Can I collect Social Security living abroad?

he Social Security Administration can deposit your benefits directly into an account at a U.S. financial institution regardless of where you live. They can also deposit benefits into a financial institution in any country that has an international direct deposit agreement with the U.S. (check out the SSA list of countries with direct deposit agreements).

In most cases, this means you have options! Let’s look at them in depth:

1. Set up a U.S. bank account that provides low or no foreign transaction fees

• This is usually the best option if you want to keep most of your banking in the U.S. and withdraw small amounts regularly. It’s what we do with our personal day-to-day cash, and we recommend it.

• Which U.S. banks provide checking accounts with no foreign transaction fees? We think the Charles Schwab High Yield Investor Checking Account is best, with the Fidelity Cash Management Account a close second.

• Charles Schwab High Yield Investor Checking Account: no foreign transaction fees, you are reimbursed for all ATM fees, daily ATM withdrawal limit of $1000. FDIC insured. No fees or account minimums. 0.03% APY. Charges for insufficient funds.

• Fidelity Cash Management Account: 1% foreign transaction fee, you are reimbursed for all ATM fees, daily ATM withdrawal limit of $500. FDIC insured. No fees or account minimums. 0.01% APY. No charges for insufficient funds.

2. Use any U.S. bank account and transfer your money abroad when needed using a service

• This is usually the best option if you want to use a foreign bank account and you can transfer larger amounts of money less frequently

• First, let’s address the obvious: why wouldn’t you just ask your bank to make a wire transfer directly to a foreign bank account? Because the fees will be higher, and often much higher. This is particularly true if you’re transferring a large amount at once, say to buy a home in another country. A traditional bank in the U.S. will charge ~$2.50 per ATM withdrawal in a foreign country or 3% per foreign transaction. In addition, you’re likely to be charged a margin on top of the daily currency exchange rate. This can be up to 5% at most major banks. This is all before the fees on the receiving bank’s side – many banks charge something in the range of $15-30 to receive transfers in another currency. This is where alternative money transfer services come in.

• Which services can you use to transfer your money to another country? We recommend Wise for most transfers due to their low fees and transparency. If you’re looking to transfer a large amount ($10,000+) we would also recommend OFX due to their great customer service and advantageous rates for large transfer amounts.

• Wise (link) charges a low fee (usually under 1%) on most transfers and uses the real-market exchange rate. You can look up Wise fees and compare them to other providers at www.wise.com/us/compare (link).

• OFX (link) charges no fees, but uses their own ‘retail’ exchange rates, which are typically worse than the standard mid-market exchange rate. You can look up OFX’s current exchange rates at https://www.ofx.com/en-us/transfer-rates/.

3. Receive benefits into a foreign bank account

• You should use this option if you need or want to keep all your banking in your new country, outside of the U.S. It typically incurs more fees than the two options above.

• Your bank may charge fees to receive an international transfer from the Social Security Administration. This varies depending on the bank and the country, but a typical charge would be 1% or up to $30. If you decide to go this route, we would recommend making a decision on your international bank based on the fees and exchange rates they use to receive transfers in U.S. dollars.