--- title: "Retirees abroad — Social Security is still taxed" url: https://expattaxabroad.com/who-i-work-with/retirees/ description: "Social Security and pensions count as unearned income abroad, so the exclusion does not shield them — WEP and GPO were repealed in 2025. Book a free call." lang: en --- Skip to content IRS Enrolled Agent · One preparer, every return 48 country guides 48 guides (https://expattaxabroad.com/countries/) Verify at IRS.gov: https://irs.treasury.gov/rpo/rpo.jsf Facebook: https://www.facebook.com/people/Jorge-I-Rivas-ExpatTax/61572578032002/ Instagram: https://www.instagram.com/jrivas0013/ LinkedIn: https://www.linkedin.com/in/jorgeirivas1186sm X: https://x.com/jrivas0013 Who I work with · retirees abroad # Social Security and your pension are not foreign earned income, and the exclusion does not reach them. The Foreign Earned Income Exclusion shields wages, not retirement income. Social Security and pensions are taxed the same way whether you live in the US or abroad — through the combined-income test, at ordinary rates. Two other things retirees get wrong just as often: the Windfall Elimination Provision was repealed in 2025, and Medicare does not travel with you. Book a 15-minute call (https://expattaxabroad.com/book/) Complete Return — $599 ## The three things a retiree's return gets wrong 01 ### The exclusion is assumed to cover it Form 2555 shields foreign earned income — wages and self-employment earnings. Social Security, pensions and investment income are unearned. They are taxed at ordinary rates through the combined-income test regardless of the exclusion. 02 ### WEP and GPO are assumed to still apply Both were repealed by the Social Security Fairness Act, retroactive to benefits payable after December 2023. If a foreign or other non-covered pension used to reduce your benefit, that reduction should already be gone. 03 ### Medicare is assumed to travel with you Original Medicare pays for almost nothing outside the United States. Most retirees abroad need separate international health coverage — this is a planning question, not a tax one, but it belongs on the same call. One more, worth saying: a foreign pension held in a foreign account is reportable on the FBAR and Form 8938 once it crosses the threshold, whether or not any distribution has been taken. ## What's taxed, and what changed Directional facts, not a computation for your return — the exact taxable amount depends on your full combined income. | Combined income, single — 0% taxable below | $25,000 | | --- | --- | | Combined income, single — up to 85% taxable above | $34,000 | | Combined income, married filing jointly — thresholds | $32,000 / $44,000 | | Married filing separately, lived with spouse | $0 base — up to 85% taxable from the first dollar | | Windfall Elimination Provision / Government Pension Offset | Repealed, Jan 2025 | | Nonresident alien withholding on Social Security | 30% flat on 85% of the benefit, unless a treaty reduces it | | Original Medicare (Parts A & B) outside the US | Not covered | Combined income is adjusted gross income plus nontaxable interest plus half your Social Security benefit; these thresholds are not indexed for inflation. A married couple filing separately who lived together at any point in the year gets no base amount. Sources: IRC §86; Social Security Fairness Act (Pub. L. 118-273); SSA International Programs, Nonresident Alien Tax Withholding; Medicare.gov. Checked 28 September 2026. **Expat tax returns →**$599 complete: https://expattaxabroad.com/services/expat-tax-returns/ **Tax planning →**Before a decision, not after: https://expattaxabroad.com/services/tax-planning/ **FBAR / FATCA compliance →**Foreign pension accounts included: https://expattaxabroad.com/services/fbar-fatca-compliance/ **Country guides →**48 countries, treaty by treaty: https://expattaxabroad.com/countries/ ## Questions retirees abroad ask ### Is my Social Security taxable if I live abroad? Usually yes, on the same terms as if you still lived in the US. It is not foreign earned income, so the Foreign Earned Income Exclusion does not reach it — up to 85% is taxed under the combined-income test instead, based on your other income plus half your benefit. ### What happened to the Windfall Elimination Provision? It was repealed, along with the Government Pension Offset, by the Social Security Fairness Act signed in January 2025. The repeal is retroactive to benefits payable after December 2023, and the SSA issued one-time back payments and raised ongoing benefits starting spring 2025 for people it affected — commonly those with a foreign or other non-covered pension alongside US Social Security. ### Will Medicare cover me if I need care abroad? Essentially no. Original Medicare (Parts A and B) pays for almost nothing outside the United States, with a couple of narrow exceptions for specific Canada and cruise-ship situations. Most retirees abroad carry separate international health coverage instead. ### Is my foreign pension tax-deferred the way a 401(k) is? Not automatically. US tax deferral is a US rule, and a foreign pension only gets it where a treaty specifically grants it. Absent that, growth inside the plan can be currently taxable, and the account is still reportable on the FBAR and Form 8938 once it crosses the threshold. ### I renounced US citizenship. Is my Social Security still taxed? Generally yes, but differently: a flat 30% withholding applies to 85% of the benefit for a nonresident alien, unless a specific tax treaty reduces or eliminates it. Which applies depends on the country and needs checking against that treaty rather than assumed. Expat tax returns →: https://expattaxabroad.com/services/expat-tax-returns/ FBAR / FATCA compliance →: https://expattaxabroad.com/services/fbar-fatca-compliance/ US taxes with a foreign spouse →: https://expattaxabroad.com/insights/us-taxes-with-a-foreign-spouse/ Foreign inheritance and US tax →: https://expattaxabroad.com/insights/foreign-inheritance-us-tax/ Every price →: https://expattaxabroad.com/pricing/ Book a free call →: https://expattaxabroad.com/book/ ## Bring your SSA-1099 and pension statements to the call. That, plus where you live and whether you renounced citizenship, is enough to tell you what your return should look like. Book a call: https://expattaxabroad.com/book/ Complete return $599 Prepared and signed by an Enrolled Agent Book a call (https://expattaxabroad.com/book/) ## Structured data ```json { "@context": "https://schema.org", "@graph": [ { "@type": "Person", "@id": "https://expattaxabroad.com/#jorge", "name": "Jorge I. 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