Moving abroad for retirement can be an enriching and exciting experience, and all that in itself is gain. But not all Americans do it for the mere pleasure of living and experiencing a new culture, but many of them do it to make their retirements, simply, can afford much more.
But before you even start considering this, you should be informed about the administrative and tax implications of wanting to use Social Security benefits while living abroad.
Make sure you meet all Social Security requirements and tax obligations to enjoy a hassle-free and smooth transition. Social Security benefits can be a constant source of income, even outside the United States, as long as the corresponding regulations are followed, and that’s what we want to help you understand.
Restrictions on Receiving Social Security Abroad
The first thing you should keep in mind is that, actually, in most countries of the world you can receive and use the money from your US Social Security retirement benefits, but there are 9 countries where that is prohibited by the federal government.
These countries are:
- Azerbaijan
- Belarus
- Cuba
- Kazakhstan
- Kyrgyzstan
- North Korea
- Tajikistan
- Turkmenistan
- Uzbekistan
But it is worth clarifying that it is not that you are going to lose money while you are settled in those countries. What the Social Security Administration (SSA) does is that it withhold payments, and they will be sent to you retroactively once you move to another country where it is allowed.
In the particular case of Cuba and North Korea, you will not be eligible to have any payments withheld while living abroad.
More Americans Retiring Abroad With Social Security Money: It Yields Much More
More and more Americans see other countries as an ideal opportunity to enjoy their retirement. If you have reached retirement age and are ready to spend your golden years exploring new territories and cultures, it is essential to consider certain aspects before taking that step.
One of the most common questions is: can I still receive my monthly Social Security benefits if I decide to live abroad? Yes, you can, except for the 9 countries mentioned above. Keep reading and know what are your rights and obligations.
The 10 Most Important Countries for Social Security Retirees
The 10 countries most chosen by American retirees, in order of number of beneficiaries based there, are the following:
- Mexico
- Canada
- Spain
- Costa Rica
- Panama
- Ecuador
- Portugal
- Thailand
- Italy
- Philippines
Social Security Benefits Abroad: What to Know Before Moving
In most cases, American retirees can receive their monthly Social Security benefits while residing outside the United States, with some minor exceptions. There is no time limit for living abroad and continuing to receive these payments, as long as certain administrative requirements are met.
Requirements to Receive Your US Retirement Abroad
One of these requirements is the annual submission of proof of life documents, which must be signed and returned promptly. In addition, beneficiaries must complete the Social Security Form SSA-7162, which consists of two pages and requests information about changes in residence and marital status, among other aspects. These forms can be mailed annually or biannually.
The United States Social Security Administration disburses a considerable sum in benefits for Americans residing outside the country. According to 2022 data cited by US News and World Report, the Administration pays approximately $6.1 billion annually to 760,000 beneficiaries living abroad.
Tax Obligations: Yes, They Will Chase You Abroad
Remember that even if you receive Social Security benefits while living in another country, you are still required to file a tax return in the United States. In addition, if you receive a pension abroad, this could affect your Social Security benefits, reducing the amount you receive monthly.
Keep an eye on the taxes you have to pay, because you could be in trouble with the Internal Revenue Service (IRS) if you stop paying them or fall behind: your benefits could be withheld to cover tax debts, if the case is extreme.