Since the first missionaries and soldiers left our shores for other lands, Americans have lived overseas, either temporarily or permanently. The list of reasons varies from employment and business ventures to personal relationships or family ties, from emigration for political differences or religious purposes, to advanced education and study aboard programs. It is becoming more and more common for Baby Boomers to view retiring overseas as an attractive option. Lower costs of living, health benefits, lower taxes and the enjoyment of new scenery and a different lifestyle are a big draw for many.
Before packing up your china and forwarding your mail, though, you need to consider your retirement income. For many retirees, their Social Security benefits may be the only (or at least the largest share!) money coming in each month. The good news is, that except for a few countries including Cuba or North Korea, U.S. citizens can continue to receive retirement, disability and survivor benefits, if eligible, while living overseas.
Anyone considering a move out of the country should make sure all benefit arrangements are determined and completed prior to leaving the USA. This information cis available by calling the Social Security Administration (SSA) at 1 (800) 772-1213 or visiting a local office. No patience to be on the phone for hours and the idea of going to the local office is dreadful? Never fear, the great news is that most everything can be accomplished online from the comfort of your favorite chair. Let’s hear it for the Internet!
The first step should be to determine if your intended address is on the approved list of countries. The Social Security Administration has created an easy-to-use Online Payments Abroad Screening Tool https://www.ssa.gov/international/payments_outsideUS.html which asks a few basic questions to determine eligibility based on the country selected. Some benefits may be restricted or conditional based on dual citizenships or living in specified countries. If you run in to a restriction of condition, you can apply for exceptions with the SSA, although approval is not guaranteed.
Before you pick a beach to drink your Pina colada on, be certain to check out the US foreign policy goals and sanctions changes, via the U.S. Department of the Treasury. https://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx for the latest intel on your target country.
Another valuable resource is the Social Security Administration’s online pamphlet ‘Your Payments While You Are Outside the United States’ https://www.ssa.gov/pubs/EN-05-10137.pdf . This in-depth publication explains the process, restrictions, and eligibility. The publication defines ‘living outside the United States’ as “we mean you are not in one of the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, the Northern Mariana Islands, or American Samoa for at least 30 days in a row. The SSN considers you to be ‘outside the United States’ until you return and stay in the United States for at least 30 days in a row. If you are not a U.S. citizen, you also may have to prove you were lawfully present in the United States for that 30-day period. If you are not a U.S. citizen or you do not meet one of the conditions for continued payments, the SSN will stop your payments after you have been outside the United States for six full calendar months. Read the pamphlet completely as it also lists further conditions and time frames for eligibility and complete information on the regulations and processes.
“How much will I receive?” is a question most often asked and is determined by several elements including any full or part-time employment, age, marriage and other factors while residing internationally. The formulas used are explained in the SSA pamphlet, and you should be prepared for the possibility that you may not receive the same amount overseas that you did while in the United States.
There are benefits which cannot be received overseas including Special Veterans Benefits and Supplemental Security Income (SSI), as well as other government-funded financial aid, as they are contingent on physical residency within U.S. borders or one of its protectorates including Puerto Rico, Guam and the U.S. Virgin Islands.
NOTE: Medicare is also not accepted in non-US countries, and health insurance / health care options abroad should be researched well in advance of departure. However, citizens should continue to re-enroll in Medicare yearly to avoid penalties should they decide to return to the US – this is also further explained in the recommended publication.
The Social Security Administration strongly advises setting up electronic direct deposits with a financial institution from which you can access your funds more quickly overseas (internationally mailed checks can be lost, stolen or subject to the country of residence’s mail system). As in the United States, all changes or updates abroad must be reported to the Social Security Administration including a change of address, other income sources, marriage or death, employment changes and others, all listed in the online publication.
Some US embassies will have a Federal Benefits Unit that can assist with questions and issues and can be located via www.socialsecurity.gov/foreign . If you are already living internationally and become eligible for benefits, you can also contact this unit to begin the process of applying. And yes, you still must file your taxes annually with the IRS, but that’s a discussion all to its own.
Living or retiring overseas can be a rewarding experience, as well as a great adventure, but making sure all the ‘ducks are in a row’ before departing will save a lot of frustration and disappointments and allow you to enjoy your new life even more.