Retiring abroad can lead to substantial savings for retirees on various expenses, from housing to food. This is a reason more Americans are opting for overseas retirement. If you’re contemplating retiring in a foreign country, you might wonder: Will I still be eligible for Social Security benefits?
Here is how retiring abroad impacts your Social Security payments.
Eligible for Social Security While Living Abroad? If you’re a U.S. citizen who qualifies for Social Security, you can move abroad and continue receiving your benefits, with just a few exceptions. This applies to retirement benefits, as well as family and spousal benefits, survivor benefits, and disability benefits.
You can opt for direct deposit at a U.S. financial institution, regardless of your global residence, but remember to update your address with Social Security. Alternatively, if the country you’re in has an international direct deposit agreement with the U.S., you can use a local financial institution to receive your payments. If you’re one of the rare recipients of paper checks, there might be fees for cashing and converting them.+
While receiving benefits as a U.S. citizen abroad is generally straightforward, you’ll need to complete a questionnaire from the Social Security Administration periodically. Your responses confirm your continued eligibility for benefits. Failure to submit the questionnaire could result in a suspension of your Social Security payments.
The exceptions:
Social Security cannot send funds to individuals living in North Korea or Cuba. In most cases, you won’t receive benefits while residing in Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, or Uzbekistan, although some limited exceptions exist. If you qualify for an exception, you must appear in person at a U.S. consulate or embassy every six months.
Social Security will retain your payments if you’re in a country where benefits cannot be received. You can access the funds once you relocate to a country where such payments are allowed.
Non-U.S. citizens who earned Social Security
Non-U.S. citizens who earned Social Security based on their work history can also receive benefits under specific circumstances upon moving abroad. However, the regulations for noncitizens receiving Social Security outside the U.S. are intricate. For a comprehensive breakdown, consult Social Security’s publication “Your Payments While You Are Outside the United States” or contact their representatives.
Will Medicare Still Be Available If I Move Abroad?
Healthcare expenses during retirement are a major concern for seniors. It’s vital to note that Medicare services aren’t available outside the U.S. You’ll remain eligible for Part A, which covers hospitalization and various inpatient stays, upon returning to the U.S. But deciding whether to enroll in Part B for doctor visits and outpatient care becomes crucial.
Enrolling in Part B might not be wise if you intend to reside abroad for an extended period, as premiums will be deducted from your Social Security payments. However, delaying Part B enrollment will result in a 10% additional premium for each year of delay, should you choose to enroll later.
Factors to Ponder Before Retiring Abroad If retiring abroad is on your mind, there are numerous financial and non-financial factors to weigh. Here are some key financial considerations:
- Health Insurance: Even in countries with universal healthcare, you might need private coverage unless you’re a citizen. The U.S. State Department recommends private insurance that covers medical evacuation to the U.S.
- Currency Fluctuations: Changes in the dollar’s strength can impact your purchasing power abroad. It is recommended to include some flexibility in your budget to account for any changes in currency exchange rates.
- Tax Implications: Moving abroad might require you to file U.S. tax returns. Consult a professional to understand how this change affects your tax obligations.
- Life Insurance: Certain life insurance policies may not pay a death benefit if you’ve lived abroad for an extended period. Inquire with your insurer about the impact on coverage.
Additionally, consider non-financial aspects like social support, transportation, the ability to return home, and climate when contemplating retirement abroad. Before making a significant move, consider renting in your chosen destination for a few months to assess its suitability.