Q: If I retire and move out of the country do I still get Social Security?

Sincerely,  S. S. Stretch

$ ?s answered by Matthew Illian, CFP^®

Dear Mr. Stretch,

As long as your new neighbors aren’t the children of the late Kim Jong-il or the Castro brothers, you should be fine. Seriously, the U.S. government bars payments to North Korea, Cuba, and several former Soviet countries.

Most other countries do not have such limitations. In fact, it is estimated that as many as 40,000 American citizens reside in Costa Rica, and many are retirees who are stretching the purchasing power of their Social Security paychecks.

You will need to research the rules that govern the country where you plan to move. For example, some countries will not allow survivor payments to your widow and dependents, whereas other countries have no such limitations. The Social Security Administration also offers a helpful guide for those who wish to know more.

Now that Social Security has stopped issuing paper checks, you will need to have your payment direct deposited into a bank that accepts these payments. You may want to check with the American consulate if you need some advice on which banks are suitable for such transfers.

A note of caution: By moving overseas, you will be adding currency risk to your retirement plan and so it will be best to be conservative as you plan your expenses. If the US Dollar rapidly loses exchange value, you may find that your Social Security paycheck does not buy as many of those frozen drinks served in a coconut. You know, the tropical drinks served with a mini-umbrella and garnished with a pineapple slice.

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