How does retirement work in the US for non-Americans?

22 Mar 2022 - Category: Blog /
retire usa

Are you thinking about retiring? Is it time to put down your tools and put your feet up?

If you are an immigrant based in the United States you may be wondering how retirement will work for you. Equally, if you are based overseas but you want to retire in the United States, there are a number of things you need to consider before making a move.

For example, will you need a specific retirement visa? What is a totalization agreement and how do they work?

In this blog we’ll be exploring everything you need to know about retirement in the US for non-Americans, including:

  • Retirement visas
  • Social security for immigrants
  • Totalization Agreements
  • Send money home

Is there a retirement visa?

There is no official United States retirement visa. Many countries around the world offer foreigners retirement visas which are sometimes known as ‘silver cards’. However, the US does not have a silver card and has no plans of creating retirement visas.

Nevertheless, non-Americans do have options if they want to retire in the United States. The US government has advice on their official website to help you learn about the retirement planning and pension benefits in the US including how Social Security works, retiring from the civil services, and managing a private pension.

There will be several bureaucratic hurdles you have to overcome but eventually if you follow one of the paths and you have the suitable circumstances, then you should still be able to enjoy your retirement years in an American state of your choosing.

As we will explain, the way you can retire in the US will depend on when you moved to the states, whether you have family ties to US citizens and whether you have worked in the US.

The US government suggest that you consider these important questions before you retire:

  • At what age do you plan to retire?
  • Can you participate in an employer's retirement savings plan? This includes 401(k) plans and traditional pension plans.
  • If you have a spouse or partner, will they retire when you do?
  • Where do you plan to live when you retire? Will you downsize, rent, or own your home?
  • Do you expect to work part-time?
  • Will you have the same medical insurance you had while working? Will your insurance coverage change?
  • Do you want to travel or pursue a costly, new hobby?

Types of Visas

There are three main visa types that may be suitable for non-Americans hoping to retire in the United States.

  • B2 Visa

A B2 visa is a formal Embassy-issued tourist visa open to anyone. Retirees can obtain a B2 visa for 10 years (multiple entry). However, the amount of time that can be spent in the US at any one time is 6 months. With a B2 visa you will not qualify for a social security number, so there are definitely limitations with this type of visa.

  • E2 Visa - Investment Visa

The E2 visa is about investing in American business and creating jobs for Americans. If you want to retire but still work part time or own a business while taking a hands-off approach, this type of visa may be ideal. Investments are usually between $100,000-$250,000.

E2 visa holders can stay in the US for as long as the E2 visa business in which they invested is stable and operational. This visa comes with a social security card and is therefore more practical than a B2 visa.

  • EB5 Investment Visa

By investing $500,000 into a government-approved business, you and your spouse can move to the US and live with a conditional green card. After two years living on this visa you can obtain permanent residency with the potential to receive full US citizenship after five years in the US.

Clearly, this is an option that will not be available to most people considering the size of the investment you need to make. While the EB5 is not a retirement visa, it is an option taken by many wealthy non-Americans who want to retire in the U.S. especially in places like Florida.

Asking these questions will help you prepare for retirement, wherever you choose to retire. Now, let’s take a look at how the retirement process may work for you.

Social security for immigrants

So, if you want to retire in the United States will you be able to qualify for Social Security?

Social Security provides people with a source of income when they retire or they are unable to work. This source of money can also support your legal dependents in the event of your death. In general, Social Security pays benefits that are equal to about 40 percent of your pre-retirement earnings.

However, most people who emigrate to the US in later life have not built up the necessary work credits to qualify for U.S. Social Security unless they worked for at least 10 years in the US when they were younger. The most common solution, for those in qualifying countries, is to make use of a totalization agreement to facilitate your retirement.

Totalization Agreements

One way non-Americans are able to afford to retire in the US is through a totalization agreement also known as International Social Security agreements.

According to the U.S. government’s website for Social Security totalization agreements have two purposes:

  1. “First, they eliminate dual Social Security taxation, the situation that occurs when a worker from one country works in another country and is required to pay Social Security taxes to both countries on the same earnings.
  2. Second, the agreements help fill gaps in benefit protection for workers who have divided their careers between the United States and another country.”

The U.S. has totalization agreements with a number of countries, including:

  • Australia
  • Austria
  • Belgium
  • Brazil
  • Canada
  • Chile
  • Czech Republic
  • Denmark
  • Finland
  • France
  • Germany
  • Greece
  • Hungary
  • Ireland
  • Italy
  • Japan
  • Luxembourg
  • The Netherlands
  • Norway
  • Poland
  • Portugal
  • Slovak Republic
  • Slovenia
  • South Korea
  • Spain
  • Sweden
  • Switzerland
  • The United Kingdom
  • Uruguay

This system has been in place since the late 1970s and has helped many non-Americans retire comfortably in the United States. To learn more about retirement in the United States have a look at the USA.GOV retirement page.

How to send money home

Whether or not you choose to retire in the U.S. you may want to send money home to your family or friends. This is where Small World can help.

Small World is an international money transfer service helping millions transfer funds to their loved ones around the world every day . We offer a number of safe, quick and easy transfer services including bank deposit, mobile wallet, home delivery, cash card reload, cash pickup and mobile top-up.

Your first digital transaction is always free of transfer fees!

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