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Receiving US Social Security Benefits While Overseas

by Barbara Frew

For US citizens living abroad getting your US social security benefits may or may not be a simple matter. In a few countries you cannot receive US social security payments. For example, the US Treasury bans payments to Cambodia, Cuba, and North Korea. There are additional social security restrictions that prevent you from receiving social security payments if you live in Vietnam or some parts of the former Soviet Union such as the Ukraine. These restrictions do not apply to Russia, Estonia, Latvia, Lithuania, and Armenia. If you live in one of the banned or restricted countries payments will be withheld, but they will be restored once you move to a non-restricted country.

Even if you live in a non-restricted country you may face logistical problems receiving your US Treasury check. Getting your check via the mail may not be the best option. Many foreign postal systems are reliable, but some are not. Assuming the postal system is secure, the banking system in your host country will not be able to process a US check on its own. When you take a US Treasury check to a local bank it will be returned to the United States for clearance. After the US check clearing system has processed the check, it will be mailed back to your host country bank to go through that country’s clearing system. The whole process can easily take three weeks and can cost as much as if you had wired the money to yourself from the United States. On top of that, you still must pay foreign exchange charges.

Another option is to have your social security check deposited directly to a financial institution in the United States and then transfer money to your foreign bank account as needed. If you do this you will have easy access to your money. Your charges will include a wire transfer fee plus the cost of converting US dollars to your host country’s currency. To reduce these costs try to transfer larger amounts less frequently.

You may be able to withdraw funds via an ATM machine overseas if you have a VISA, MasterCard or American Express Debit or Check card that is linked to your US bank account. Be careful here; if your debit or check card is also linked to your credit card account, you may find yourself taking an expensive cash advance if the ATM machine cannot connect with your bank account. Check on fees, including any extra fees for processing overseas transactions, and availability of ATM machines in your location. Finally, make sure your personal identification number is four to six digits long, but not more, and that it is in numbers rather than letters.

There may be another option. The US Federal Reserve Bank of New York and several central banks around the world have agreed to provide an international direct deposit service. This service allows the transfer and conversion of US social security benefits to a foreign bank free of the various charges; the Social Security Administration picks up the tab. The countries that currently participate in this international direct deposit service (also called electronic benefit transfer) are: Argentina, Australia, Canada, France, Germany, Ireland, Italy, Norway, Portugal, Spain, Sweden, and the United Kingdom.

Many other countries offer other forms of electronic transfer. Check with the Social Security Administration about your options in your host country.

For details about social security payments while you are outside the United States, obtain a copy of Social Security Administration Publication No. 05-10137, ICN 480085 by mail from the Social Security Administration or at your nearest US Embassy or Consulate or from their website: http://www.ssa.gov.

Barbara Frew is the author of Personal Finance for Overseas Americans. She has an MBA in finance from George Washington University and has lived in Finland, Russia, and Austria

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