Social Security and Medicare Overseas: What You Need to Know

Social Security and Medicare Overseas: What You Need to Know
By Suzan Haskins

Do you lose the right to your Social Security retirement benefits when you live overseas?

Absolutely not. You've worked for those benefits and your right to them can't be denied.

Still, this remains one of the biggest questions and myths about retiring overseas.

Typically, when you retire overseas you'll access your Social Security retirement benefits one of two ways. (This applies to both U.S. and Canadian citizens.)

1. Your Social Security can be paid into a bank account in your new home country. (Before you open an overseas account, be sure to find out if that bank is qualified to accept Social Security deposits.)
   
   
2. Or you can have the benefits transferred into a bank account in the U.S. or Canada and then you can access them overseas via cash machine withdrawals or by using internet banking to transfer funds to your local bank account.

(Note: If you are not a U.S. or Canadian citizen but lived, worked, and qualify for Social Security in the U.S. or Canada, there is an extra hoop or two to jump through, but it's easy enough to find that information online at government websites. And if you are collecting SSI or SSSDI you should contact the Social Security Administration to verify.)

When it comes to Medicare, keep in mind that except for very extenuating circumstances, you will not be covered by your U.S. Medicare or your Canadian public health plan when you travel or reside overseas. So you'll need to make some decisions about how you'll cover your medical expenses.

Some expats choose to discontinue Medicare and self-insure in their new overseas home country. This is not recommended because even though medical costs can be vastly less in most overseas markets, you can still rack up hefty expenses if you need a high-tech treatment of some kind.

Others keep their Medicare coverage in the States so they can return home for routine treatment. And if, at some point, they return to the States for good, they'll be fully covered. (Canadians should check with Public Health about their coverage obligations.)

Some expats choose to not only keep Medicare but to join a local public health system or purchase a private insurance plan in their chosen country. Either of these two options can be very affordable.

In Ecuador, for example, a couple can join IESS, the public health system, for $81 a month. In Mexico, you can join the IMSS public health system for a bit less than $400 a year if you are in your 70s.

There are, of course, drawbacks to public health systems. There can be long waits and hospitals and clinics (especially in rural areas) can be understaffed or otherwise inadequate.

That's why a private insurance plan can be an excellent option. One couple I know in Panama—both around 60 years old—spends just over $200 a month for a comprehensive private policy with a low deductible of just $250.

My husband and I have chosen yet another option: an international policy that covers us anywhere in the world, including when we travel back to the States. This is the most expensive option, at about $550 a month, but since we've lived in four different countries in the past 15 years and travel extensively, it's the option that works best for us personally. (And it costs less than half as much as what we'd likely pay for private insurance in the States right now.)

The point of all this is that you have lots of very good options when you move overseas. Not only can you collect your Social Security benefits, but these funds alone can typically afford you a very nice lifestyle.

In most of the destinations we write about at International Living, a couple can live comfortably on about $2,000 a month, including rent and often even including a healthcare plan of some sort.