One of the many decisions older adults must make is where to settle down during retirement. While most Americans stay in the U.S., a small number of adventurous people move overseas – at least on a part-time basis – to enjoy new experiences, a better climate and the possibility of a lower cost of living. There’s another reason to move abroad: family roots – if, for instance, you were born abroad or your parents hail from outside the U.S. In this article we look at what's involved if your heritage lies in South Korea. (For more, see Find the Top Retirement Cities in South Korea.)
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 which nations you are a citizen of (South Korea is one of the countries with which the U.S. has a Social Security Totalization Agreement). Use the Social Security Administration’s Payments Abroad Screening Tool for details pertaining to your specific situation.
According to the Social Security Administration, you can opt to have your benefits mailed to your address in South Korea or deposited directly into the bank account or other financial institution of your choice – in South Korea or the U.S. (or in any country that participates in the Social Security Administration’s International Direct Deposit program). If you choose to have your benefits deposited to a bank in the U.S., you’ll be able to access them using an ATM card or wire transfer while abroad.
For assistance with federal benefits – including those from the Social Security Administration, the Department of Veterans Affairs, the Office of Personnel Management, the Department of Labor and the Railroad Retirement Board – visit the U.S. Embassy in Seoul or apply for an appointment via the American Citizen Services appointment system. Note that the U.S. Embassy in Seoul is not a Social Security claims-processing post; the nearest one is in the Federal Benefits Unit in Manila, Philippines (email FBU.Manila@ssa.gov for information).
Note that Medicare does not cover health services you receive outside the U.S. Medicare benefits are available if you return to the U.S., but you will end up paying a 10% higher premium for each 12-month period you could have been enrolled but were not.
Due to high housing costs, many foreigners living in South Korea choose to rent instead of buy. That being said, foreigners are permitted to purchase real estate, a privilege not possible in every country. Resident foreigners who want to buy property in South Korea are, however, 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.
Non-resident foreigners are subject to the Foreigner’s Land Acquisition Act, the Registration of Real Estate Act and the Foreign Exchange Transactions Act. The same reporting requirements as above apply, plus non-residents bringing capital into South Korea to buy property must report the transaction to a foreign exchange bank. This is done by submitting a copy of the appraisal report, property contract and a certified copy of the property registration.
Since the amended Nationality Act went into effect on Jan. 1, 2011, South Korea has recognized permanent dual citizenship of its nationals who satisfy eligibility requirements under the act. The amended act allows anyone holding dual citizenship by birth (for example, if you were born in the U.S. to South Korean parents) to 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 few visa options. One is the three-month tourism visa, which allows you to stay in South Korea for up to 90 days at a time and can be renewed at the border. Another option is the D8 Investment Visa, obtainable if you invest at least 100 million won (about $92,500 as of 2018) in local businesses inside the country. If you invest more than $500,000 in South Korea, you may be eligible for permanent residency. For those who can afford the initial investment, this option is the easiest way to obtain residency in South Korea. (For more, see Retire in South Korea With $200,000 of Savings?)
U.S. citizens traveling or living abroad are encouraged to 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 and/or your family in case of an emergency.
Residents (regardless of nationality) 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.
Because the U.S. and South Korea have a Double Taxation Agreement in place, you won’t be taxed twice on the same income. You’ll generally file a return in both countries, but you can use offsetting tax credits that essentially limit your tax burden to one country. Tax laws are complicated and change frequently, so it is recommended that you work with a qualified accountant to make sure you have the most favorable outcome possible.
Any move overseas takes a lot of planning for logistics, such as how you’ll receive your federal benefits and what type of visa you’ll need. Aside from these types of details, it’s important to think realistically about what living in a foreign country will be like, even with family ties there. While some older adults enjoy the adventure, others find it pushes them too far beyond their comfort zones. In these instances living abroad on a part-time basis may be a good option. If you have a choice when it comes to moving abroad, it’s a good idea to give careful consideration to your own situation, comfort level, friends, family and healthcare needs before making any decisions.