use MediSave dollars (which are shielded from creditors and court judgments) and perhaps even Medifund to plug gaps. So an Integrated Shield plan designed to cover private hospital care may not really be "operable" if/when you're cash strapped.

It's even tougher if you're a bankrupt or otherwise cash strapped non-citizen in need of medical care in Singapore, although you should be in pretty good shape if you've got a baseline Integrated Shield plan (e.g. Aviva's MyShield Plan 3) and/or some decent or better employer-provided coverage.

It's not fun to be bankrupt or cash strapped, basically.
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Old 21-06-2019, 06:43 AM   #1262
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BBC, do you know the most efficient and cheapest way of having a working US mobile number more or less permanently on international roaming here in Singapore?

Many moons ago, I or someone else had asked a similar question and the consensus I think had been getting a Google Voice number. I have that and that works through the Hangouts app for making calls to or receiving calls from people in the US and receiving text messages from folks in the US.

HOWEVER - suddenly within the past 6 weeks a bunch of my financial institutions are saying that they don't recognize the (Google Voice) number as a mobile number in their records and need me to update.

Any advice?

I have a SSN and will be traveling there albeit temporarily soon. I have a shipping address (actual, not PO box or virtual) there as well. I'm not sure I want to shell out US$30-40 per month just for this, but it would be good to know if there are options. Thanks so much!!
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Old 21-06-2019, 09:40 AM   #1263
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BBC, do you know the most efficient and cheapest way of having a working US mobile number more or less permanently on international roaming here in Singapore?

Many moons ago, I or someone else had asked a similar question and the consensus I think had been getting a Google Voice number. I have that and that works through the Hangouts app for making calls to or receiving calls from people in the US and receiving text messages from folks in the US.

HOWEVER - suddenly within the past 6 weeks a bunch of my financial institutions are saying that they don't recognize the (Google Voice) number as a mobile number in their records and need me to update.

Any advice?
If you only need a number for inbound SMS, you could try these mobile apps: FreedomPop, TextNow, Textfree. Check the terms and conditions carefully, in particular the rules on keeping the number active.

If you want a real SIM card from a major U.S. carrier, you could try T-Mobile's US$3/month prepaid SIM. A prepaid SIM kit may be free (or $1) if you shop around and look for coupon codes, or worst case it'll be $10. Taxes are added, but if you can set up an Oregon address with Oregon area code, you'll pay the lowest tax rate (8.74%). So that $3/month should end up as $3.26/month -- under $40 per year.
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Old 21-06-2019, 11:38 AM   #1264
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Hi BBCwatcher,

I am interested to buy US treasury issues and do a regular ETF investment on US stocks of USD100 monthly.

Which broker can offer the best deal?
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Old 21-06-2019, 03:32 PM   #1265
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I am interested to buy US treasury issues and do a regular ETF investment on US stocks of USD100 monthly.
Which broker can offer the best deal?
I'll answer your questions directly below, but I'm not sure why you specifically want to buy U.S. Treasuries and U.S. listed stocks. The investment world is a somewhat bigger place.

1. Your US$100/month flow into U.S. stocks suggests that your purchases of U.S. Treasuries would be in correspondingly low dollar amounts.

If you have a U.S. Social Security number, U.S. bank or U.S. credit union account, and U.S. mailing address, then the very best option is to open a TreasuryDirect account online. TreasuryDirect also offers U.S. Savings Bonds, and they're often even more attractive than other U.S. Treasury bills, notes, bonds, and securities.

Failing that, in low dollar amounts your next best option is likely Schwab. However, you need a minimum of US$25,000 to open an account with Schwab Singapore. You're not required to keep that opening amount there, but it's a fairly big hurdle. Schwab lets you buy U.S. Treasuries at initial auction free of charge and hold them to maturity free of charge. No commissions, no custody fees. And U.S. Treasuries are available in US$100 increments. However, there will be a little bit of cost if you're depositing Singapore dollars into your Schwab account. You can do that via local FAST or GIRO, and the Singapore dollars will automatically be converted to U.S. dollars at a fairly reasonable rate. But the currency conversion cost won't be as low as Interactive Brokers can offer.

Interactive Brokers is another possible choice, but they have a monthly minimum commission if your total account value is below US$100,000. That is, if you don't incur any commissions through trading (or only trivial commissions), IB will charge a minimum commission of US$10 (typically), except if your total account value is US$100,000 or more. Also, Schwab seems to offer better access to low dollar increments of U.S. Treasuries than IB does, and IB charges a commission to buy U.S. Treasuries even at initial auction.

2. As mentioned, US$100/month is a low amount. Assuming you can get past the US$25,000 minimum account opening requirement, Schwab could work pretty well at that level. Schwab offers extremely low cost U.S. stock index mutual funds, notably SWPPX or SWTSX. SWPPX (which tracks the U.S. S&P 500 Index) has a 0.02%/year total expense ratio, and SWTSX (which tracks the Dow Jones U.S. Total Stock Market Index) is 0.03%. True, you'll pay the U.S. dividend withholding tax rate on those funds, and they'll be subject to U.S. estate tax for any amount over your estate tax exemption. (For non-U.S. persons the U.S. estate tax exemption is US$60,000.) But there's no commission to buy either mutual fund, no custody fees, no sales charges, and the minimum increment is US$1.

If you have a U.S. "footprint" (Social Security Number, U.S. mailing address, U.S. bank or U.S. credit union account) then you could open an account with Fidelity U.S. and invest in FZROX. That's their total stock market index mutual fund, and it's the same basic deal except that the total expense ratio is literally zero.

Yet another possibility is to "batch up" your stock purchases and to use Standard Chartered Singapore to buy the lowest cost London-listed U.S. stock index fund you can find, probably CSPX. For example, you could buy US$600 of CSPX every 6 months. You would batch up your purchases in order to reduce the impact of Standard Chartered's minimum commission charge per trade.
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Last edited by BBCWatcher; 21-06-2019 at 03:38 PM..
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Old 22-06-2019, 04:05 PM   #1266
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Thanks BBC watcher! This is really an awesome explanation!
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Old 24-06-2019, 11:33 PM   #1267
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Hey BBCW,
I'm new to the forum and your thread as the S.O. and I relocated recently from the US, but I've enjoyed reading through the last 12 months of your insight and perspective. My S.O. shifted with her employer here, so our primary income stream will be SGD for the next 2+ years. However, I am still working part-time for my US-based company and getting paid in USD (it's been a mess with MOM and IRAS), and most of our retirement and savings are Stateside in credit unions, Fido, and Vanguard. We do fit squarely in your definition of "US persons" and likely (but not guaranteed) will return to the US at the completion of my wife's assignment.

I have a couple questions for you:
  1. Are there any financial opportunities that would be strongly appealing to us here in Singapore, given that I have relatively easy access to US-domiciled mutual funds and banking products?
  2. I haven't gotten many warm fuzzies from you on US persons investing in the SRS but wanted to confirm you really did not see any tax advantage for us at all?
  3. Since most of our income is now in Singapore, I would anticipate we have two options: either settle for a higher-cost Singapore investment vehicle that avoids PFIC complications or periodically transfer funds back to the US for investment. (Somewhat depending on your answers to #1 and 2 above) what are your thoughts?
  4. You've gone over life and medical insurance at great length; any thoughts on contents coverage?

Thanks!
Shane
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Old 25-06-2019, 06:14 AM   #1268
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We do fit squarely in your definition of "US persons" and likely (but not guaranteed) will return to the US at the completion of my wife's assignment.
OK.

Are there any financial opportunities that would be strongly appealing to us here in Singapore, given that I have relatively easy access to US-domiciled mutual funds and banking products?
Yes, a couple ideas come to mind. Either/both of you should continue contributing to 401(k) plans if your employers offer them. You and your S.O. can also contribute to IRAs if either of you has earned income that isn’t excluded via the U.S. Foreign Earned Income Exclusion (IRS Form 2555), and assuming you file a joint tax return. (If you don’t file jointly then you each must qualify individually.) There’s something called a “backdoor Roth IRA” if your income is too high.

As U.S. persons you can both contribute to 529 plans if you wish. Last I checked New York has a very good one, but there might be a better choice if you’re still treated as a resident of a particular state.

If you’re self-employed and thus don’t have a 401(k) you might be able to set up a Solo 401(k), although I don’t know much about it.

If your income is lower (now lower U.S. tax bracket) then you could consider Roth conversions, if applicable.

Last I checked the income-based repayment terms for student loans didn’t factor in foreign excluded income, so you could take a look at that option if either of you has outstanding student loan debt.

I haven't gotten many warm fuzzies from you on US persons investing in the SRS but wanted to confirm you really did not see any tax advantage for us at all?
I don’t think it’s worth the hassle. Certainly you wouldn’t do it until after exhausting the more attractive U.S. vehicles — IRA, 401(k), 529. Oversimplifying only slightly, you’d have to lock the SRS money for 8 to 10 years (penalty free withdrawal is available 10 years after account establishment assuming you’ve left Singapore and aren’t citizens), the IRS claws back some of the initial Singapore tax savings to the extent you have unexcluded income, you can only invest the SRS funds in SRS compatible and U.S. friendly ways — Singapore Savings Bonds would be on that short list — with pay-as-you-go U.S. income tax (SRS is meaningless on the U.S. side), you’re taking a ~10+ year gamble on the currency exchange rate, and you still pay 7.5% Singapore tax at the end (15% rate on 50% of the total withdrawal, with some risk of a rate hike, and meaning this won’t really work at all if you’re in a lower Singapore tax bracket) but might be able to apply some of that future tax as a Foreign Tax Credit on the U.S. side in a very complicated calculation. (I think you can only take a future FTC on the portion that’s attributable to unexcluded income.) Could you end up with a little tax savings at the end? Maybe, but the investment choices realistically available to U.S. persons are limited and lousy. And did I mention it’s a hassle?

Since most of our income is now in Singapore, I would anticipate we have two options: either settle for a higher-cost Singapore investment vehicle that avoids PFIC complications or periodically transfer funds back to the US for investment. (Somewhat depending on your answers to #1 and 2 above) what are your thoughts?
Definitely the latter.

What Singapore-based investment choices would you like to nominate for consideration? SSBs are mildly interesting as variable CD-like instruments for holding some Singapore dollars in reserve, so I think those are OK as a buffer pool during your time in Singapore. The interest is U.S. taxable, of course, and your CDP account is U.S. reportable. Beyond that the list gets very short, I think. Sometimes there’s something slightly interesting and U.S. compatible (and taxable), such as the 2.7% Temasek general obligation bond that popped up in 2018, that bars U.S. persons completely. (Not for any genuine regulatory or legal reason that I can discern.)

You've gone over life and medical insurance at great length; any thoughts on contents coverage?
Just that the “all-risks” variant is much better than “insured perils.” Last I checked AXA had a pretty good deal on that type of insurance. The bundled liability insurance is somewhat interesting but doesn’t seem to cover U.S. risks. It’s usually local only or worldwide excluding North America.

Last edited by BBCWatcher; 25-06-2019 at 06:48 AM..
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Old 25-06-2019, 10:21 AM   #1269
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Hi BBCW,

I have another query. Fyi, i am a non-US person. I have some USD in SC account settlement already. Apparently, there is no way to transfer out of SC without converting it to SGD and incur the spread.

so i wonder there is any Ireland domicile ETF for US treasury bonds?

thanks


I'll answer your questions directly below, but I'm not sure why you specifically want to buy U.S. Treasuries and U.S. listed stocks. The investment world is a somewhat bigger place.

1. Your US$100/month flow into U.S. stocks suggests that your purchases of U.S. Treasuries would be in correspondingly low dollar amounts.

If you have a U.S. Social Security number, U.S. bank or U.S. credit union account, and U.S. mailing address, then the very best option is to open a TreasuryDirect account online. TreasuryDirect also offers U.S. Savings Bonds, and they're often even more attractive than other U.S. Treasury bills, notes, bonds, and securities.

Failing that, in low dollar amounts your next best option is likely Schwab. However, you need a minimum of US$25,000 to open an account with Schwab Singapore. You're not required to keep that opening amount there, but it's a fairly big hurdle. Schwab lets you buy U.S. Treasuries at initial auction free of charge and hold them to maturity free of charge. No commissions, no custody fees. And U.S. Treasuries are available in US$100 increments. However, there will be a little bit of cost if you're depositing Singapore dollars into your Schwab account. You can do that via local FAST or GIRO, and the Singapore dollars will automatically be converted to U.S. dollars at a fairly reasonable rate. But the currency conversion cost won't be as low as Interactive Brokers can offer.

Interactive Brokers is another possible choice, but they have a monthly minimum commission if your total account value is below US$100,000. That is, if you don't incur any commissions through trading (or only trivial commissions), IB will charge a minimum commission of US$10 (typically), except if your total account value is US$100,000 or more. Also, Schwab seems to offer better access to low dollar increments of U.S. Treasuries than IB does, and IB charges a commission to buy U.S. Treasuries even at initial auction.

2. As mentioned, US$100/month is a low amount. Assuming you can get past the US$25,000 minimum account opening requirement, Schwab could work pretty well at that level. Schwab offers extremely low cost U.S. stock index mutual funds, notably SWPPX or SWTSX. SWPPX (which tracks the U.S. S&P 500 Index) has a 0.02%/year total expense ratio, and SWTSX (which tracks the Dow Jones U.S. Total Stock Market Index) is 0.03%. True, you'll pay the U.S. dividend withholding tax rate on those funds, and they'll be subject to U.S. estate tax for any amount over your estate tax exemption. (For non-U.S. persons the U.S. estate tax exemption is US$60,000.) But there's no commission to buy either mutual fund, no custody fees, no sales charges, and the minimum increment is US$1.

If you have a U.S. "footprint" (Social Security Number, U.S. mailing address, U.S. bank or U.S. credit union account) then you could open an account with Fidelity U.S. and invest in FZROX. That's their total stock market index mutual fund, and it's the same basic deal except that the total expense ratio is literally zero.

Yet another possibility is to "batch up" your stock purchases and to use Standard Chartered Singapore to buy the lowest cost London-listed U.S. stock index fund you can find, probably CSPX. For example, you could buy US$600 of CSPX every 6 months. You would batch up your purchases in order to reduce the impact of Standard Chartered's minimum commission charge per trade.
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Old 25-06-2019, 02:21 PM   #1270
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Apparently, there is no way to transfer out of SC without converting it to SGD and incur the spread.
There's no way to wire U.S. dollar funds, as U.S. dollars, from Standard Chartered? If that's possible, what'd be the cost?

so i wonder there is any Ireland domicile ETF for US treasury bonds?
Yes, IBTA and CBU7, as examples.
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Old 25-06-2019, 04:55 PM   #1271
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Yes, a couple ideas come to mind. Either/both of you should continue contributing to 401(k) plans if your employers offer them. You and your S.O. can also contribute to IRAs if either of you has earned income that isn’t excluded via the U.S. Foreign Earned Income Exclusion (IRS Form 2555), and assuming you file a joint tax return. (If you don’t file jointly then you each must qualify individually.) There’s something called a “backdoor Roth IRA” if your income is too high.
These for the most part are already done or in progress - we "front-loaded" our 401(k)s before we left while we were still both earning USDs and are doing the backdoor Roth conversion later this year. Same on HSAs but those too are not available going forward now that we have Singapore-based insurance.

As U.S. persons you can both contribute to 529 plans if you wish. Last I checked New York has a very good one, but there might be a better choice if you’re still treated as a resident of a particular state.
We're actually invested in the Utah 529 plan, on account of its history of good Vanguard options and very low fees. I noted you've suggested California and New York in the past - I have heard a lot of good press for Nevada and am quite satisfied with Utah if you'd consider other options for recommendations.

SRS = hassle, got it. That's a shame really; we tried to take advantage of as many tax-beneficial options as we could prior to relocation but it would be nice to have further options going forward. First World problems, I suppose.

Definitely the latter.
What Singapore-based investment choices would you like to nominate for consideration? SSBs are mildly interesting as variable CD-like instruments for holding some Singapore dollars in reserve, so I think those are OK as a buffer pool during your time in Singapore. The interest is U.S. taxable, of course, and your CDP account is U.S. reportable. Beyond that the list gets very short, I think. Sometimes there’s something slightly interesting and U.S. compatible (and taxable), such as the 2.7% Temasek general obligation bond that popped up in 2018, that bars U.S. persons completely. (Not for any genuine regulatory or legal reason that I can discern.)
I didn't have specific options in mind other than potentially SSBs. We already have Singapore exposure through VSS (1% Sing), VTIAX (0.9% Sing), and VTABX (0.5% Sing) but I guess I was hoping for unique opportunities that we wouldn't otherwise have in the US. It sounds like there may be plenty of these opportunities but they're all expensive and/or tax-disadvantaged. For the moment, I think we're able to maximize our DBS Multiplier upwards of 2-3% on salary and I'll just plan on periodic transfers to Vanguard.

I've been using TransferWise occasionally which has done the trick when needed. Do you think Interactive Brokers or another option would be preferable for regular foreign currency transfers back to the US?

Just that the “all-risks” variant is much better than “insured perils.” Last I checked AXA had a pretty good deal on that type of insurance. The bundled liability insurance is somewhat interesting but doesn’t seem to cover U.S. risks. It’s usually local only or worldwide excluding North America.
We're still wrestling with State Farm on our US liability umbrella but that's a different ball of yarn. I'll take a look at the AXA all-risks policy. Any thoughts on Chubb's myHome? I only ask because that's the coverage offered through DBS, which would help our Multiplier interest
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Old 25-06-2019, 04:57 PM   #1272
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There's no way to wire U.S. dollar funds, as U.S. dollars, from Standard Chartered? If that's possible, what'd be the cost?
Yes. SCB brokerage settlement account only allows fund transfer to own's SCB account. So unless i have a USD account with SCB, i have to convert via one of my SCB SGD account.

Today's spread is 0.9% to sell USD

Yes, IBTA and CBU7, as examples.
great!
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Old 25-06-2019, 08:14 PM   #1273
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We already have Singapore exposure through VSS (1% Sing), VTIAX (0.9% Sing), and VTABX (0.5% Sing) but I guess I was hoping for unique opportunities that we wouldn't otherwise have in the US.
Exposure to Singapore listed stocks doesn't really matter per se for your long-term savings. You're just visiting.

It sounds like there may be plenty of these opportunities but they're all expensive and/or tax-disadvantaged.
I think it's just straightforward cash management on the Singapore side, really. Chasing cash-related promotions and such, if you wish. Yes, DBS Multiplier is one such example.

You've seen me mention it before probably, but (if you haven't already) I'd grab Schwab's awesome ATM card (linked to a Schwab Bank High Yield Savings, Schwab Bank High Yield Checking, or a Schwab One brokerage account -- your choice, all work fine, although Schwab Bank insists on a U.S. mailing address) and a zero foreign transaction fee Mastercard or Visa credit card issued in the U.S., preferably set up with automatic monthly full balance payment.

I've been using TransferWise occasionally which has done the trick when needed. Do you think Interactive Brokers or another option would be preferable for regular foreign currency transfers back to the US?
I do. As long as you keep US$2,000 always parked at IB you'll end up paying a flat US$10 per month (the monthly minimum commission) to buy U.S. dollars affordably (and deposit them in a U.S. bank or U.S. credit union account) using Singapore dollars.

I'll take a look at the AXA all-risks policy. Any thoughts on Chubb's myHome? I only ask because that's the coverage offered through DBS, which would help our Multiplier interest
Chubb's myHome Protect appears to be an "insured perils" policy. If that's correct, it'll have some holes versus an "all-risks" policy. On the other hand the bundled personal liability coverage looks above average. On the other other hand the premium looks above average, too.
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Old 25-06-2019, 09:55 PM   #1274
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IBKR says minimum hold $2000 in equity balance. This means if stocks that are worth $2000 also factored into this minimum balance?
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Old 26-06-2019, 06:53 AM   #1275
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IBKR says minimum hold $2000 in equity balance. This means if stocks that are worth $2000 also factored into this minimum balance?
Total account value counts, so yes. But those stocks can and do wobble in value, so don’t cut it too close.
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