One of many decisions older adults must make is where to settle down after retiring. While most Americans stay in the U.S., a small number of adventurous people move overseas, at least part-time, to enjoy new experiences, a better climate, and a lower cost of living.
For many, there’s one other strong motive: Family roots. Immigrants to the U.S. and their descendants who have strong ties to their ancestral homelands may consider re-settling there after retiring.
- If you retire to South Korea, you can receive your Social Security or other federal benefits there.
- You'll have to file taxes to both South Korea and the U.S. but tax credits are in place to avoid double taxation.
- There are a number of visa options, and they are relatively simple for retirees to get compared to the permits for those who want to work there.
Among them are some of the estimated 1.8 million Americans with Korean ancestry. If you're one of them, here are the answers to some of the nitty-gritty questions you may have about relocating.
Getting Your Social Security Benefits
As long as you are eligible for U.S. Social Security payments, you can receive them while living in South Korea, no matter how long you are out of the U.S. and regardless of your citizenship. This is because South Korea has a Social Security Totalization Agreement.
(Americans are eligible to receive Social Security payments in all but a few nations. The exceptions, as of 2019, were Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan. Former U.S. residents who are citizens of some other nations also are eligible. The Social Security Administration’s Payments Abroad Screening Tool can answer specific questions.)
According to the Social Security Administration, you can opt to have your benefits mailed to your foreign address or deposited directly into your account at any financial institution in South Korea or the U.S. Deposits in U.S. banks can be accessed by ATM card or wire transfer.
Veterans and Others
Some retirees receive benefits from other federal programs including those administered by the Department of Veterans Affairs, the Office of Personnel Management, the Department of Labor, or the Railroad Retirement Board.
If you're one of them, visit the U.S. Embassy in Seoul or apply for an appointment there via the American Citizen Services appointment system. The U.S. Embassy in Seoul is not a Social Security claims-processing post. The closest claims-processing post is the Federal Benefits Unit in Manila, Philippines. You can email FBU.Manila@ssa.gov for information.
Medicare does not cover health services you receive outside the U.S.
If you continue your Medicare benefits, you can return to the U.S. for treatment. If you are not enrolled, you will pay a 10% higher premium for each 12-month period you could have been enrolled but were not.
Buying a Home in South Korea
South Korea has relatively high housing costs, so many foreigners living there choose to rent instead of buy. That said, foreigners are permitted to purchase real estate there, a privilege that is not possible in every country.
Resident foreigners who want to buy real estate in South Korea are subject to the Foreigner’s Land Acquisition Act and the Registration of Real Estate Act. The transaction must be reported to the appropriate district office within 60 days of signing the purchase contract, and both the property purchase contract and a certified copy of the property registration must be submitted.
You can purchase a home in South Korea if you file a couple of extra pieces of paperwork.
Non-resident foreigners are subject to both those laws plus the Foreign Exchange Transactions Act. In addition to the reporting requirements above, non-residents transferring money to South Korea in order to buy property must report the transaction to a foreign exchange bank. This is done by submitting copies of the appraisal report and the property contract plus a certified copy of the property registration.
Dual Citizenship and Visas
Since 2011, South Korea has recognized permanent dual citizenship of its nationals who satisfy its eligibility requirements. Under its law, anyone holding dual citizenship by birth can hold both citizenships by submitting a pledge to the Minister of Justice. If your conduct in some way dishonors the pledge, you may be forced to choose one nationality.
If you do not have South Korean citizenship and wish to stay in the country, you have a number of visa options. Note: These are the options that apply to most retirees, not to foreigners who want to work in South Korea.
One is the three-month tourist visa, which allows you to stay in South Korea for up to 90 days at a time. It can be renewed at the border. So, you could stay in the country long-term as long as you take a quick trip to China or Japan every three months or less and renew your 90-day visa on the way back.
Another option is the D8 Investment Visa, which can be obtained if you invest at least 100 million won, or about $82,300 in 2019, in South Korean businesses.
You may be eligible for permanent residency if you invest more than $500,000 in South Korea. For those who can afford the initial investment, this option is the easiest way to obtain residency in South Korea.
U.S. citizens traveling or living anywhere abroad can enroll in the Department of State’s Smart Traveler Enrollment Program (STEP), which provides security updates and makes it easier for the nearest U.S. embassy or consulate to contact you or your family in an emergency.
Regardless of nationality, residents of South Korea are subject to South Korean income tax on income earned worldwide. Non-residents are taxed only on South Korean–sourced income. You are considered a resident if you have lived in South Korea for at least one year or if you have a job that would generally require you to live in Korea for more than a year.
If you're a U.S. citizen, you're subject to U.S. income taxes as well. The U.S. and South Korea have a double taxation agreement in place so that you won’t be taxed twice on the same income. You’ll file returns for both countries but use offsetting tax credits that are intended to limit your tax burden to one country.
Tax laws everywhere are complex and change frequently, so it is best to work with a qualified accountant to make sure you have the most favorable outcome possible.