International Jobs: How they affect your SS benefits
As business professionals in the U.S. turn to the international arena for additional career options, questions about the realities of working overseas are becoming more frequent. Here, we discuss the impact on your Social Security benefits.
Q: I am a U.S. citizen living in upstate New York. I am 55 years old and have been paying into Social Security since I was a teenager. But I am considering taking a job in Canada. I am worried that this will mess up my future Social Security retirement benefits. What can you tell me about this?
A: It depends. I know that’s a wishy-washy answer, but there are a lot of variables involved in Social Security coverage of international work. The good news is that you will be working in one of only about 20 countries with which the United States has a Social Security treaty agreement. Given the fact that the “global economy” is growing, I expect to see more and more of these agreements. They are specifically designed to help people like you. They improve Social Security protection for people who work in more than one country, and they provide Social Security benefit protection for people who retire and move to another country.
If you will be working for a U.S. company in Canada, and if you will be working there for five years or less, then U.S. Social Security taxes will continue to be deducted from your paycheck. In other words, it will be as if you were still living and working in the United States. But if you will be working for a Canadian company or for a U.S. company in Canada for more than five years, then you will have Canadian Social Security taxes deducted from your paycheck. If the latter situation is true for you, then when you reach retirement age you will collect a U.S. Social Security benefit that will be slightly less than it could have been had you kept working and paying U.S. Social Security taxes up to the time you retire. But that possibly could be offset by any Canadian Social Security benefits you might be due. Consult with Canadian Social Security officials to find out the requirements necessary to receive compensation from them.
Q: I am a U.S. citizen, but I am thinking of taking a job overseas. Will I have to continue paying U.S. Social Security taxes while I work overseas? Will I be able to collect my Social Security benefits someday if I continue living overseas?
A: You did not mention which country you might be moving to and working in. The rules regarding Social Security coverage overseas depend on lots of variables, especially which country we are talking about. As a general rule, U.S. citizens can receive their Social Security benefits almost anywhere in the world. But there are some exceptions. The best I can do is steer you to the Social Security Administration Web site, www.socialsecurity.gov. In the bottom right-hand corner of their home page under “Other Useful Links,” click on “International.” Follow the links for the country in question and you should find your answers.
Q: Just curious: Do other countries have Social Security systems?
A: The answers to the first two questions hint at the answer to your question, which is yes. In fact, almost every country on the planet has a Social Security system of one form or another. Remarkably, most are quite similar to ours with respect to the kinds of benefits offered — generally to retirees and people with disabilities and to widows, widowers and children of deceased parents.