As I write this, my wife and I are about to leave on a one-month trip to England. This has been one of our “bucket list” plans for a long time now. We’ve been back and forth to Europe about a half dozen times over the years. But most of those trips were of the “if it’s Tuesday, it must be Belgium, and if it’s Wednesday, it must be Paris” variety. This time, we just wanted to go to one country and relax for a month, and we picked England because we are Anglophiles from way back.
But if my emails are any indication, some of you want to go a big step further: You actually plan to move to another country. Many of you are just going back to your ancestral homeland, while maybe others see some of the same websites I do that entice you with headlines similar to this one I recently read: “Live like royalty on your Social Security check in Costa Rica!”
Anyone planning to do that needs to read a booklet that the Social Security Administration produces called “Social Security—Your Payments While You Are Outside the United States.” You can find it online on the SSA’s website, SSA.gov. Just click the “Publications” link near the bottom of the homepage. Once there, pull down the “Topics” menu and you'll find the booklet under the “General Information” section.
By reading that publication, you will learn that if you are a U.S. citizen, the rules are pretty simple. You can get your Social Security benefits almost anywhere in the world. The Treasury Department doesn’t allow any federal government checks to be sent to North Korea or Cuba, and there are Social Security restrictions that prevent benefits from being sent to Vietnam and most of the republics that formerly made up the Soviet Union (places such as Belarus, Kazakhstan, Uzbekistan, etc.). There are some exceptions to those Social Security restrictions, if any of those remote places are beckoning you in retirement.
If you are not a U.S. citizen, but you have lived in this country legally and worked and earned Social Security benefits, then the rules get a little more complicated. I will briefly explain some of them.
If you are a citizen of one of the 25 countries that have Social Security treaty agreements with the United States (they are listed in the aforementioned booklet), then you also can get your benefits anywhere in the world—with the same restrictions that apply to U.S. citizens outlined above. You'll find the list of countries on page five of the booklet. The list includes most European countries as well as places such as Israel, Australia, Japan, and South Korea.
Page six of the booklet has another list of countries. If you are a citizen of one of those countries, you can get your Social Security benefits while living outside the United States, but only if you are receiving Social Security retirement or disability benefits. If you get Social Security dependent or survivors benefits, then the rules really get messy—way too complicated to explain in the short space of this column. Please refer to the booklet for more information.
If you are not a citizen of one of the countries listed on pages five and six of the booklet but you are receiving U.S. Social Security benefits, then as a general rule, those benefits will stop once you have been outside the country for more than six months.
If you are getting Social Security benefits while living overseas, you are generally subject to the same rules and regulations that apply to Social Security beneficiaries in the United States. Some of the rules are even more restrictive. For example, there is an earnings penalty that applies to any Social Security beneficiary in this country who is under full retirement age and making more than about $21,000 per year. But if you are under FRA and living overseas, you won’t get your Social Security check for any month you work over 45 hours, no matter how much money you make. There are exceptions to this rule. The most common is this: If you work for a U.S. corporation overseas, then you are subject to the more lenient earnings penalty rules that apply to U.S. residents.
If you are getting Social Security disability benefits while living overseas, the same rules apply to you as apply to people living in this country. That means, for example, that your claim will be periodically reviewed to make sure you are still disabled.
If you are a U.S. citizen living overseas, the benefits you receive are subject to the same income tax payments that apply to U.S. residents. If you are not a U.S. citizen, then the SSA will automatically withhold a portion of your benefits to cover possible tax obligations—although there are some exceptions to that rule.
Most people living overseas have their benefits sent by direct deposit to a bank in the country where they are living. On page 27 of the booklet mentioned earlier in this column, there is a long list of countries that have an international direct deposit treaty agreement with the United States. Assuming you have moved to one of those countries, you will have no problem getting your benefits electronically.
If you need to conduct some kind of Social Security business once you are living overseas, you obviously can’t just drive across town and visit your local Social Security office. But every U.S. embassy and consulate has a person on staff who is trained to handle Social Security business. So they are a good source of information and help. Or, assuming you have internet access, you can use the SSA’s website, SSA.gov.
One final point. Your Medicare coverage only works while you are living in the United States. So if you move to a foreign country and think you will be there for good, you might as well cancel the parts of Medicare for which you pay a monthly premium. These are usually Part B (medical insurance) and Part D (drug insurance).
Other than that, bon voyage! And send me a postcard from one of those pretty beaches in Costa Rica.
