For the first time in more than half a century, more people may be leaving the U.S. than immigrating to the states. As part of this broader trend, the Social Security Administration (SSA) reports that there are more than 711,000 U.S. citizens (both native-born and naturalized) and eligible retirees who are receiving Social Security payments at foreign addresses. And while there is limited recent data on the exact number of immigrants who specifically plan to retire in their home countries, economic and demographic estimates indicate that about one-third of all U.S. immigrants eventually leave the country, with many returning home for their golden years due to things like proximity to family members, the rising cost of living and lack of medical resources in the United States.
If you are among those who are planning to move abroad later in life, it is important to understand how this may affect your retirement savings accounts and benefits that you have accrued in the United States. Here’s what you need to consider.
Can I still claim my social security benefits when I move abroad?
It depends.
U.S. citizens can generally continue receiving Social Security benefits while living abroad, which by definition, means being outside the United States territory for 30 days straight. You must be:
- Eligible for social security payments, and
- Residing in a country where SSA can send payments, specific rules apply to certain countries like Cuba, North Korea and some countries in central Asia
The SSA also provides an online screening tool that helps determine whether you can continue receiving benefits while living in another country.
Can I claim Social Security benefits as a retired non-citizen?
If you are an eligible noncitizen (such as green card holders, refugees, asylees and some visa holders with work authorization) and you live outside the United States for six months straight, you could lose those benefits.
Important: you must live in the U.S. for 183 days (half a year) to maintain permanent residency. Learn more about the Substantial Presence Test here..
What is a Totalization Agreement?
A Totalization Agreement is an international treaty between the United States and several nations designed to prevent workers living outside the U.S. from being taxed twice on the same earnings by both countries. It can also help workers qualify for retirement benefits by combining work credits earned in each country.
The following countries with have Social Security agreements with the U.S.:
- Italy
- Germany
- Switzerland
- Belgium
- Norway
- Canada
- United Kingdom
- Sweden
- Spain
- France
- Portugal
- Netherlands
- Austria
- Finland
- Ireland
- Luxembourg
- Greece
- South Korea
- Chile
- Australia
- Japan
- Denmark
- Czech Republic
- Poland
- Slovak Republic
- Hungary
- Brazil
- Uruguay
- Slovenia
- Iceland
If you are not a citizen and plan to leave or have already left the U.S. for at least 30 days in a row, you must complete this form to inform the SSA.
Can I Collect Supplemental Security Income (SSI) Abroad?
No. You must live in the U.S. to claim SSI.
However, U.S. citizens can receive Social Security Disability benefits while living abroad if they meet certain required criteria. This online screening tool can help determine your eligibility.
You can contact SSA’s Office of Earnings International Operations (OEIO) for assisting your application or managing your benefits.
Will my 401(k) account still be accessible when I live outside of the U.S.?
Yes.
In most cases, your retirement account remains an asset even if you no longer live in the U.S. That said, moving abroad and no longer working for a U.S.-based employer may require changes to your financial and retirement plans. You may not be able to keep contributing to your plan and your new country of residence may also tax future withdrawals.
For these reasons, it would be wise to consult a financial advisor. Here are a few questions that can help guide that conversation:
- Where is my retirement account now?
- Should I keep my account where it is, roll it over, or withdraw it later?
- Can I move my retirement account into a foreign pension fund?
- Should I consider cashing it out?
- How will my account be taxed?
- How will currency exchange rates affect my retirement income?
- Should I keep a U.S. address, bank account, and credit history after moving?
New York City offers a wide range of financial counseling services to residents, click here to learn more, improve your financial literacy, or book a session with a professional.
How do I close my American bank account?
The easiest way to close your U.S.-based bank account is to request a closure by calling the customer service line or by mailing in a written request. You can also visit a branch to speak with a representative for further instructions.
- Before closing your bank account, make sure to clear any outstanding bills or pending transactions to avoid overdrafts and bank fees.
- Transfer or withdraw your remaining balance, cancel any autopay subscriptions linked to the account.
- Download your statements and important documents in case you need them for taxes or record-keeping purposes.
Closing an account usually won’t affect your credit score. However, in some cases, having a long-standing account can boost your credit. Here are some situations that may affect your credit.
Note: Switching banks is usually free, but in some cases you may incur hidden costs such as early account closure fees (if you close your bank account within 90-180 days), wire transfer fees, or foreign transaction fees from one or both countries. Read more about other fees and considerations here.
