Maximize Your Social Security While Living Overseas

In International Living magazine we often write about how a Social Security check can provide you with a comfortable, even luxurious, lifestyle in a variety of appealing locations around the world.

However, when the time comes to relocate and start your life’s next chapter, it is useful to understand how, exactly, you receive that check, and where.

Let’s get into some of the nuts and bolts of collecting your benefits overseas. While far from an exhaustive list—Social Security is chock full of exceptions and special rules—my goal is to outline the most important ones that will answer many of your questions and get you off to a solid start.

Can I collect my benefits while living anywhere overseas?

Absolutely. (Well, there are a small handful of exceptions, although these are not in places you would want to live. North Korea or Belarus, for example. Did I mention exceptions and special rules?)

Your right to collect your benefits has little to do with where you reside; once you are eligible for them, they are yours so long as you live. In fact—as many are surprised to hear—you still retain your full right to collect your benefits even if you renounce your U.S. citizenship.

What are my options for receiving my benefits?

The Social Security Administration (SSA) doesn’t mail checks anymore. They transfer your benefit to a bank account. You set this up when you first start to collect your benefits, and you can change it at any time by notifying SSA.

The SSA doesn’t mail checks anymore.

Many people who reside overseas elect to continue to use a U.S. bank for this purpose and then transfer funds as needed from that bank to the country where they reside. Others get by using their ATM cards at the machines of certain local banks that offer reasonable transaction fees and exchange rates because of the relationship they may have with various U.S. banks. This is often called a correspondent bank. Most major U.S. banks have one or more correspondent banks in many of the countries you might consider for overseas residence.

Keep in mind that the fees charged by banks vary widely for this kind of transaction, both stateside and overseas. Once you select a place to live overseas it can pay well to find both a U.S. and local bank that minimize the overall transaction fees for international bank-to-bank transfers and credit card and ATM usage.

Will SSA send my benefits directly to a foreign bank?

SSA has one or more correspondent banks in most (though not all) other countries where you might want to live. If you establish a bank account with one of those banks, you can have SSA transfer your money there.

The advantages are that it’s safe, fees are low, and the exchange rates will likely be as good as or better than anywhere else. Why is this generally a good deal? SSA has a relationship with the Federal Reserve, which maintains balances in virtually every major currency in the world—much as the central banks of other countries maintain U.S. dollar reserves. SSA transfers your benefit amount to the Federal Reserve in U.S. dollars and instructs it to transfer the equivalent amount of local currency to your account at your bank in your foreign country of residence. The buy price is essentially the sell price on that date, giving you the best possible rate you can get on the legal market.

SSA estimates that the average beneficiary saves $84 to $360 a year in overall transfer fees through this arrangement. Note however that you must have overseas residence in order to use this method. You don’t need to reside in the country where you receive the payment; you just cannot reside in the U.S. and opt for this method.

You are required to notify SSA of your address when you reside overseas.

While I never heard of anyone who had a problem with their benefits because they failed to do so, one reason this rule is in place is because some people would lose their benefit eligibility if they stop residing in the U.S. This applies mostly to those who receive spouse or survivor benefits and are not U.S. citizens and did not reside in the U.S. for at least five years while married. For instance, let’s say you are receiving your retirement benefit living in Panama where you meet the spouse of your dreams, a Panamanian citizen (who is over 62). Upon getting married, your new spouse cannot receive a spouse or survivor benefit unless you return to the U.S. to live.

Get the details right to assure your Social Security payments are robust when you move. © Noderg/iStock

Suppose this couple met in Panama, then married and resided in the U.S. for less than five years while collecting a spouse benefit. Upon relocation overseas, the spouse would no longer qualify for benefit. If the relocation is not disclosed immediately, upon discovery, SSA can and will claw any overpayments back by withholding from the primary beneficiary’s account. And this could include interest and penalties.

Social Security benefits are excellent proof of income for qualifying for residence overseas.

Once you are collecting benefits you can go online at and set up a “My Social Security” account where you can access and print a declaration from SSA of proof of your current benefit amount.

So long as this meets the minimum requirements for the country in which you seek residence, it is automatic proof of income everywhere. This makes it easy to check that item off the residence application list.

Editor’s Note: In the right spots, you really can live a rich man’s retirement on your Social Security income alone. We explore these options in Retire in Luxury on Your Social Security: The Best Claims Strategy for a Better, Longer, Freer Retirement. Whether you are eligible to receive Social Security benefits now or in the future—whether you are single or married—the proven strategies this book reveals could hand you thousands of extra dollars in Social Security benefits—funds you have to know to ask for. Get your copy here.

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