Retirement is often envisioned as a golden age where you can explore the world, cruise the seas, or settle in a new, idyllic location. For many Americans, this includes the possibility of living abroad. But can you move overseas and still collect Social Security benefits? The short answer is yes, you can retire abroad and continue receiving your benefits. However, there are important considerations and steps to ensure you don’t lose your pension.
Receiving Benefits Abroad
According to 2022 data from the U.S. Department of State, the Social Security Administration (SSA) sent approximately $6.1 billion in benefits to around 760,000 beneficiaries living outside the U.S. While it’s possible to live abroad and receive benefits, it requires planning and knowledge to navigate the process successfully.
Key Requirements
To maintain your benefits while living abroad, you’ll need to:
- Fill Out Form SSA-7162: This form is required every one or two years to update the SSA on your residency and marital status. Failure to submit it in a timely manner can result in the loss of your benefits.
- File a U.S. Tax Return: Regardless of where you live, you must continue to file a U.S. tax return. Be aware that receiving pensions from other governments can reduce your U.S. Social Security benefits.
Exceptions
There are certain countries where the U.S. does not send Social Security payments due to lack of agreements or hostile relations. These countries include:
- Azerbaijan
- Belarus
- Cuba
- Kazakhstan
- Kyrgyzstan
- North Korea
- Tajikistan
- Turkmenistan
- Uzbekistan
If you temporarily reside in one of these countries, your benefits will be suspended but paid retroactively once you move to an eligible country.
Medicare and Healthcare
While technically eligible for Medicare, benefits are generally not available outside the U.S. Therefore, paying for Medicare Part A (hospital insurance) might be useful for stateside medical care, but Parts B and D may not be beneficial. If you decide to enroll in Part B upon returning to the U.S., expect to pay a 10% premium penalty for each year you delayed enrollment.
Healthcare Abroad
It’s crucial to have access to reliable medical care in your new country. Explore local health insurance options and ensure you can receive regular, high-quality medical services.
Applying for Benefits Abroad
If possible, apply for your benefits while still living in the U.S. This process is straightforward and can be completed online with a U.S. address.
From Abroad
If you need to apply while living abroad, you’ll have to visit a Federal Benefits Unit (FBU) at a U.S. embassy or consulate. Although feasible, this process can be less convenient than applying from within the U.S.
Managing Your Pension
Consider keeping your U.S. bank account to receive your Social Security payments. Directly depositing into a foreign account might not give you the best exchange rate. By maintaining a U.S. account, you can transfer funds when exchange rates are more favorable, stretching your retirement income further.
Retiring abroad can be a dream come true, offering better climates, lower costs of living, and potentially superior healthcare. With careful planning and understanding of the requirements, you can continue to receive your Social Security benefits while enjoying your new home abroad.
FAQs
Can I receive Social Security benefits if I live outside the U.S.?
Yes, you can receive benefits while living abroad, but you need to provide periodic updates to the SSA and file U.S. tax returns.
Are there any countries where I can’t receive my Social Security benefits?
Yes, you cannot receive benefits in countries like Azerbaijan, Belarus, Cuba, Kazakhstan, Kyrgyzstan, North Korea, Tajikistan, Turkmenistan, and Uzbekistan.
Do I need to enroll in Medicare if I live abroad?
You are eligible for Medicare, but benefits are not available outside the U.S. Enrolling in Part A might be useful for stateside care.
How do I apply for Social Security benefits from abroad?
You can apply at a Federal Benefits Unit (FBU) at a U.S. embassy or consulate if you can’t apply while in the U.S.
Should I use a foreign bank account for my Social Security payments?
It’s generally better to keep a U.S. bank account to avoid unfavorable exchange rates and transfer funds when rates are better.
