Americans who reside abroad may have complex relationships with the two major U.S. “entitlement” programs, Social Security retirement benefits and Medicare.
An employment history in the U.S. and one or more other countries may create eligibility for pensions in one or more of these countries. This is complicated by the fact that only a couple dozen countries have bilateral agreements with the U.S. that may permit reciprocal recognition of employment in both countries to decide whether a pension has been earned.
The U.S. pensions also provide for spouse, dependent and survivor benefits, but these vary according to the citizenship and/or U.S. residence periods of non-American family members.
The taxation, or not, of U.S. pension income may depend upon bilateral agreements as well.
U.S. Social Security pension amounts reflect average lifetime U.S. earnings and are calculated without being affected by one’s foreign earnings. Under former U.S. law, one’s Social Security benefits were subject to reduction under the Windfall Elimination Provision (WEP) if one had foreign retirement payments, but this law was repealed on January 5, 2025.
With rare and precise exceptions, Medicare provides no health coverage outside the U.S., but anybody with 10 years of contributions to Medicare may receive Part A (hospital costs, excluding doctors) while in the U.S., without premium charges. Part B can be purchased, but enrolling after age 65 incurs a permanent 10% penalty per year of delay except in some cases of accepted employment-related coverage abroad.
AARO's mission is to inform members of the conditions for accessing Social Security and Medicare and to lobby for appropriate changes to that access for Americans living abroad or who return to the U.S.
