US Tax Support for Americans Retiring Abroad

Retired or Planning to Retire in 2024?

If you are an expat planning your retirement, you need to know that Americans in the US and abroad can gain retiree support benefits from the IRS. But this can only happen if you have paid into your Social Security (SS) account over time.

Determining if you are eligible to receive Social Security benefits will depend largely on your citizenship, residency status, and the agreement the US has with the foreign country you reside in.

The IRS will need coverage in your account (40 credits) or ten years of work that was paid in your SS account to start giving you benefits.

Must-Do for Retirees

If you plan to move abroad and start life as a US retiree, you’ll need to file a few things for the Social Security Administration:

• Change of address
• Divorce of Annulment
• Inability to Manage Funds
• …and more

If you do fail to report changes to the administration, this could result in benefits stopping or overpayment charges. So, it’s best to ensure you share the changes with the SS office as soon as possible.

Payments Stopping?

If you are not eligible to receive SS, any payments from the IRS will stop after you have been living outside the US for six months. But if you live in a foreign country on the Totalization Agreement list, you can still receive SS benefits as a retiring American abroad. Then, however long you’ve been outside the US won’t matter.

Otherwise, if you’re a US citizen living abroad in a country not listed in the Totalization agreement (i.e., restricted countries), they’ll withhold your Social Security payments until you move to a listed country or return to the US.

Retired Widow – Retiree Support

If you are an American abroad who is also a widow (survivor) or a dependent from a deceased taxpayer, you made to meet additional requirements to receive SS benefits and retiree support, like:

• Being a resident in a foreign country for at least five year
• Having authorization to receive benefits from an individual who died working for the US military
• Lived in a country on the Totalization list

Get Your SS Payments Online

You can take advantage of online payments to get faster direct deposits instead of waiting for a paper check in the mail. By having an SS account online, you can prevent future checks from potential theft or misplacement. Abroad, your US Consulate can provide more information regarding relevant Federal Benefits Unit offices closest to you.

Taxable Expat Retirement Benefits

Factually, all Social Security retirement benefits you receive as an American expat may be taxable income on your US taxes. Meaning that no matter where you live in the world as a US citizen or a Green Card Holder, your SS benefits may be subject to taxation.

So plan wisely, we say. SS benefits as retiree support can be up to 85% taxable on your US taxes. Plus, this can bring a tax liability within the country you are living in. It is even more so if there is no clause between your host country and the US on the American Tax Treaty regarding country taxation rights on SS payments.

Having social security benefits does not make you eligible for the FEIE (Foreign Earned Income Exclusion), due to your SS money not being foreign earned.

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