Retiring Abroad? You'll Want To Make Use Of This Social Security Benefit

When it comes to retirement, there are a lot of different factors to consider. From where you might want to live to how early you should file for Social Security retirement benefits, there can be a lot of different financial aspects to weigh when making your decisions. Some might have even decided that they want to retire abroad. With beautiful locations and a generally cheaper cost of living (depending on where you want to move), retiring abroad can be an enticing opportunity to explore new places in your golden years.

According to data from the Social Security Administration, a whopping 760,000 beneficiaries live abroad, as of June 2024, and receive roughly $7.5 billion in Social Security benefits every year. While not all beneficiaries are exclusively retirees, it does give a good indication of just how many expats are successfully living abroad and still taking advantage of their Social Security benefits at the same time. It's also worth mentioning that the choice to live abroad is becoming increasingly more popular (with estimates indicating that just 500,000 beneficiaries lived abroad in 2016). However, while there can be a lot of perks to living abroad during retirement, a key part of successfully pulling off such a substantial lifestyle change is planning ahead. Retirement planning can be tricky enough without also factoring in an international move. Let's dive into the best ways to prepare for your retirement abroad.

Some of the most important things that a would-be retiree should know is that, first, their Social Security benefits follow them anywhere and that, second, there are a lot of different resources available to them. Brian Quigley, founder of Beacon Lending, explained to Reader's Digest, "If you're considering retiring abroad, the SSA provides resources to help you understand how your benefits might be affected by living in another country, and they can guide you through the necessary steps to ensure you continue receiving your social security payments while living overseas." While definitely a lesser-known benefit, Social Security provides online retirement planning services that can help best prepare you for retirement. This can not only help you calculate how moving abroad might change your benefits amounts, but also help you figure out exactly what your benefits amount will end up being.

It's also important to keep in mind how the country you are moving to might assess your Social Security benefits. For instance, retirees looking to move to destinations like Portugal might need to prove a certain income level in order to qualify for the necessary visas. Ensuring that your combination of retirement income (which hopefully includes a mix of retirement accounts like 401ks or Roth IRAs in addition to Social Security benefits) fulfills the income threshold necessary at your destination country of choice can be especially important. This could also help you decide on when, exactly, to formally retire and accept your benefits since waiting could help you ensure a larger monthly benefits amount.

It's important to mention that, according to an August 2024 CNBC survey, just 11% of not-yet retired workers reported planning on not working at all during retirement (with 52% planning on continuing to work during retirement). This means that more retirees than ever will continue to work in some capacity past their official retirement age. This can have implications on not just the taxes you might owe on your Social Security benefits amount but also on the kind of visa you might need to hold in your chosen retirement country. Many of the retirement-specific visas offered by foreign countries stipulate that the retiree can't work in the country.

In addition to financial considerations and potential visa barriers, it's also worth considering the social and emotional aspects of retiring abroad. From presumably being far away from family and/or friends to potential language barriers to learning a new healthcare system, it can be a lot of change for retirees to get accustomed to. With that said, CNBC's survey found that 32% of retirees ultimately relocated after they retired, with the top reason for moving (at 37%) being finding a place with lower costs of living. Other top reasons included pursuing a better lifestyle (at 31%) and finding a place with better weather (at 21%). Determining your individual priorities can be the key to finding the perfect place for you in retirement.