How to Apply for Social Security Benefits as a U.S. Citizen Abroad
America has a treaty with many countries to allow U.S. Social Security benefits for ex-pats to continue.
Published August 20th, 2020
Updated December 17th, 2020
Table of Contents
- Your Social Security payments will likely continue if you leave the U.S.
- The Social Security Administration has a screening tool that will help you assess how your overseas move will impact your payments.
- If you plan on continuing to work once you move, dual citizenship may help you avoid double taxation.
Maybe you’ve found an appealing island with a low cost of living for your retirement. Or perhaps you’ve always dreamed of living in Europe or Australia. If you plan on collecting Social Security benefits once you’ve moved, you’ll need to look into Social Security benefits for citizens living abroad before finalizing things.
America has a treaty with many countries to allow U.S. Social Security benefits for ex-pats to continue. But how that works, and whether your country is eligible, depends on your own unique situation. Before you start packing boxes and booking flights, make sure you’re fully aware of how the move will impact your Social Security payments.
Social Security Eligibility While Abroad
If you plan to leave the United States to live elsewhere, your first step should be to use the Social Security Administration’s Payments Abroad Screening Tool. There are countries with Social Security agreements with the United States, including Italy and Germany. In those areas, your benefits can coordinate with similar programs they already have in place.
If you’re moving to a country that isn’t included on that list, you still may be eligible. In these cases, whether you qualify for benefits abroad will depend on the country and whether you’re willing to sign an agreement to be paid in U.S. dollars, regardless of conversion rates.
For those who collect Social Security, moving out of the country doesn’t change your tax obligations. You will still be expected to pay a portion of your U.S. Social Security income to the IRS. The funds will be automatically deducted from each payment. As long as you’re a U.S. citizen, you’ll also have to pay a portion of any income you make to the IRS, even if the funds were earned in another country.
Depending on where you’re moving, you may find that dual citizenship is a better option. In this setup, you remain an American citizen while also accepting citizenship in your new place of origin. As long as you’re in a country that has an agreement with the U.S., though, your Social Security payments won’t be affected either way by having dual citizenship. The agreement eliminates the need to pay taxes on your U.S. earnings in your new country since you’ll still be paying taxes to the IRS on the payments you’re receiving.
One instance where dual citizenship can help you, though, is if you plan to earn income in your new country. The U.S.’s agreements with certain countries are designed to protect you from dual taxation. That means if you’re paying ex-pat Social Security tax while still working, the U.S. government can’t tax the money you’re making in your new country as long as you’re paying taxes on the money as a citizen there.
Fill Out the Right Documentation & Questionnaire
Once you’ve decided to leave the U.S., you’ll need to set up a Social Security transfer. Obviously, the SSA will need your new mailing address, but you’ll also need to make sure you get your money. Most recipients receive their Social Security by direct deposit, and there’s no reason you can’t continue this overseas. Check this list of areas that have international direct deposit agreements with the U.S. As long as your country is listed, you can simply redirect your payments to your new bank.
While you’re living overseas, every one to two years you’ll receive a questionnaire. This questionnaire goes to everyone collecting Social Security and living abroad. It simply determines whether you’re still eligible for payments. You’ll need to answer the questions, sign the document, and return it promptly to avoid having your payments suspended.
Although receiving Social Security while living abroad is fairly easy, other forms of income may be affected. If you receive government payments or rely on retirement savings for part of your income, we recommend sitting down with a financial advisor. You can then work out how your income will be affected and what you can do to reduce what it will cost you.
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