Social Security benefits at 67 while living overseas - Will I face penalties for 11 years abroad?

Good news - there's no penalty for US citizens living abroad when collecting Social Security retirement benefits! I retired to Mexico 7 years ago and had the same concerns. As a US citizen, you're entitled to your full retirement benefits regardless of where you live. The confusion might be because some non-citizens face restrictions, and certain countries (like North Korea) have payment restrictions. Portugal has no such issues. Since you're already at your Full Retirement Age (FRA) of 67, you'll get 100% of your benefit amount. You can absolutely apply online through the regular SSA website - that's what I did. The process was surprisingly smooth. Just make sure you have a way to receive direct deposits either to a US bank account or to certain foreign banks that accept direct deposits from SSA.

my sister lives in England for 20 years and gets her full ss check. no penalty if ur a citizen.

Actually you MIGHT face some penalties depending on your specific situation. If you worked for a foreign employer during those 11 years, you could be subject to the Windfall Elimination Provision (WEP) which might reduce your benefits IF you earned a pension from work not covered by Social Security. Also if you're planning to receive benefits based on a spouse's record AND you receive a foreign pension, the Government Pension Offset (GPO) could affect you. Neither of these are because you lived overseas though - they're about whether you earned non-covered pensions.

The process for applying from overseas isn't as straightforward as some are suggesting. While it's true there's no penalty just for living abroad, you'll need to do one of the following: 1. Apply online IF you have a US mailing address you can use (friend or family) 2. Call the international SSA number: +1-410-965-0160 (expect VERY long wait times) 3. Contact your nearest Federal Benefits Unit - for Portugal, that's the FBU at the US Embassy in Madrid, Spain The FBU route is often fastest, but they're incredibly backlogged since COVID. I recommend starting the process at least 3-4 months before you want benefits to begin. Also, you'll need to complete periodic questionnaires to verify you're still alive and eligible. These are called "proof of life" forms and SSA sends them to overseas beneficiaries. Source: Helped my mother through this process when she moved to Germany.

The REAL problem isn't the application it's the TAXATION!!!! 🤬 Even overseas the IRS will still get their pound of flesh from your SS benefits. I've been in Costa Rica 5 years and STILL have to file US taxes every year and depending on your other income sources, up to 85% of your SS benefits can be TAXABLE. The US is one of only TWO countries that taxes citizens who don't even live there anymore!!!

So if I understand correctly from everyone's responses: 1) No penalty for living abroad as a US citizen, 2) I can apply online using my sister's US address, 3) I need to watch out for tax implications. Did I miss anything else important before I apply next month?

One crucial point I forgot to mention - be prepared for a potential verification interview. SSA has been increasingly conducting these for overseas applicants, especially if you've been out of the country for an extended period. Also, make sure you have proof of your current overseas address handy, as well as documentation of your US citizenship and Social Security Number. The more documentation you have ready, the smoother the process will be.

Actually, let me add that if you've tried calling SSA's international number and can't get through (which is extremely common), I'd recommend trying Claimyr.com. It helped me get through when helping my mom with her overseas benefits situation. They connect you directly to an SSA agent without the usual wait. They have a video demo at https://youtu.be/Z-BRbJw3puU that shows how it works. Saved me literally hours of frustration when dealing with the international benefits unit.

u should also check if Portugal has a totalization agreement with US. this matters if u worked some in both countries

When I helped my dad apply (he's in New Zealand), the biggest headache was the bank information. Not all foreign banks accept US Social Security direct deposits. We ended up keeping his US bank account open just for this purpose. He just transfers money from there to his NZ account monthly.

Thanks everyone for your helpful advice! I feel much more prepared now. I'll keep my US bank account for direct deposits, apply online using my sister's address, and have all my documentation ready in case of a verification interview. So relieved to know there's no penalty just for living abroad! I'll be applying right after my birthday next month.

Just wanted to add one more thing that helped me when I applied from overseas - make sure you have a reliable way to receive any mail from SSA even after you start receiving benefits. They occasionally send important notices about cost-of-living adjustments, tax forms (1099-SSA), or requests for updated information. I use a mail forwarding service in addition to my family's address as backup. Also, if you're planning to travel back to the US at any point, it might be worth scheduling your application for when you're physically in the country - it can simplify any potential in-person requirements. But sounds like you have a solid plan already!

As someone who works with expat benefits, I wanted to add that Portugal is actually one of the easier countries for receiving SS benefits due to the strong banking relationships with the US. Just make sure when you apply online that you clearly indicate you're living overseas permanently - there's a specific question about this in the application. Also, keep records of your Portuguese residence permit or other documentation showing your legal status there, as SSA may request this during their periodic reviews. The online application should work fine with your sister's address, but be prepared that your first payment might take 6-8 weeks longer than domestic applications due to additional verification steps for overseas beneficiaries.

One thing I haven't seen mentioned yet - if you're planning to receive your benefits via direct deposit to your US bank account, make sure to notify your bank that you'll be receiving regular government payments from overseas. Some banks have been flagging these as suspicious activity and temporarily freezing accounts. I learned this the hard way when my first SS payment triggered a fraud alert! A quick call to your bank's international services department before your first payment arrives can save you a lot of headaches. Also, consider setting up online banking alerts so you can monitor the deposits even from Portugal.

One more consideration - since you've been in Portugal for 11 years, you might want to check if you need to report your Social Security benefits on your Portuguese tax return once you start receiving them. Portugal has different tax treaties and rules for US Social Security income depending on your residency status there. Some expats get caught off guard by the tax implications in their country of residence, not just the US side. It might be worth consulting with a tax advisor who understands both US and Portuguese tax law before you start receiving benefits, especially if you have other income sources in Portugal. Better to know upfront than be surprised later!