Working And Or Collecting Social Security Abroad

by Neal Frankle, CFP ®

If you are thinking about retiring outside the United States, you might be concerned about your retirement income. But you don’t have to stress. Dealing with Social Security abroad is a snap. You can easily apply for and collect Social Security benefits if you are out of the country no matter how long you are gone for. And you can often earn Social Security credits for your work aboard too. It can be a sweet setup.

Of the three tasks, applying for benefits is the most simple. That’s because you can apply for Social Security Retirement Benefits online these days. Yippee.

Collecting your monthly retirement check overseas is also pretty easy for 99% of us. First, you can always have your payments electronically deposited into your U.S. bank account and transfer the funds when you need them or have the money electronically deposited to your foreign account. As an alternative, Social Security can actually send a check to you abroad. Nothing to worry about.

There are a couple of restrictions to consider. But they don’t impact many people. In fact, you are only out of luck if you live in Cuba or North Korea. If that’s the case your payments will be suspended until you relocate to just about anyplace else.
Also, if you are going to any of the following places, you are going to have to agree to certain terms if you want to collect your Social Security:

  • Azerbaijan;
  • Belarus;
  • Georgia;
  • Kazakhstan;
  • Kyrgyzstan;
  • Moldova;
  • Tajikistan;
  • Turkmenistan;
  • Ukraine;
  • Uzbekistan; and
  • Vietnam.

(It’s too bad because I’ve heard that Kyrgyzstan is just wonderful in the spring!)

As you can see, most American citizens can travel and live just about anywhere without worrying about their Social Security income. If you are not a U.S. citizen however you might have your payments suspended if you reside outside the U.S. for six consecutive months. This is very country specific so it’s best to inquire directly with the Social Security Administration.
Payments Outside the United States screening tool.

Looking for a great online bank to do business with overseas? Try Capital One. They have outstanding 24/7 service 365 days a year. I love these guys because they pay high interest, offer a wide variety of banking products and are especially good at taking care of overseas clients.

How to Earn Social Security For Your Work Overseassocial security abroad

If you work overseas and your income is subject to U.S. Social Security, you will earn credits for your work. But even if your wages aren’t subject to SSI, you still might be able to earn credit if they country you work in has a reciprocal agreement with the USA. The good news is there is a long list of countries that do have such an agreement. They are:

Australia, Austria, Belgium, Canada, Chile, Czech Republic, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Luxembourg, the Netherlands, Norway, Poland, Portugal, South Korea, Spain, Sweden, Switzerland and the United Kingdom.

But before you break out the Schnapps and Bratwurst to celebrate your good fortune, there are a few items you need to consider. Sadly, if you receive a pension from a foreign country or from work performed in the United States that isn’t under the Social Security system, your SSI benefits might get snipped. The provision that reduces your Social Security is called the WindfallElimination Provision (WEP). So if you do work abroad and that leads to you receiving a foreign pension someday, just keep this in mind. You might want to reconsider going all out to earn the maximum Social Security benefit.

The rules here on this are a little messy. On the one hand, if you contributed to the Social Security system for 20 or 30 years, the impact of WEP is muted. But if you receive a state-sponsored pension from certain countries (like Israel) that pension could reduce your American Social Security benefit.

Collecting Social Security abroad or working and earning credits aren’t so difficult to accomplish. And because it’s so easy, it opens up retirement possibilities that you may not have even considered possible.

Are you thinking about relocating overseas when you retire? Is Social Security a big consideration? How are you going to arrange your Social Security payments if so? Would using an online bank simplify your retirement?


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