According to the Social Security Administration, nearly 400,000 retired Americans lived abroad in 2013. While that’s not a significant portion of the population, it is a growing trend. As Americans move outside the United States to parts of Asia, Europe, Africa, Central America or elsewhere in order to stretch their retirement benefits, they need to answer some important questions about those benefits before making the move.
To be clear about what is meant by “outside” the United States, let’s start by defining what’s inside the United State. Residents of all 50 states, Puerto Rico, the U.S. Virgin Islands, Guam, the Northern Mariana Islands, the District of Columbia and American Samoa are considered part of the U.S., therefore residing in those places does not constitute living abroad and won’t interfere with your government benefits.
In addition to being physically outside the U.S. to be considered abroad, you must also be outside of the U.S. for at least 30 days in a row. Once you’ve become outside the country, a return stay of at least 30 consecutive days returns you to resident status.
Because we are talking about retirement abroad we must cover medical needs. More than any other group of people, retirees are most likely to need health care at some point. For retired Americans living in country that usually means looking to Medicare for coverage. But, traditional Medicare does not cover benefits outside the United States except in unusual cases for travel purposes. It will pay for inpatient hospital, doctor or ambulance services in a foreign country if:
- a foreign hospital is closer than a U.S. hospital and you are experiencing a medical emergency
- you need specific treatment that is available at a closer foreign hospital (regardless of whether it’s an emergency)
- you are traveling through Canada on a trip between Alaska and another state and the Canadian hospital is closer than a U.S. hospital
- you need medically necessary care while on a ship in territorial waters and less than 6 hours from a U.S. port
Otherwise, retirees moving to a foreign country cannot use Medicare to pay for healthcare while living overseas. This is not to say they shouldn’t have Medicare if they intend to ever return to the United States. Because there are penalties for not carrying coverage and then choosing to have coverage later, it may make sense to pay for at least a Part B policy even if you can’t use it. (Most people already qualify for Part A coverage from paying taxes while they worked.) That leaves them with three remaining options.
- You can buy private coverage. Some countries offer hospital insurance plans. These coverage options work for specific hospitals only and can mean you’ll be paying out of pocket should you have the misfortune of needing care while far from the hospital or affiliated facility.
- In-country medical insurance policy. This policy can fix the problem associated with choice number one in that the policy is not generally limited to one health care facility. This coverage usually follows you all over that particular country but will not cover you if you are outside the country.
- Which brings us to an International medical insurance policy. For those planning to live and travel overseas for an extended period of time, international insurance policies provide cover just about any place you travel, however, they typically don’t cover U.S. travel.
Long-Term Care Insurance
Long-Term Care insurance isn’t a government program but it’s likely to make you scratch you head about coverage so I’ve included it here. Policies vary a great deal from state to state and from insurer to insurer. A policy used in a foreign country may pay for less care than if it were used in the United States. Some countries may offer benefits in English speaking countries but exclude it elsewhere and some policies offer coverage for the short-term (such as the length of time for a trip).
Retirees who decide to move to another country are entitled to collect Social Security. The rules for collecting apply once the retiree has resided outside of the country for 30 days. There are exceptions. You cannot receive payments while in either North Korea or Cuba (the Cuban exception may change with recent changes in our relationship to Cuba) although you can pick up your check in another country. Other countries that the United States won’t send Social Security checks include Cambodia, Vietnam, Armenia, Estonia, Latvia, Lithuania and Russia (though in those places you can apply for an exception).
Social Security has a “Payments Abroad Screening Tool” to help you discover if you can receive SS payments (retirement, disability or survivor’s benefits) outside the U.S., whether the payment will continue indefinitely or stop after six consecutive months or if other restrictions apply.
Supplemental Security Income
Most recipients of disability benefits are not entitled to benefits outside the United States so the benefits cease after 30 days and do not resume again until the recipient has been inside the United States for 30 days. There are, however, exceptions. Dependent children of military personnel and students studying abroad can continue to receive benefits.
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