Will Living In China A Long Period Of Time Hurt Financially?

[Pianote]

I'm 24 and want to stay in China at least 10 years- maybe 20- as I am paying off student loans and just like it here.  But I want to have money For retirement,  401 k, and anything else.  Will living in China 10-20 years hurt me financially?   

Is it realistic to want to stay in China until retirement age? 

[anonymoose]

That depends on how much you earn and save whilst in China.

[DavyJonesLocker]

many do, getting your money out is a different story but can be done.

 

Also you may feel very different about China in ten years time. For some it starts to eat at you slowly over time especially when you go back to your own country and see the difference. 

Just see how it goes and think about what you will do in your mid 30's Will your experience help you later on etc

[DrWatson]

It all depends. As DavyJonesLocker says, while you are thinking 10 years now, things may change before that timeframe. But on the other hand, I think it is smart you are thinking about the future and long-term career. No harm in that! But keep thinking that way always, keep thinking about your possibilities and opportunities. As a quick caveat, I went back to my country because I felt really limited in career opportunities in the end. I had originally planed to stay longer, but work-life really started to eat away at me after awhile and cause a lot of stress...long story, won't bore you though.

 

First of all, you can save money while you live abroad. When I was living in Asia, I got by on much less money because I didn't need an automobile, parking, health insurance, and frankly the rent and food was much cheaper. Where I'm from, sure the apartments are big and spacious, but I really didn't need much space. But you cannot really get a small apartment, even the studio apartments are huge and just a bit cheaper than a two-bedroom!!  My rent was much cheaper in Asia than my rent was ever back home!

 

I actually read an article once about people in Singapore and Hong Kong, and they are actually able to save a significant portion of the take home income due to things like nationalized health care and state pensions. On average they are able to save a lot more than the normal American worker, for example.  If you have surplus money each month, take a look at what sort of investment options are available. 

 

I lived overseas for a good part of my twenties (5+ years). On age alone if I compare myself with colleagues that are the same age, I am definitely behind those who did not take this path and got a regular job with retirement accounts and and did the corporate grind. They're in a better position financially, they have more equity on property they purchased, they have more compounded interest on their retirement accounts, etc. However, some also had identity crisis issues and quit life to be artists or vagabond world travelers or whatever. Grass is always greener, happiness is hard to find, and what not and what not.

 

But you know what? I would not trade those 5+ years for anything, even now looking back years later. It was priceless, and I have no regrets. If I had waited until retirement, who knows, perhaps I'd have health problems that would prevent moving abroad? Or perhaps I'd have family reasons why I could not go, such as elderly care, or--knock on wood--dad of a teen mom with a deadbeat boyfriend and deadbeat in-laws, or perhaps even mass amounts of debt from bad property investments or failed business ventures,... So many other things that can happen in life with no warning can go wrong at anytime. Or even worse, what if the fire in the soul went out and I didn't have it in me for the adventure? So basically...no regrets!

 

While you're young and have few responsibilities, do take advantage of that. Life is different for all, but maybe someday you may find yourself responsible for an entire family unit, and with that comes great responsibility and time commitments (What ever you do don't say "I'll never have kids", I've seen that so many times and my my how time changes people, I wish we had wagered bets!!!!). My advice is to enjoy your freedom, flexibility, and opportunities while you have them now, and then when you think you want to settle down and make something permanent, then look into all of the big things and make the choice that will work best for you.

 

After all, who knows, maybe you'll love China so much you decide to make it home for life? You just never know until you try it. Maybe you'll start a business in China based off of some idea in your head and you'll become an business owner? 

 

Neither choice is wrong, and there will be sacrifices with both. You just have to figure out what works out best for you and what you can live with. 

[歐博思]

Secondary to your main question, you could move out savings via cryptocurrency. Tertiary to this is how difficult it is to use cryptos in China now because exchanges were clamped down on by the government.

 

Anyway, I think DavyJones hit the nail squarely on the head.

 

 

[ChTTay]

You can move legally earned and taxed money out of China via bank wire transfers. You need to show the bank tax information (school should get this for you) that shows you’ve paid tax on income, then there’s also a form to fill in concerning tax. Finally you bring your contract. 

 

Google the 5 year tax rule for foreigners in China and keep that in mind too. 

 

Otherwise, agree with the above posters. 

[happy_hyaena]

22 hours ago, Pianote said:

I'm 24 and want to stay in China at least 10 years- maybe 20- as I am paying off student loans and just like it here.  But I want to have money For retirement,  401 k, and anything else.  Will living in China 10-20 years hurt me financially?   

Is it realistic to want to stay in China until retirement age? 

 

What are you doing in China exactly? Teaching English?

[Pianote]

Yes, teaching English.

[imron]

What is your earning and savings potential in China vs your earning and savings potential in your home country?

 

How big is the difference on an annual basis?  Multiply that by the years you plan to spend in China, and that's a rough ballpark of how much better or worse off you'd be.

[Pianote]

my savings potential is definitely better in China.

[edelweis]

On 1/10/2018 at 5:33 PM, Pianote said:

retirement,  401 k

random question from a non-US citizen:

can Americans open an account and make payments into Social Security (I understand this is the retirement thing) and 401k while abroad?

Both legally and technically (won't the relevant services want to see you in person at least once?)

[lips]

You may not be able to contribute to your 401K while in China.  And

13 hours ago, DrWatson said:

more compounded interest on their retirement accounts

Also your SS account will be much less.

[happy_hyaena]

1 hour ago, Pianote said:

Yes, teaching English.

 

Just out of curiosity, is it possible for you to make some kind of "career" out of that in China or will you just be bouncing between various schools? Do you plan for example to take some work in a 3rd tier city and then slowly work your way up to getting a better paycheck in a richer city?

[edelweis]

@lips does it mean that American employers will contribute to an employee's SS and 401k, but Chinese employers will not?

Could one make up for the difference if one earned enough money in China?

[889]

" . . . can Americans open an account and make payments into Social Security"?

 

Americans overseas who are self-employed must pay Social Security tax. Americans overseas who work as employees are not subject to Social Security tax (except in the relatively rare case the employer is an American company, like a U.S. bank or airline) and cannot make voluntary Social Security tax payments.

 

So salary received by a U.S. citizen as a teacher at a Chinese school is not subject to Social Security tax. But payments for private tutoring are, if more than US$400 in a year.

 

Americans who spend most of their career outside the U.S. should be aware that they need at least 10 years of Social Security tax payments to qualify for Social Security benefits and to get Medicare coverage.

 

(Treaties may change these rules in some countries, but not in China.)

[Pianote]

I plan on working at this school as long as possible. My contract ends in October but they say I can renew it. I live in a tier 2 city and don't pay rent, utilities or food (unless I want to eat something different). 

[歐博思]

On 11/01/2018 at 12:29 AM, ChTTay said:

You can move legally earned and taxed money out of China via bank wire transfers.

Aren't there limitations on the amount one can move out this way?

[imron]

I don't know if the regulation has been changed, but Chinese nationals could also transfer up to a certain amount (tens of thousands of dollars) per year with nothing required except their ID card. 

 

If you have a Chinese friend you can trust just take them with you to the bank and get them to transfer the money to your overseas account. 

 

I used this method several times with good success. 

[ChTTay]

Chinese people can transfer 50k in one year relatively easily. They can also transfer that amount in one go if they want. Easiest way for them is just to use Alipay to do it.

 

As for for a limit on transfers, it may be if you’re earning millions but we can transfer as much as we can show we’ve paid tax on. I’m an International school teacher. 

[imron]

Show that you've paid tax being the key issue. 

 

If for example you've been doing part time tutoring on the side for RMB 200/hour, it's unlikely that you'd pay tax on that.