So you’ve decided to work or retire out of the good old USA. How does this affect your Social Security and Medicare benefits? The answer varies by country, and it can work out better for you in some countries versus others.
- About 20 countries have agreements to prevent double taxation. In the rest, you will pay taxes to your host country as well as Uncle Sam.
- About 25 countries maintain bilateral agreements that allow you to transfer Social Security credits to and from the U.S. For example, if you work in the U.S. for 20 years and then move to Canada and work there for another 10 years, when you retire you can transfer your U.S. credits to Canada to vest into their system (or vice versa).
- There are a few countries, such as North Korea and Cuba, where you will not be allowed to receive Social Security benefits while living there.
- Your non-U.S. spouse may or may not be entitled to your benefits if you were to pass. The laws vary by country and are quite complex.
- If you think you will ever move back to the U.S., then it is very important to sign up for Medicare part A, which is free, at age 65. There are ways to opt out of part B if you qualify, but if you do not sign up for part A there are permanent penalties that will persist throughout your retirement.
- If you worked overseas and did not pay into Social Security for certain years, your pension from that country will most likely trigger a Windfall Earnings Provision (WEP) that partially offsets your Social Security benefit.
Determining retirement benefits for expats can be a confusing and complex, with many country-specific rules that change over the years. If you need help navigating Social Security options for expats and their families, reach out to us and let’s get you a plan in place!
Are you a business owner with an at-home spouse who helps out with bookkeeping or other tasks that need to be done? Once you get to retirement age it’s too late, but for those of you in your 20’s, 30’s, 40’s or even 50’s there’s still time to let these efforts build future benefits. Paying your spouse at least $4,880 a year will ensure that they continue to vest into the Social Security system, which will help you at retirement time.
To fully vest you need to earn at least 40 credit hours, with a maximum of 4 credits per year at $1220 per credit. Spouses who are not vested can still pull a half benefit off of their working spouse’s retirement benefit (or ex-spouse’s, if married over 10 years). If widowed after being married a year or more you can draw benefits up to your deceased spouse’s full amount, depending on the age when you decide to file.
If both spouses have work history, the Social Security retirement benefits picture can drastically change for the better. With two vested partners you’ll also have more options, such as the potential for the lower-earning spouse to pull earlier while delaying the higher earning spouse’s filing until age 70 to get the highest benefit. And don’t forget that Social Security disability benefits are hinged on a person working at least five out of the last 10 years, which can help should the worst happen.
As you can see, it’s in your best interest to ensure that the work both partners contribute to your business is recognized as paid employment by the Social Security Administration. We offer a pre-check Social Security planning option that will help you review where you are today and give insight about the impact on future income you can make by ensuring that both spouses are being paid for the work that they do.
Please contact our office to learn more or sign up today to start planning for your retirement.
Parents take care of us for so many years, and in some cases we are able to help our own parents in their retirement. But what will happen if your dependent parent outlives you?
Very few people know about an important Social Security benefit that can help your financially dependent parent should you pass away before they do. If your parent relies on you for more than half of their living expenses, they may be able to receive benefits in the event of your death. In order to take advantage of this benefit you must have earned enough credits to qualify for Social Security – that’s 40 credit hours – and your parent must:
- Receive at least half of their support from you
- Be at least 62 years old
- Not have remarried since the adult child’s death
- Not have an individual Social Security benefit that’s more than the potential benefit based on your earnings
This benefit can be an important source of support for your aged parent in the unfortunate event of your death.
If you’d like to learn more about this or other Social Security benefits that can help your family, please contact our office at firstname.lastname@example.org, or sign up for your Social Security benefit plan today.