AARO Social Security Seminar
On October 14, 2014, AARO hosted a seminar on U.S. Social Security, organized by longstanding AARO Social Security Chair Tom Rose and prepared by a panel from the American Embassy: Hanna Maija Haramo-Defranchi, Operations Supervisor; Pierre Sacrispeyre, Claims Representative; Mary Puse, Service Representative; and Sheela Saint Ange, Claims Representative. The four are with the Federal Benefits Unit in Paris, part of the Frankfurt region which, with London, Manila, Mexico City, Rome and San Jose, is overseen by the Office of International Operations (Baltimore). The panel, coordinated by long-term AARO Social Security Chair Tom Rose, covered a number of issues important to overseas citizens:
MySocial Security online provides an easy way to apply for benefits when you reach retirement age. It:
- estimates retirement and disability benefits
- estimates family benefits if you die
- provides an earnings record
- gives estimated Social Security and Medicare taxes paid
- provides a printable version of your Social Security Statement
While it is a new and user-friendly service, it may not be available to all AARO members because users must be 18 and have:
- a valid E-mail address;
- a Social Security number; and
- a valid U.S. mailing address (including DPO/APO)
They also discussed the “right” age to retire in order to plan for optimum benefits in individual situations. As in most countries, it has become necessary to work longer to receive full benefits (those born in 1960 or later reach full U.S. retirement age at 67).
For example, if the claimant was born between '43 and '54 (eligible for full retirement at 66) and retires at:
- age 62 he/she will receive 75% benefits
- age 66 – 100% benefits
- age 70 - 132% benefits
i.e. you will receive a higher monthly payment if you work past full retirement age.
Many do not realize they can work and still receive benefits (if they retire under the “full retirement” age, they must work less than 45 h/month; if at or after “full retirement age”, there is no limit)
While the panel frequently stressed the fact that they stand ready to help in person at the embassy, they also reminded us it is easy to apply online: www.socialsecurity.gov
Medicare generally does not cover health services received outside the United States. Part A becomes available to you, however, if you return to the United States. No monthly premium is withheld from your benefit payment for this protection.
If you want Part B, however, you must enroll. If you do, Social Security will normally withhold a monthly premium from your payment.
Because Medicare benefits are available only in the United States, it may not be to your advantage to sign up and pay the premium for medical insurance if you will be out of the United States for a long period of time.
The panel cautioned, however that when you do sign up, you will pay a 10 percent higher premium for each 12-month period you could have been enrolled but were not. (AARO advocates that this “penalty” be eliminated for those who have been enrolled in foreign complementary health plans.) AARO has an opinion in our Social Security files from Eileen Terry, former Director of Federal Benefits for Western Europe, that enrollment in a complementary health plan (e.g.: a “mutuelle” in France) qualifies as a private insurance program offered by an employer and thus prevents imposition of the 10% penalty. However, AARO has not yet received confirmation of the application of this exemption to a real case.
Social Security Retirement estimator
This is a convenient, secure, and quick financial planning tool. It provides immediate and accurate benefit estimates, letting you create “What if” scenarios based on different ages and earnings.
It can be accessed at www.socialsecurity.gov/estimator
WEP or Windfall Elimination Provision
If you work for a federal, state, or local government agency, a nonprofit organization or in another country, you may be eligible for a pension based on earnings not covered by Social Security. Such a pension can adversely affect the amount of your U.S. Social Security benefit. The Social Security Administration does not know whether you are eligible for such a pension, and the benefit estimates you have received may not have been adjusted for such a possibility.
There are online WEP calculators to help you estimate your Social Security benefit at http://ssa.gov/international/wep_intro.html
Social Security and taxes
About 1/3 of the people who get Social Security pay income taxes on their benefits.
To learn your situation, visit the Benefit Planner for “Income Taxes and Your Social Security Benefits” at: http://www.socialsecurity.gov/planners/taxes.htm
Alien Tax withholding applies to beneficiaries outside the U.S. who are NOT U.S. citizens or U.S. permanent residents.
There is a Nonresident Alien Tax Screening Tool at: http://ssa.gov/international/AlienTax.html
Residents of the following Tax Treaty Countries are not subject to Alien Tax Withholding: