Retirement means you're no longer tied to a job, and that could also mean you're no longer tied to the city you call home. If you want to move to enjoy better weather or more affordable living costs, you can do that. But moving brings its obstacles, especially for seniors who are already living on a fixed income.
They may wonder how their move will affect their budget, including their Social Security benefits. Fortunately, this doesn't affect people's Social Security checks in most cases. However, there are three exceptions discussed below.
Moving to another state could affect how much you pay in taxes on your benefits
The federal government taxes some of the benefits of all Social Security beneficiaries if their provisional income -- adjusted gross income (AGI), plus any nontaxable interest and half your annual Social Security benefit -- exceeds $25,000 for single adults or $32,000 for married couples. But things are much different at the state level.
Only 12 states currently tax the Social Security benefits of their residents, and each has its own formula for determining who owes and how much they'll pay. While many won't owe any benefit taxes, those who do need to budget for this so they don't face surprises at tax time.
Seniors moving from a state that doesn't tax benefits to one that does may have to get by on less each year, while those moving from a state that taxes benefits to one that doesn't may have some extra cash to play with.
It's a good idea to review how the state you're moving to handles Social Security benefit taxes to find out if you'll owe anything. Check with the state department of taxation to learn more. And if you have any questions, reach out to an accountant who is familiar with your chosen state's tax laws.
Moving to another country could render you ineligible for benefits
The Social Security Administration pays monthly benefits to qualifying people living abroad in many countries, but there are a few countries it won't pay benefits to, including:
- North Korea
If you move to one of the countries above, you may be able to qualify for an exemption that will enable you to claim benefits while living there. But you might have to agree to more restricted payment conditions. Contact the Social Security Administration to learn more.
If you don't qualify for an exemption, you won't be able to receive Social Security benefits while living in the above countries. However, if you later move to another country that's not on the above list, the Social Security Administration will pay you all the benefits it previously withheld and then resume regular monthly payments.
Moving to another state could affect your Supplemental Security Income (SSI)
Supplemental Security Income (SSI) is a monthly benefit administered by the Social Security Administration, but it's not funded by Social Security taxes. It's available to blind and disabled people, as well as seniors 65 or older who demonstrate significant financial need.
The federal maximum SSI benefit for 2022 is $841 per month for a single adult and $1,261 for a couple. But all states, excluding Arizona, Arkansas, Mississippi, North Dakota, Tennessee, and West Virginia, provide additional SSI benefits to their qualifying residents.
Seniors receiving SSI benefits could find that their monthly checks either grow or shrink, depending on how the supplement their new state provides compares to the one their old state offered.
Make sure you notify the Social Security Administration
Make sure to update your address and, if necessary, your bank account information, with the Social Security Administration. You can do this from your my Social Security account, by calling the Social Security Administration, or by visiting your nearest Social Security office. Do this as soon as possible after you've moved to avoid disruptions to your benefits.