· NextMigrate Team
Retiring Abroad: US Social Security and Medicare Rules
$202.90 a month. That is the standard Medicare Part B premium in 2026 (CMS, 2026). Drop Part B for ten years while you live in Portugal or Mexico. Then come home. You could pay double that premium for as long as you have Part B.
That is the hidden bill this guide is about.
The short answer: As of October 2026, a US citizen can keep getting Social Security in most countries. The main exceptions are Cuba, North Korea and a short list of restricted countries (SSA, 2026). Medicare is different. It generally does not cover health care outside the US (Medicare.gov, 2026). If you drop Part B and sign up later, your premium rises 10% for each full 12-month period you could have had it (Medicare.gov, 2026). And the IRS still taxes your worldwide income.
Your pension travels well. Your health cover does not. Your tax return never leaves.
The rules and numbers at a glance
| Rule | Figure or fact (as of October 2026) | Source |
|---|---|---|
| No payments at all | Cuba and North Korea (Treasury sanctions) | SSA, 2026 |
| Restricted payments | Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan | SSA, 2026 |
| Non-citizens with no exception | Payments stop after 6 full calendar months abroad | SSA, 2026 |
| Currency | Paid in US dollars, no exchange-rate adjustment | SSA, 2026 |
| Medicare abroad | Generally not covered | Medicare.gov, 2026 |
| Part B premium | $202.90 a month standard (up to $689.90 at the highest incomes) | CMS, 2026 |
| Part B late penalty | +10% per full 12-month gap, usually for life | Medicare.gov, 2026 |
| General Enrollment Period | January 1 to March 31; cover starts the next month | Medicare.gov, 2026 |
| Medigap travel emergency | 80% after $250 deductible, first 60 days of a trip, $50,000 lifetime cap | Medicare.gov, 2026 |
| FBAR | Foreign accounts over $10,000 combined at any time | IRS, 2026 |
| Form 8938 (FATCA), single abroad | Over $200,000 at year end or $300,000 at any time | IRS, 2026 |
| Tax deadline abroad | Automatic extension to June 15 | IRS, 2026 |
Social Security: your check usually follows you
If you are a US citizen, you can keep receiving Social Security abroad. You must stay eligible and live in a country where SSA can send payments (SSA, 2026). For most retirees, that covers every country on their shortlist.
Where payments stop
The Treasury bans payments to people living in Cuba or North Korea. A US citizen there gets the withheld money after moving to a country SSA can pay. Seven more countries are restricted, from Azerbaijan to Uzbekistan. SSA can make exceptions, but only under special conditions (SSA, 2026).
If you or your spouse is not a US citizen
A non-citizen who meets no exception loses payments after 6 full calendar months outside the US. To restart them, you must return and stay a full calendar month (SSA, 2026).
Living in a country with a US social security agreement often solves this. The list includes Portugal, Spain, Greece, Italy, France, Ireland and Canada. Mexico, Costa Rica and Panama are not on it (SSA, 2026). Some dependants and survivors must also prove 5 years of US residence. Run your spouse's case through SSA's Payments Abroad Screening Tool before you move.
Getting paid
SSA can pay into a US bank wherever you live. It can also pay into a local bank in countries with an international direct deposit agreement. Mexico, Costa Rica, Panama, Portugal, Spain, Thailand and the Philippines are on the list (SSA, 2026).
Your benefit is set in dollars, with no adjustment for exchange rates (SSA, 2026). If the dollar falls 15% against the euro, your Lisbon rent gets 15% harder to pay. How big a drop could your budget survive?
SSA also mails questionnaires abroad every year or every 2 years. If you do not return yours, your payments stop (SSA, 2026). For more, read our guide to pension and social security portability.
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Free eligibility check →Medicare: the cover that stays home
This is where many plans break. Medicare generally does not pay for care outside the US. In most cases, you pay all the costs yourself (Medicare.gov, 2026).
The rare exceptions mostly involve being in the US when a foreign hospital is closer. Medicare drug plans cannot cover drugs bought abroad (Medicare.gov, 2026). A Medicare Advantage plan may cover some extra care abroad, so ask your plan in writing.
Part A is usually free, so keep it
About 99% of people with Medicare pay no Part A premium (CMS, 2026). SSA takes no premium for it while you live abroad, and it works again when you return (SSA, 2026).
The Part B decision
Part B is the hard choice. You pay $202.90 a month for cover you mostly cannot use abroad. SSA itself says signing up may not suit you if you will be away a long time. It also warns about the 10% penalty if you join later (SSA, 2026).
| Keep Part B | Drop or delay Part B | |
|---|---|---|
| Cost while abroad | $2,434.80 a year at the 2026 standard rate (our calculation) | $0 |
| Cover on trips home | Yes, from day one | None until you re-enroll |
| Penalty later | None | +10% per full 12-month gap, usually for life |
| Restart time | None | Sign up January to March only |
| Medigap access | Options stay open | If you drop it after your 6-month window, Medigap may later cost more or be refused |
What the penalty really costs
Medicare's own example: wait 2 full years and your premium rises 20%. In 2026, that is $243.50 a month instead of $202.90 (Medicare.gov, 2026).
Now take a longer gap. Retire abroad at 65 and come home at 75. Ten full years means a 100% penalty. At 2026 prices, you would pay $405.80 a month (our calculation). The penalty tracks the current premium, so it grows each time premiums grow.
The gap nobody plans for
The second cost is time. Without a Special Enrollment Period, you can only sign up between January 1 and March 31. Cover starts the month after you sign up (Medicare.gov, 2026).
Simply living abroad does not give you one. The only overseas Special Enrollment Period listed is for volunteers serving abroad with a tax-exempt group (Medicare.gov, 2026). Move home in May, and you cannot sign up until January. Part B starts in February. That is about nine months without it.
Why might you come home? Often it is a diagnosis, a fall or a death in the family. Those are the moments you least want a nine-month wait.
Medigap: fine for trips, not for living abroad
Most Medigap plans include foreign travel emergency cover. They pay 80% of billed charges after a $250 yearly deductible. The emergency must start in the first 60 days of a trip. The lifetime limit is $50,000 (Medicare.gov, 2026).
There is a timing trap too. You need Part A and Part B to buy Medigap. Your guaranteed right to buy any policy lasts 6 months from the first month you have Part B and are 65 or older. It happens once. After that, an insurer may refuse you or charge more (Medicare.gov, 2026).
When you move back, you get 2 full months after the month you return to join a drug plan or Medicare Advantage plan (Medicare.gov, 2026).
Taxes: the IRS still counts you
US citizens and green card holders are taxed on worldwide income, wherever they live (IRS, 2026).
Your Social Security can still be taxed
Up to 85% of your benefits may be taxable. It depends on your "combined income" (SSA, 2026):
| Filing status | Up to 50% taxable | Up to 85% taxable |
|---|---|---|
| Single | $25,000 to $34,000 | Over $34,000 |
| Married filing jointly | $32,000 to $44,000 | Over $44,000 |
The foreign earned income exclusion will not help. The IRS treats pensions, annuities and Social Security as unearned income (IRS, 2026). The foreign tax credit can reduce double tax, but only if you file.
FBAR and FATCA in plain English
FBAR (FinCEN Form 114). File it if your foreign accounts together topped $10,000 at any time in the year. Two accounts with $6,000 each count. It is due April 15, with an automatic extension to October 15, and you file it online with FinCEN (IRS, 2026).
Form 8938 (FATCA). This goes with your tax return. Single people living abroad file above $200,000 at year end or $300,000 at any time. Married couples filing jointly file above $400,000 or $600,000. The penalty for not filing can reach $60,000 (IRS, 2026).
Treaties help less than you think
US tax treaties contain a "saving clause." It lets the US tax its own citizens as if the treaty did not exist, with some exceptions. Under certain treaties, US Social Security is exempt from US tax if your country of residence taxes it (IRS, 2026). The details depend on the exact treaty. Your new country may tax you too, so compare countries that don't tax foreign pensions.
Practical steps before you go
- Check your payments. Run yourself and your spouse through SSA's screening tool.
- Set up direct deposit. Keep a US account, or confirm your country is on SSA's list.
- Decide on Part B on paper. Write down your likely return age and run the penalty sum.
- Buy health cover where you will live. Read the pre-existing condition exclusions.
- Match your visa's insurance rule. Compare options with our retirement visa finder.
- List every foreign account. Track each one's highest balance for the FBAR.
- Plan your exit route. Know which January you would sign up for Part B.
Tips by destination
- Portugal, Spain, Greece, Italy. All have a US social security agreement, which helps a non-citizen spouse. See Portugal's D7 visa, Spain's non-lucrative visa or Portugal vs Spain for retirees.
- Mexico, Costa Rica, Panama. No agreement. US citizens are paid, but a non-citizen spouse may face the 6-month rule, depending on their citizenship. Read retiring in Mexico and Panama's pensionado visa.
- Restricted countries. Talk to SSA before you move, not after payments stop.
Still choosing? Start with our best countries to retire abroad.
The emotional side: planning for you at 80
Retiring abroad is an act of hope. More sun, lower costs, a slower life. That hope is worth having.
But the person who signs the Part B form is 65 and healthy. The person who pays the bill may be 78 and worried. Are you planning for both of them?
- If your health changed tomorrow, where would you want treatment?
- Who would fly out to help you, and could they afford it?
- If your partner died abroad, would you stay or come home?
- Is the money saved on Part B worth a nine-month gap?
There are no wrong answers. But unasked questions cost the most. If you are moving after a loss, read moving abroad after losing a spouse.
Common mistakes
- Assuming Medicare works abroad. It generally does not.
- Dropping Part B without a return plan. The penalty usually lasts for life.
- Forgetting the January to March window. Coming home does not restart Part B quickly.
- Treating Medigap as overseas insurance. It covers trip emergencies, up to $50,000 in total.
- Ignoring the SSA questionnaire. No reply means no payments.
- Missing the FBAR. The $10,000 threshold is combined, not per account.
- Forgetting a non-citizen spouse. Their payments follow stricter rules.
When to get a licensed adviser
Get help if your spouse is not a US citizen, or you have foreign pensions or trusts. Get help too if you have missed US returns or FBARs, or you are unsure how a treaty applies. Use a US tax professional with cross-border experience, such as a CPA or enrolled agent. For residency, use a lawyer licensed in your destination. For Medicare choices, your free State Health Insurance Assistance Program (SHIP) can help before you leave.
Frequently asked questions
Can I get Social Security if I live abroad permanently?
Yes, if you are a US citizen and stay eligible. SSA pays in most countries. Payments are blocked in Cuba and North Korea and restricted in seven others (SSA, 2026).
Does Medicare cover me if I retire in Mexico or Portugal?
Generally, no. Medicare usually does not cover care outside the US, and you pay all costs in most cases (Medicare.gov, 2026). You need local or international health insurance.
Should I drop Medicare Part B if I move abroad?
It depends on how long you will stay and whether you might return. Dropping it saves $202.90 a month in 2026. But re-enrolling later adds 10% per full 12-month gap, usually for life. Unless you qualify for a Special Enrollment Period, you can only re-enroll from January to March (Medicare.gov, 2026).
What is the Part B late enrollment penalty?
It is an extra 10% for each full 12-month period you could have had Part B but did not. It is added to every monthly premium, not charged once. For most people, it lasts as long as they have Part B (Medicare.gov, 2026).
Does Medigap cover me overseas?
Only for emergencies, and only partly. Most plans pay 80% after a $250 yearly deductible, if the emergency starts in the first 60 days of a trip. The lifetime limit is $50,000 (Medicare.gov, 2026).
Do I still file US taxes if I retire abroad?
Yes. Citizens and green card holders are taxed on worldwide income. Living abroad gives an automatic extension to June 15, but interest on unpaid tax still runs from April 15 (IRS, 2026).
Your next step
Your Social Security will most likely keep paying you abroad. Your Medicare mostly works only in the US, and a late return to Part B can cost you for life. Make the Part B choice on purpose, with real numbers, before you leave.
Want to see which countries fit your income and health needs? Take our free migration assessment, or compare budgets with our cost of living tool.
This article is general information, not legal or tax advice. Rules and figures change often. Always confirm with SSA, Medicare, the IRS and a qualified adviser before you act.
