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Around the world, millions of people dream of becoming U.S. citizens. Yet recently, an increasingly popular trend has gone the other way, as a record number of people have given up their U.S. citizenship so far in 2013. What's making so many people flee for other countries, and how do taxes play a role?
In the following video, Dan Caplinger, The Motley Fool's director of investment planning, looks at the question of why so many rich American taxpayers have chosen to renounce their citizenship. Dan notes that taxes definitely play a role, as Facebook (NASDAQ: FB ) co-founder Eduardo Saverin saved a substantial amount of money when he gave up his citizenship immediately before the social-network company's IPO. But Dan points out that lately, financial regulation has made it harder for U.S. citizens abroad, with many foreign banks not wanting to comply with U.S. disclosure requirements and, therefore, choosing simply not to allow U.S. citizens to have banking relationships at all. In addition, personal issues can play a role, as expatriates become comfortable, and no longer see any need to retain their U.S. citizenship.
How does Social Security get affected by renouncing citizenship?
Social Security plays a key role in your financial security, and even those who give up their citizenship can still get their benefits under certain cases, although certain restrictions apply. Regardless of your situation, our brand-new free report, "Make Social Security Work Harder For You," includes insight from our retirement experts on making the key decisions that will help ensure a more comfortable retirement for you and your family. Click here to get your copy today.