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  • Writer's pictureChris Stein, CFP®

How Switching Citizenship May Affect Social Security Benefits

A reader who lives in Spain has some questions about the Social Security benefits she has earned if she were to switch citizenship.

“I am a U.S. citizen who has lived in Spain for nearly twenty years, married to a Spanish citizen. I have just begun to receive a U.S. Social Security pension. My questions are related to the impact if I opt to adopt Spanish citizenship and renounce my U.S. citizenship. (I believe that dual citizenship between these two countries is impossible.) First, would I lose my right to a U.S. Social Security pension? Second, would my current payments simply end, or would I have to pay everything back retroactively that I had ever received from the U.S. Social Security system?”

Yours is a question that we’ve never had before. It’s not a common one, but I think it’s fairly straightforward. I’m about 98% sure of my answer. The reason I’m hedging just a little bit is that Social Security is extraordinarily complex. There might be a one-off rule about renouncing your U.S. citizenship that may impact you.

I don’t believe that’s the case because I can’t imagine Social Security would treat someone who was a U.S. citizen and then became ‘not one’ differently from someone who was not a citizen in the first place. If I discover more to this story, I will follow up in future communication.

To answer you, I’m going to refer to an official document that Social Security publishes called “Your Payments While You Are Outside the United States,” Publication EN-05-10137. It’s a 40-page PDF, but it’s a narrow pamphlet with few words on each page, so it’s not as massive as it may sound.

If we go to page 4, the title is “Conditions for payments to continue while you are outside the United States.” Other parts of this pamphlet address the conditions if you are a citizen. But here it says, “If you are not a U.S. citizen, you must meet the conditions described in this section to continue receiving benefits outside the United States.”

Then there’s a list of ways that you can continue. Number 3 says, “We will continue your U.S. Social Security payments if you are a citizen of one of the countries listed below.” A list of 25 countries follows, mostly in Europe, including Spain. Since Spain is listed, if you are a citizen of Spain – and not a citizen of the United States – you will continue to receive benefits.

A broader list of countries follows (including Mexico, for example) that must meet additional requirements. You might wonder why there are specific rules for these countries; it’s all about treaties. Many treaties have been signed in the past between the United States and other countries to try to coordinate the benefits or coverage in the different retirement systems for citizens of each country.

Over the decades, opportunities have grown for people to work both in the United States and elsewhere. Even within the same company, people get transferred to different countries and contribute to different retirement systems. Whether it’s London, then Texas, then Japan, or wherever, the various countries have come up with rules that try to coordinate all the pieces.

According to the pamphlet, if you have earned your Social Security benefit (which you can do without being a U.S. citizen), they will continue to pay you as a non-citizen of the U.S., but as a citizen of one of the short-listed countries (including Spain).

In your specific case, you started as a citizen of the U.S. But the point is, you have earned a Social Security benefit, and you are becoming a citizen of a country on the approved list.

This is not a general answer that applies to all countries. It answers your specific question about the country of Spain. I believe we have good news in your case: I don’t think you’ll lose your Social Security benefits, and I don’t think you’ll have to pay anything back.

Again, the official document I based my answer on is called “Your Payments While You Are Outside the United States.” Google it (by its title or its reference: Publication EN-05-10137) to read the details.

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