Social Security Administration Totalization Agreements: What You Need to Know
As globalization continues to shape the world, more and more people find themselves working abroad. However, this can create a dilemma when it comes to retirement benefits, particularly for those who have paid into Social Security in more than one country. Fortunately, the Social Security Administration (SSA) has created totalization agreements with various countries to address this issue.
What are Totalization Agreements?
A totalization agreement is a treaty between the United States and another country that coordinates the Social Security systems of both countries to ensure that workers don`t pay taxes for the same benefit twice. Typically, these agreements cover retirement, disability, and survivor benefits. The agreement ensures that workers who divide their careers between the two countries receive retirement, disability, or survivor benefits from each country based on their combined earnings.
Which Countries have Totalization Agreements with the United States?
As of 2021, the United States has totalization agreements with 30 countries. These countries include Australia, Brazil, Canada, France, Germany, Italy, Japan, Spain, and the United Kingdom. If you have worked or lived in one of these countries, you may qualify for benefits under the totalization agreement.
How Do Totalization Agreements Work?
Under a totalization agreement, a worker who has earned credits in both countries can have their credits combined to determine eligibility for benefits. For example, if you have 10 years of Social Security credits in the United States and five years of credits in the United Kingdom, you may be able to combine your credits to meet the 10-year minimum required to qualify for Social Security benefits.
Additionally, totalization agreements may provide benefits that you would not otherwise be eligible for under one of the countries` Social Security systems. For example, the U.S. Social Security system includes a spousal benefit, while the United Kingdom does not. However, if you are eligible for benefits under the totalization agreement, you may be able to receive a spousal benefit based on your combined earnings in both countries.
How to Apply for Benefits under a Totalization Agreement
To apply for benefits under a totalization agreement, you must first apply for benefits in the country where you currently live or last worked. If you are eligible for benefits under the totalization agreement, the SSA will take into account your credits earned in both countries to determine your benefit amount. To apply for benefits under a totalization agreement, you will need to provide documentation of your work history in both countries, including any years you paid into Social Security.
If you have worked or lived in multiple countries and are concerned about qualifying for Social Security benefits, it is important to understand the totalization agreement between the United States and the country in question. By doing so, you can ensure that you receive the retirement, disability, or survivor benefits you`re entitled to based on your combined earnings. However, navigating the details of these agreements can be complex, so it`s worth consulting with a financial advisor or Social Security specialist to ensure you are maximizing your benefits.