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Overseas Work? Surprise, You Might Qualify for a National Pension!
Not too long ago I was chatting with an associate who happens to be a Singaporean citizen living in Singapore. He’s working now in Singapore and spent most of his career so far working in Singapore, but he did spend some time working overseas, including in the United States.
“You should see whether you qualify for U.S. Social Security retirement benefits. And whether your spouse qualifies for spousal benefits, too.”
Really? Yes, really! These details are worth checking, and you might be surprised. It turns out he does qualify, so he’ll have a future U.S. dollar retirement income stream from the U.S. Social Security Administration. It won’t be a huge one — on the order of a couple or few hundred U.S. dollars (in 2020 dollars), but of course that’s way better than the zero he assumed.
Many countries have social insurance systems and often require all workers, including visiting foreign workers, to pay into them. They also typically require a minimum number/size of contributions to qualify for benefits, such as retirement benefits. However, many also have social security treaties with other countries that provide for “totalization,” meaning that each system can count contributions to treaty systems in order to total up to the minimum contributions to qualify for benefits. There are other variations, including contribution refunds when foreign workers leave (careful, that might not be wise), spousal and even ex-spousal benefits, inflation adjustments in payouts, international transfer of pension payments to foreign banks, etc.
So let’s consider a hypothetical example: Jackie Tan (no relation to anybody with that name), a citizen of Singapore working and living in Singapore. She is currently 55 years old, and she is a senior risk officer at a bank in Singapore where she has worked for 30 years and counting, mostly in Singapore. However, her company sent her to work overseas on three occasions:
1. In the year 2000, she went to the bank’s New York office. She started working there in November, 2000, and planned to work there for 2 years (until November, 2002). However, the 9/11 terrorist attacks happened, and her bank ended up recalling her to Singapore. She left in February, 2002. She earned about US$80,000 per year annualized, and she was paid twice per month from November 1, 2001, through the end of February, 2002.
2. She ended up with another stint in the U.S., this time in Charlotte, North Carolina. She worked in Charlotte from October, 2010, through March, 2013 — about 2 1/2 years. She averaged US$150,000/year of income.
3. From March, 2015, through March, 2018, she worked in Paris. While there she met the love of her life, a Japanese lady. They married in Paris. Jackie and her Japanese wife moved back to Singapore, her wife on an Employment Pass.
In all these postings Jackie contributed to the social insurance systems in the U.S. and in France. Guess what? Jackie qualifies at least for U.S. Social Security retirement benefits and may also qualify for benefits from the French system. She has 7 years (in the way the U.S. counts) — 28 “credits” — of U.S. Social Security contributions. The U.S. has a social security totalization agreement with France, and so the U.S. Social Security Administration can get her up to the minimum 40 credits required to qualify for a U.S. national pension based on her French contributions.
Moreover, Jackie’s wife, who has never worked in the U.S., qualifies for a U.S. spousal benefit. This is typically 50% of Jackie’s monthly pension. If Jackie should predecease her wife, Jackie’s wife can then end her spousal benefit and switch to Jackie’s pension amount (100%). Spousal qualification rules are a bit more complicated since they can depend on residence and citizenship factors, but in this hypothetical example Jackie’s wife should qualify. She might even still qualify if they separate or divorce, and no, it doesn’t matter that Singapore doesn’t recognize the marriage. The U.S. (and France) do, and that works for these purposes.
These factors can and probably should influence your career decisions, especially if you’re close to qualifying for a benefit from some country or countries. Good luck!
Not too long ago I was chatting with an associate who happens to be a Singaporean citizen living in Singapore. He’s working now in Singapore and spent most of his career so far working in Singapore, but he did spend some time working overseas, including in the United States.
“You should see whether you qualify for U.S. Social Security retirement benefits. And whether your spouse qualifies for spousal benefits, too.”
Really? Yes, really! These details are worth checking, and you might be surprised. It turns out he does qualify, so he’ll have a future U.S. dollar retirement income stream from the U.S. Social Security Administration. It won’t be a huge one — on the order of a couple or few hundred U.S. dollars (in 2020 dollars), but of course that’s way better than the zero he assumed.
Many countries have social insurance systems and often require all workers, including visiting foreign workers, to pay into them. They also typically require a minimum number/size of contributions to qualify for benefits, such as retirement benefits. However, many also have social security treaties with other countries that provide for “totalization,” meaning that each system can count contributions to treaty systems in order to total up to the minimum contributions to qualify for benefits. There are other variations, including contribution refunds when foreign workers leave (careful, that might not be wise), spousal and even ex-spousal benefits, inflation adjustments in payouts, international transfer of pension payments to foreign banks, etc.
So let’s consider a hypothetical example: Jackie Tan (no relation to anybody with that name), a citizen of Singapore working and living in Singapore. She is currently 55 years old, and she is a senior risk officer at a bank in Singapore where she has worked for 30 years and counting, mostly in Singapore. However, her company sent her to work overseas on three occasions:
1. In the year 2000, she went to the bank’s New York office. She started working there in November, 2000, and planned to work there for 2 years (until November, 2002). However, the 9/11 terrorist attacks happened, and her bank ended up recalling her to Singapore. She left in February, 2002. She earned about US$80,000 per year annualized, and she was paid twice per month from November 1, 2001, through the end of February, 2002.
2. She ended up with another stint in the U.S., this time in Charlotte, North Carolina. She worked in Charlotte from October, 2010, through March, 2013 — about 2 1/2 years. She averaged US$150,000/year of income.
3. From March, 2015, through March, 2018, she worked in Paris. While there she met the love of her life, a Japanese lady. They married in Paris. Jackie and her Japanese wife moved back to Singapore, her wife on an Employment Pass.
In all these postings Jackie contributed to the social insurance systems in the U.S. and in France. Guess what? Jackie qualifies at least for U.S. Social Security retirement benefits and may also qualify for benefits from the French system. She has 7 years (in the way the U.S. counts) — 28 “credits” — of U.S. Social Security contributions. The U.S. has a social security totalization agreement with France, and so the U.S. Social Security Administration can get her up to the minimum 40 credits required to qualify for a U.S. national pension based on her French contributions.
Moreover, Jackie’s wife, who has never worked in the U.S., qualifies for a U.S. spousal benefit. This is typically 50% of Jackie’s monthly pension. If Jackie should predecease her wife, Jackie’s wife can then end her spousal benefit and switch to Jackie’s pension amount (100%). Spousal qualification rules are a bit more complicated since they can depend on residence and citizenship factors, but in this hypothetical example Jackie’s wife should qualify. She might even still qualify if they separate or divorce, and no, it doesn’t matter that Singapore doesn’t recognize the marriage. The U.S. (and France) do, and that works for these purposes.
These factors can and probably should influence your career decisions, especially if you’re close to qualifying for a benefit from some country or countries. Good luck!
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