Forex Articles

If you immigrate to the United States when you're 65 or older, can you draw Social Security benefits just like an American citizen? Under some circumstances the answer is yes. In other cases you can draw your home country's equivalent of Social Security benefits even if you immigrate to the United States. And some immigrants qualify to draw benefits from both countries. Here's an overview of how the rules work.

Most people who immigrate to the United States after they've reached retirement age will not have the 40 U.S. work credits needed to qualify for Social Security unless they worked in the country for a cumulative 10 years when they were younger. However, if you're able to legally work in the United States for a year and a half after arriving and can earn at least $1,260 per quarter, you may qualify to receive prorated U.S. Social Security benefits under a totalization agreement with a country you worked in previously.

A totalization agreement is an arrangement between two countries with similar social security programs that makes sure that workers and their employers don't have to pay social security taxes on the same earnings in two different countries. As workers don't pay into two systems simultaneously, they can't double-dip when claiming benefits, either. It is not necessary to give up citizenship in your home country or to be a dual citizen with both foreign and U.S. citizenship to benefit from a totalization agreement. The benefit requirements pertain to your legal residency status and work history. The United States has these agreements with 25 countries: Australia, Austria, Belgium, Canada, Chile, Czech Republic, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Luxembourg, Netherlands, Norway, Poland, Portugal, Slovak Republic, South Korea, Spain, Sweden, Switzerland and United Kingdom. (For more, see Top Pension Systems in the World.)

Here's an example of how a totalization agreement works in terms of what U.S. Social Security benefits a late-arriving U.S. immigrant might receive. Maria Carmen has lived and worked in Spain most of her life, but when she was younger she spent nine years working for an American company in the United States coordinating a study-abroad program for adults. During that time she earned 36 U.S. Social Security credits for her work, which is not enough to qualify for U.S. Social Security benefits but is enough to make her eligible for benefits under the United States' totalization agreement with Spain (which requires a minimum of six credits).

Spain's requirement for its workers to receive retirement benefits, which it calls a pension, is 15 total years of contributions, at least two of which must have occurred during the last 15 years. Maria Carmen worked for only 12 years in Spain, though, and so also doesn't have enough credits to qualify for Spanish social security. But thanks to the totalization agreement, she can combine her work credits from both countries and receive social security benefits. Without a totalization agreement, she wouldn't qualify for benefits in either country despite her 21 years of paying into the two systems.

When Maria Carmen applies to the U.S. Social Security Administration for retirement benefits, the SSA asks the Spanish government for a record of her Spanish social security contributions and eligibility. The benefit payment she receives is prorated based on her contributions to each system. She might apply for benefits in both countries and see which option gives her the larger monthly payment. If she had enough work credits in one country or both, she could simply claim what she was entitled to under either system without needing to rely on a totalization agreement. ​Learn more about the agreements with each country at the Social Security Administration's totalization agreement page.

What if you earned at least 40 work credits in the United States and qualify for U.S. Social Security but later decide to return to your home country? Citizens of these countries can keep receiving their U.S. benefits no matter how long they are outside the United States: Austria, Belgium, Canada, Chile, Czech Republic, Finland, France, Germany, Greece, Ireland, Israel, Italy, Japan, Luxembourg, Netherlands, Norway, Poland, Portugal, South Korea, Spain, Sweden, Switzerland and United Kingdom. In addition, residents of countries that have a totalization agreement with the U.S. can draw the U.S. Social Security benefits they earned even if they reside outside of the United States long term.

While some immigrants over 65 are eligible to draw Social Security benefits in the United States, a sizeable group is not. Almost everyone who has never received Social Security benefits doesn't have the work credits to qualify, according to a 2011 report from the Social Security Administration. More than 80% of that group consists of immigrants who arrived in the United States at age 50 or older.

Late-arriving immigrants also have a high poverty rate, due to limited income from other s. This group tends to rely on their existing assets and on income from others with whom they live, such as adult children. The United States doesn't have a visa program for retirees, and many late-arriving immigrants come on family-based immigrant visas, which require them to have a family member in the United States who is 21 or older and can support them financially. (For more, see Understanding Social Security Eligibility.)

While you don't have to be a U.S. citizen to qualify for U.S. Social Security benefits, you do have to pay into the system for at least 10 years or have enough credits between the U.S. system and a system in a foreign country with which the United States has a totalization agreement. Your benefits are based on what you earn and whether you've paid into the system for enough years.

If you don't qualify for U.S. Social Security in any way, you still might be able to receive any social security or pensioner's benefits you earned in your former country – if that country's laws allow you to receive benefit payments while residing in the United States. (For more, see How to Retire in the U.S.: The Visas, the Process and How the Green Card Lottery Really Works.)