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.
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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 …….