3 Little-Known Facts About Taking Social Security Overseas—Internationalliving.com

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A new report from International Living highlights three often-misunderstood realities of taking Social Security benefits overseas. Retirees can access their benefits from abroad (in multiple ways), and taking Social Security overseas can allow Baby Boomers to not only retire sooner than expected, but also much more comfortably, when based in a place where their dollars stretch.

Busy Beach in Puerto Vallarta, Mexico

We travel around the world on less money than it costs us to stay home

It is not just possible and legal, but it’s also easy for retirees to take a Social Security benefit overseas. And that can transform a retiree’s quality of life for the better.

“As nest eggs get smaller and the buying power of a Social Security check declines, living for less in a good-value locale overseas looks smarter and smarter,” says Jennifer Stevens, Executive Editor, International Living.

“It’s a way to essentially upgrade your retirement. Why suffer on a budget that would require skimping and sacrifice at home, when you could—in the best-value locales overseas—take those funds and watch them expand? So you could live quite comfortably, enjoying perks like regular meals out and travel that you could never afford at home.”

In addition, retirees overseas gain the benefit of an adventure in retirement, the prospect of exploring new places, meeting new people, and enjoying a lifestyle free from the financial worry that so often comes with a retirement in the States on a Social Security income alone.

“Overseas, you can watch your retirement expand,” says Stevens. “Take your Social Security with you to a place like Nicaragua, Malaysia, Mexico, or Peru, and you can bankroll the sort of life you could never afford in the States.”

Here’s what you need to know about retiring abroad on a Social Security check:

1. Retirees CAN take their Social Security Benefits With Them Overseas

“This is a question we at International Living are asked all the time: ‘Can I take my Social Security with me if I retire overseas?’ The answer is unequivocal: YES,” says Stevens. “You can have your check deposited in a local bank account, or—as many folks do—simply continue to have it deposited into your U.S. account and access the funds from abroad via ATM withdrawals.”

Option 1

Open a local bank account overseas, where benefits can be direct-deposited. It’s just the way they’d be deposited in the U.S. However, a resident visa is needed in the new country to do this.

“The drawback is that only certain foreign banks are qualified to accept these direct deposits of U.S. or Canada government benefits, so be sure the chosen local bank is eligible,” says Suzan Haskins, IL Senior Editor, who has lived overseas for almost two decades.

Option 2

Continue to have the benefits direct-deposited into the U.S. bank account, just as they would be if the retiree were based in the States. Then either transfer those funds to any newly opened local bank account overseas and/or access the funds anywhere in the world via debit/ATM card.

Option 3

If U.S. citizens see no need to maintain a U.S. bank account (although if they have associated credit cards, they will want one) there’s another option:

If retirees are not sure yet where in the world they might want to retire but want to travel for a few months to check out a few different places, MasterCard’s Direct Express card may make sense.

Any bank account or credit union account or any financial institution account are needed, no credit check is required, and there are no sign-up fees, monthly account fees, or minimum balance requirement. Once enrolled, federal benefits will be automatically deposited to the card account on the payment date.

2. Going Overseas Can Allow a Social Security Benefit to Grow

In the best-value countries around the world, retirees report living better than at home, for half the price. That's because dollars can go much, much further than they do in the States.

And that means retirees can not only retire better—but often sooner, too.

“One of the pillars of wisdom in the retirement-planning community is to argue that we’d be better off postponing retirement,” says Steve Garfink, Social Security expert and author of Retire in Luxury on Your Social Security. “Each year we postpone is one year less of retirement expense, and one year more for savings to grow.”

That’s good, practical advice—but many aging workers just want to leave the day-to-day grind behind and retire.
“One alternative is to marry a smart Social Security claiming strategy with an International Living lifestyle,” advises Garfink.

A retiree could, for instance, head overseas, spending down savings for a few years while letting their Social Security benefit grow, and then access that larger benefit when they reach 70 years old.

“There are no shortage of fantastic locations where you can live far better for less than in the U.S.,” says Garfink. “These are places where a Social Security check—guaranteed by the U.S. government and adjusted each year for inflation—can go a long way in delivering a life of luxury.

“The ‘claiming strategy’ part comes in because the Social Security rules offer a multitude of options that can be put to work for both an earlier and a more financially secure retirement.”

A lifestyle that back home could cost six figures can be achieved on Social Security income alone in the best-value places overseas.

Take Marcia Gage and her husband Judd. Moving to Puerto Vallarta, Mexico allowed her to quit her stressful job in cold Minnesota and retire early. She says, "Now I have time to indulge in my passions for writing and reading, and enjoy all that this beautiful beach town has to offer.

"Our cost of living in Puerto Vallarta for things like groceries and eating out is about half what we paid in Minneapolis. We've discovered that we can manage living on our Social Security."

And they don't skimp. They live a vacationer's life at the beach for the same price of a frugal existence back home, maximizing life on Social Security benefits.

Theirs is one of thousands of stories of people like them who've chosen to "super charge" their Social Security benefits and retire better and earlier overseas.

3. Live Much Better on Social Security Overseas Than Is Possible at Home

In low-cost retirement destinations outside the United States, Baby Boomers report they can enjoy a genuinely comfortable, low-stress retirement on their Social Security income alone.

The average Social Security benefit is $1,406 or a retired worker—or $2,139 for a couple (with retired worker and spouse). It’s a challenge to stretch that figure in the States, but in good-value locales overseas, it’s not difficult at all.

Expat Rip Rupinski, for instance, rents a one-bedroom apartment three blocks from the beach, in the heart of Puerto Vallarta’s Zona Romántica, in Mexico, for $800 a month. His monthly electric bill averages $19. His expenses fit nicely with his Social Security budget.

Chip McKenney and his wife, Bonny left their home in Florida six years ago to travel, and they haven’t looked back.

“We travel around the world on less money than it costs us to stay home,” Bonny says. “Slow travel helps us live the life we want. It allows us to dig deeper into the communities we visit, and helps us maintain our Social Security budget.

“Our average annual budget over the last six years is $2,200 a month for two. This includes all transportation, rent, utilities, internet, medical insurance, medical and dental costs, groceries, restaurants and entertainment, clothing, mail service, Skype, visas and foreign fees, and a personal allowance.”

When Bartley D’Alfonso began to feel the pinch of trying to live on Social Security in the States, he moved to the highland university town of Cuenca, Ecuador, for a stress-free lifestyle on the same sum.

“It is very comforting to know that I can now occupy my mind with what fun activities I will do daily, rather than how I would try to survive day-by-day if I had stayed back in the U.S.” he says. “Month by month, it was becoming harder and harder to live only on my fixed Social Security benefits and retirement pension. I was feeling trapped, with high anxiety.”

So he sold his Californian condo and bought a newly built condo in Cuenca. “My three-bedroom, three-bathroom, two-story condo cost $115,500 and get this—my annual property tax was $88 in 2015… $55 in 2016…and I paid $44 in 2017...compared to $4,800 annual property taxes back home.

“And talk about having the senior citizen discount kick in. Under Ecuadorian law, all citizens who reach 65 years of age and have a cedula (national identification card) get to enjoy substantial reductions with the expenses of daily living.

“My water bill is discounted by 50%, dropping down to an average monthly fee of $3.85. Every six months I can turn in my receipts and receive a maximum refund of $105 per month for any sales taxes paid, which is deposited directly into my local bank account.”

More information can be found here: Social Security Overseas

Editor's Note: Members of the media have permission to republish the article linked above once credit is given to Internationalliving.com
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About International Living

For 37 years, InternationalLiving.com has been the leading authority for anyone looking for global retirement or relocation opportunities. Through its monthly magazine and related e-letters, extensive website, podcasts, online bookstore, and events held around the world, InternationalLiving.com provides information and services to help its readers live better, travel farther, have more fun, save more money, and find better business opportunities when they expand their world beyond their own shores. InternationalLiving.com has more than 200 correspondents traveling the globe, investigating the best opportunities for travel, retirement, real estate, and investment.

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