US Social Security for Expats and Foreign Workers

What US Social Security Actually Is (and Is Not)

At its core, US Social Security is a federal social insurance program, not a personal investment account.

It provides:

• retirement income
• disability income
• survivor benefits

It does not operate like:

• a 401(k)
• an IRA
• a private pension
• a savings account

There is no individual “pot” of money with your name on it.

Instead:

• eligibility is earned through work
• benefits are calculated using a formula
• payments are made according to federal law

This distinction matters enormously once someone works internationally.

How Eligibility for US Social Security Is Earned

Eligibility for retirement benefits is based on credits.

The basic rule

To qualify for US Social Security retirement benefits, an individual generally needs:

• 40 credits
• earned through covered employment
• typically equal to 10 years of work

Credits are earned by:

• working in the U.S.
• paying Social Security taxes (FICA)
• earning above minimum thresholds (which change annually)

If someone earns fewer than 40 credits, they are not automatically eligible for retirement benefits under US domestic rules.

This is where international careers complicate things.

What Happens When You Leave the US Before Reaching 40 Credits

This is one of the most common expat questions.

If an individual leaves the US before earning enough credits:

• contributions are not refunded
• credits remain on record
• eligibility is paused, not lost

Those credits:

• do not expire
• remain on the Social Security record
• may become usable later depending on circumstances

However, on their own, fewer than 40 credits do not generate a retirement benefit.

This is where totalization agreements become relevant.

Totalization Agreements: The Bridge Between Systems

The US has entered into Social Security totalization agreements with a number of countries.

These agreements exist to:

• prevent double social security taxation
• help workers qualify for benefits when careers span countries
• coordinate eligibility between systems

They do not:

• increase benefit amounts arbitrarily
• merge pension systems
• allow transfers of funds
• override domestic benefit formulas

Instead, they provide coordination.

Countries With US Totalization Agreements

The US has totalization agreements with many countries, including (non-exhaustive list):

• United Kingdom
• Canada
• Germany
• France
• Italy
• Spain
• Australia
• Japan
• Switzerland
• Netherlands
• Belgium
• Ireland
• South Korea
• Chile
• Norway
• Sweden

Each agreement is country-specific.

The rules for:

• eligibility
• contribution relief
• benefit coordination
  are not identical across agreements.

How Totalization Agreements Help With Eligibility

Under a totalization agreement, an individual may be able to:

• combine US credits with foreign social security credits
• meet minimum eligibility requirements
• receive a partial US benefit
• receive a benefit from the foreign system as well

Important nuance:

• benefits are typically pro-rated
• each country pays its portion
• calculations follow domestic formulas

For example:

• the US calculates a benefit based only on US earnings
• the foreign country calculates its benefit based only on its system

This avoids the “all or nothing” problem for internationally mobile workers.

{{INSET-CTA-1}}

Social Security for Americans Living Abroad

Many Americans are surprised to learn that:

• US Social Security can be paid abroad
• residency outside the US does not automatically stop payments

However, there are rules.

Generally:

• US citizens can receive benefits in most countries
• some restrictions apply by country
• payment methods may vary
• banking logistics matter

Certain countries have limitations, and rules can change.

Social Security Administration (SSA) maintains a list of countries where payments are restricted.

Social Security for Foreign Nationals Working in the U.S.

Foreign nationals working in the US may:

• pay into Social Security
• earn credits
• qualify for benefits later

This depends on:

• visa status
• length of US employment
• whether a totalization agreement applies
• whether the individual later becomes a US tax resident or citizen

Common scenarios include:

• executives on long-term assignments
• professionals on H-1B or L-1 visas
• academics and researchers
• multinational employees rotating countries

In many cases, foreign nationals contribute to Social Security without realising how eligibility works once they leave.

Can Foreign Nationals Receive US Social Security After Leaving?

Often, yes - but not always.

Eligibility depends on:

• whether 40 credits were earned (domestically or via totalization)
• nationality
• country of residence
• treaty and totalization rules
• SSA payment restrictions

In some cases:

• benefits are payable abroad
• in others, payments may be suspended if residency changes

This is a planning issue, not a surprise best handled later.

Why Social Security Matters in Cross-Border Retirement Planning

Social Security rarely exists in isolation.

It often interacts with:

• 401(k)s
• IRAs
• foreign pensions
• state pensions
• employer retirement plans
• survivor benefits
• currency planning
• tax treaties

For globally mobile individuals, understanding Social Security early helps:

• avoid incorrect assumptions
• coordinate retirement income sources
• plan withdrawals more effectively
• avoid over- or under-reliance on one system

Receiving US Social Security While Living Outside the United States

One of the most common assumptions is that US Social Security is only payable if you live in the United States. That assumption is incorrect.

In many cases, US Social Security benefits can be paid to individuals living overseas, but there are important rules that influence:

• whether payments are permitted
• how payments are delivered
• whether payments can be suspended
• how long payments can continue

General rule

• US citizens can receive Social Security benefits in most countries.
• Non-US citizens may also receive benefits abroad, but additional conditions apply.

The Social Security Administration (SSA) maintains a list of countries where payments are restricted or suspended due to legal, regulatory, or diplomatic reasons. These restrictions can change over time.

Key considerations

• Citizenship status matters.
• Country of residence matters.
• Length of time outside the US matters for some non-citizens.
• Certain countries are subject to payment limitations.

Because these rules are not intuitive, many people only discover them after leaving the U.S., which can create unnecessary disruption.

{{INSET-CTA-2}}

How Social Security Payments Are Made Abroad

When Social Security is payable overseas, the SSA typically offers several payment options:

• Direct deposit to a US bank account
• Direct deposit to certain foreign bank accounts (where supported)
• Alternative payment arrangements depending on country

Payment mechanics vary by country and by banking infrastructure.

Important points:

• Currency conversion may occur automatically.
• Exchange rates can affect the amount received locally.
• Local banking fees may apply.
• Changes to residence must be reported to the SSA.

Payment logistics are administrative rather than tax-driven, but they affect real-world cash flow planning.

Taxation of US Social Security for Americans Living Abroad

Taxation is one of the most misunderstood aspects of Social Security in an international context.

US citizens

US citizens remain subject to US tax rules on Social Security regardless of where they live.

Under US law:

• A portion of Social Security benefits may be taxable.
• Taxability depends on total income and filing status.
• Living abroad does not automatically make benefits tax-free.

Foreign tax treatment

Whether Social Security is taxed by the country of residence depends on:

• local tax law
• whether a tax treaty applies
• how that treaty treats social security-type benefits

Some countries tax US Social Security.
Others exempt it.
Some apply partial taxation.
Some tax it only when remitted.

This is country-specific and must be evaluated individually.

How Tax Treaties Affect Social Security Taxation

Income tax treaties often include specific articles addressing:

• pensions
• social security benefits
• government payments

These treaty provisions may:

• assign taxing rights to one country
• prevent double taxation
• define how benefits are classified

For example:

• Some treaties give exclusive taxing rights to the U.S.
• Others give exclusive taxing rights to the country of residence.
• Some allow both countries to tax, with credits applied.

Treaty treatment varies significantly and must be reviewed case by case.

Social Security for Foreign Nationals Who Leave the U.S.

Foreign nationals who worked in the US often ask whether their Social Security contributions were “lost” when they leave.

In many cases:

• Contributions are not refunded.
• Credits remain on record.
• Eligibility depends on credits earned and totalization agreements.

If 40 credits were earned

• Benefits may be payable later.
• Payment eligibility depends on country of residence and SSA rules.

If fewer than 40 credits were earned

• Benefits may still be available via totalization.
• Without totalization, benefits may not be payable.

This is why understanding agreements between countries matters.

Survivor and Disability Benefits in an International Context

Social Security is not only a retirement program.

It also provides:

• survivor benefits
• disability benefits

These benefits:

• may be payable outside the U.S.
• follow separate eligibility rules
• are subject to residency and nationality conditions

Survivor benefits may be payable to:

• spouses
• children
• dependents

Disability benefits may be payable abroad if eligibility criteria are met.

For globally mobile families, these benefits can be an important - and often overlooked - part of financial protection planning.

Common Misunderstandings About Social Security and International Living

Some frequent misconceptions include:

• “My contributions disappear when I leave the U.S.”
• “Social Security stops if I live abroad.”
• “Foreign workers can never receive US benefits.”
• “Treaties merge pension systems.”
• “Social Security replaces private retirement planning.”

None of these statements are universally true.

Social Security operates within a defined legal framework, and outcomes depend on individual circumstances.

Why Social Security Should Be Integrated Into Broader Planning

For internationally mobile individuals, Social Security should be viewed as:

• one component of retirement income
• not a standalone solution

It often interacts with:

• US retirement accounts (401(k), IRA)
• foreign pensions
• state pensions
• tax treaties
• currency exposure
• estate planning
• survivor protection

Ignoring Social Security until retirement can lead to incorrect assumptions and missed coordination opportunities.

Hypothetical International Scenarios

The following examples are hypothetical and provided purely for educational purposes. They do not represent real clients or guaranteed outcomes.

Scenario 1 - American Living Abroad Long-Term

An American citizen works in the US for 12 years, earning more than 40 Social Security credits, then relocates permanently to Europe.

Key considerations:

• Eligibility for Social Security is preserved.
• Benefits may be payable abroad, subject to country rules.
• US taxation rules still apply.
• Local country taxation depends on treaty provisions.
• Currency conversion affects real spending power.

Social Security becomes one component of a multi-currency retirement income plan.

Scenario 2 - Foreign National Working Temporarily in the U.S.

A non-US citizen works in the US for five years, earning 20 credits, then returns home.

Key considerations:

• Contributions are not refunded.
• Credits remain on record.
• Eligibility may be possible through a totalization agreement.
• Without totalization, benefits may not be payable.
• Long-term planning depends on future work locations.

Scenario 3 - Globally Mobile Executive

An executive works across the U.S., UK, and Asia over a 25-year career.

Key considerations:

• Partial eligibility in multiple systems.
• Pro-rated benefits under totalization.
• No transfer of funds between systems.
• Retirement income coordination across jurisdictions.
• Currency planning is critical.

Scenario 4 - Survivor Benefits Across Borders

A US citizen with international residency passes away, leaving a surviving spouse and children living overseas.

Key considerations:

• Survivor benefits may be payable abroad.
• Eligibility depends on citizenship, residency, and SSA rules.
• Payments may be subject to US tax rules.
• Local country tax treatment varies.

Practical Checklist for Expats and Foreign Workers

Before making assumptions about Social Security in an international context, individuals may wish to confirm:

• Whether they have earned 40 US credits.
• Whether a totalization agreement applies.
• Their country of current and future residence.
• SSA payment eligibility for that country.
• How benefits are paid and in which currency.
• Whether US tax applies to benefits.
• Whether local tax applies under treaty rules.
• How Social Security integrates with other pensions.
• Survivor and disability benefit eligibility.
• Long-term retirement location assumptions.

This checklist helps frame discussions but does not replace professional advice.

How Skybound Wealth USA Assists With Cross-Border Planning

Skybound Wealth USA assists individuals with:

• understanding how US Social Security fits into international retirement planning,
• coordinating Social Security with 401(k)s, IRAs, and foreign pensions,
• evaluating totalization agreement implications,
• modelling retirement income across currencies using MoneyMap,
• integrating Social Security into long-term financial planning,
• supporting globally mobile individuals and families as their circumstances evolve.

Any recommendations depend entirely on individual circumstances.

Next Steps

If you would like to better understand how US Social Security interacts with your international career, residency plans, and retirement goals, you may schedule a discussion with Skybound Wealth USA to review your situation in context.

Important Disclosures

This material is provided for general informational purposes only and does not constitute personalised financial, tax, or legal advice. Social Security rules, tax laws, treaties, and eligibility requirements may change over time and vary by individual circumstance. Hypothetical examples are for illustration only and do not represent actual client outcomes. Past performance does not predict future results. Skybound Wealth USA is an SEC-registered investment adviser. Registration does not imply any specific level of skill or training. Please refer to Form ADV Part 2A, Part 2B, and Form CRS for full disclosures.