As a retiree living outside the United States, you are still entitled to some of the benefits you earned while working there.
SOCIAL SECURITY
Social Security is yours regardless of where you live, and your monthly benefit can be deposited directly into your foreign bank account or a US bank account if you continue to maintain one. To change the bank into which this is deposited see (ssa.gov).
Under most circumstances, one applies for Social Security upon turning 65, although some people elect to take a lower benefit at 62 and others defer it until 70 to get a higher benefit. You also may be entitled to claim benefits on the Social Security account of a current, former, or deceased spouse. Your circumstances will vary and the best way to get information is via the Social Security website (ssa.gov).
MEDICARE
While Social Security moves with you – even if you move overseas, Medicare does not. Still, it makes sense to apply for Medicare as soon as you become eligible, whether or not you plan to use it.
You can enroll in Medicare at anytime after your 65th birthday, but it is advisable to enroll during what is called your Initial Enrollment Period – three months prior to your 65th birthday until three months after your 65th birthday.
In order to enroll, follow the Medicare drop down menu on the Social Security website (ssa.gov) or go directly to the Medicare website (medicare.gov). You can also complete the necessary forms at the Federal Benefits Unit of the US embassy that serves the region in which you live (ssa.gov/foreign).
Medicare has different components, but for the foreseeable future these are available to you only in the United States.
Medicare Part A covers hospital stays. Most people have already paid for this benefit during their working lives via payroll taxes. There is no downside to enrolling and you will still be covered if you return to the United States even if it is only for a visit.
Medicare Part B covers doctor visits and other outpatient services. You pay for it with monthly premiums that start only once you enroll and are usually deducted from your Social Security benefit. You can maintain this coverage even though you are outside the United States if you continue to pay the Part B premium. If you elect not to pay the monthly Part B premium and you want to resume your coverage if and when you return to the US, there is a permanent 10% fee for each year you were eligible for Part B, but did not pay the premium. For the limited number of exceptions to this see (medicare.gov).
Medicare Part D, Medicare Advantage, and Medigap/Medicare Supplement.
These are all private insurance policies and as their availability varies from state to state you must maintain a US address if you want to enroll in any of them. But again, you can only use them within the United States.
SOCIAL SECURITY DISABILITY
Once you start receiving Social Security retirement benefits, you are no longer eligible for Social Security Disability
ONLINE ACCOUNTS
Tracking and maintaining Social Security and Medicare is easier if you sign up for an online account. See ssa.gov and medicare.gov for information.
History
- In 1945, President Harry S. Truman called for a national health insurance fund.
- In 1962, President Kennedy introduced a plan to create a healthcare program for older adults using their Social Security contributions, but it wasn't approved by Congress.
- In 1964, former President Lyndon Johnson called on Congress to create the program that is now Medicare.
- The program was signed into law in 1965.
More information on the evolution of the Medicare Program:
- https://understandingmymedicare.com/learn-more/history-of-medicare/
- Medicare's 50th Anniversary
- https://www.medicareresources.org/basic-medicare-information/brief-history-of-medicare/
- https://en.wikipedia.org/wiki/Medicare_(United_States)
Funding
- There are four separate trust funds. Under Social Security, the Old-Age and Survivor Insurance (OASI) Trust Fund pays retirement and survivor benefits and the Disability Insurance (DI) trust Fund pays disability benefits. These two trust funds are jointly designated as (OASDI).
- For Medicare, the Hospital Insurance (HI) Trust Fund pays for inpatient hospital and related care. The Supplemental Medical Insurance (SMI) Trust Fund is comprised of two separate accounts Part B, which pays for physician and outpatient services and Part D, which covers the prescription drug benefit that began in 2006.
|
Payroll tax rates (in percent) |
OASI |
DI |
OASDI |
HI |
TOTAL |
|
Employer – since 2009 |
5.30 |
0.90 |
6.20 |
1.45 |
7.65 |
|
Employee – 2011 only |
3.30 |
0.90 |
4.20 |
1.45 |
5.65 |
|
Combined Total |
8.60 |
1.80 |
10.40 |
2.90 |
13.30 |
Payroll taxes
- Every American worker (155 million) pays on earnings up to $106,800 (in 2011), but not all pay income taxes. For 2011 only, President Obama signed into law payroll tax relief that reduces the employee’s OASI tax rate by 2% to 4.2%. Employers will continue to pay 6.2% for a combined rate of 10.4% for OASDI. This OASDI tax disappears on earning above $106,800. Social Security taxes are supposed to fund only OASDI benefits. Basically, it’s a forced pension tax.
- The 1.45% Medicare HI tax is paid on all earnings. The self-employed are charged the equivalent of the combined employer and employee tax rates of 13.30% in 2011. In 2013, there will be an increase in the Medicare payroll tax by 0.9% on earned income in excess of $200,000 for individual taxpayers and $250,000 for married couples filing jointly. Employers do not have to match this amount.
- Income tax is different in that money goes to fund all federal programs except Medicare and Social Security. About one-third of those who file federal income tax returns end up owing no federal income tax. In contrast, the top 1% of income earners – who receive 21% of the nation’s reported income pays 30% of the federal income tax. The top 5% pay 60% and the top 50%, pay 97% of federal income tax.
Facts and Figures
Quick Facts about Medicare Plans & Protecting Your Personal Information
http://healthenroller.com/the-facts-about-medicare/
https://www.ncpssm.org/our-issues/medicare/medicare-fast-facts/
https://www.ehealthmedicare.com/about-medicare-articles/facts-about-medicare/
https://www.investmentnews.com/galleries/10-surprising-facts-about-medicare/image/1
Contact the US Federal Benefits Unit serving the country where you reside for advice. They have experience with the problems specific to people residing outside the US, and often are familiar with the specific circumstances of the country where people reside. In addition, they have direct access to the Social Security files. You can find the Federal Benefits Unit serving your location here: ssa.gov/foreign/foreign.htm