Will the relocation affect my Social Security benefits? | Smart Change: Personal Finance
Retirement means that you are no longer tied to a job, and this could also mean that you are no longer tied to the city you call home. If you want to relocate to enjoy better weather or a reasonable cost of living, you can do so. But the transition brings its hurdles, especially for seniors who are already living on a stable income.
They may wonder how the move will affect their budget, including their Social Security benefits. Fortunately, this does not affect people’s Social Security checks in most cases. However, there are three exceptions discussed below.
Moving to another state may affect the amount of taxes you pay on your benefits
The federal government taxes some benefits for all Social Security recipients if their temporary income — adjusted gross income (AGI), plus any non-taxable benefit and half of the annual Social Security benefit — exceeds $25,000 for unmarried adults or $32,000 for married couples. But things are much different at the state level.
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Only 12 states currently tax Social Security benefits for their residents, and each has its own formula for determining who owes and how much they will pay. While many won’t owe any tax on benefits, those who need to budget for it don’t face surprises at tax time.
Seniors who move from a state that doesn’t tax benefits to another may have to get less each year, while those who move from a state that doesn’t tax benefits to one may not have some extra cash to play with.
It’s a good idea to review how the state you’re moving to handles Social Security benefit taxes to see if you owe anything. Check with the state tax department to find out more. And if you have any questions, contact an accountant who is familiar with the tax laws of your chosen state.
Moving to another country may make you ineligible for benefits
The Social Security Administration pays monthly benefits to eligible people who live abroad in many countries, but there are a few countries for which it will not pay benefits, including:
- North Korea
If you move to one of the countries listed above, you may be able to qualify for an exemption that enables you to claim benefits while you are there. But you may have to agree to more restrictive payment terms. Contact the Social Security Administration to find out more.
If you do not qualify for an exemption, you will not be able to receive Social Security benefits while living in the countries listed above. However, if you later move to another country not on the list above, the Social Security Administration will pay you all benefits you previously withheld and then resume your regular monthly payments.
Moving to another state may affect your Supplemental Security Income (SSI)
Supplemental Security Income (SSI) is a monthly benefit administered by the Social Security Administration, but it is not funded by Social Security taxes. It is available to the blind and disabled, as well as seniors 65 years of age or older who demonstrate a significant financial need.
The maximum federal Social Security benefit for 2022 is $841 per month for a single adult and $1,261 for a couple. But all states, except Arizona, Arkansas, Mississippi, North Dakota, Tennessee, and West Virginia, offer additional Social Security building benefits to their eligible residents.
Seniors who receive SSI benefits can find that their monthly checks either grow or shrink, depending on how the supplement their new state provides compares to that provided by their old state.
Be sure to notify the Social Security Administration
Be sure to update your address and, if necessary, your bank account information, with the Social Security Administration. You can do this from my Social Security account, by calling the Social Security Administration, or by visiting the nearest Social Security office. Do this as soon as possible after you move to avoid disruptions to your benefits.
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