3 Ways Moving Could Impact Your Social Security Benefits and More
Social Security may seem like something set in stone that you get once you retire, but the truth is that the program has many moving parts. Your projected benefit can change every year, for example, based on what you earn, and after you retire, the amount you receive can also change based on the annual cost-of-living adjustment, or COLA. But even those who are familiar with these aspects of Social Security might be surprised to learn that simply moving, even from state to state, may have some effects on your benefit as well. Here are the ways that your Social Security benefits may be impacted.
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Taxation
Let’s get the good news out of the way right up front — moving to another state, or even another country, won’t affect the federal taxation of your Social Security benefits. These rules apply wherever you live, so if you owe federal tax on your benefits living in California, you’ll owe the same federal taxes living in Texas, for example.
That being said, depending on where you move, you still might owe more in taxes on your benefits. This is because a handful of states — 12, to be exact — impose their own taxes to at least some degree on Social Security benefits. Those states are as follows:
Colorado
Connecticut
Kansas
Minnesota
Missouri
Montana
Nebraska
New Mexico
Rhode Island
Utah
Vermont
West Virginia
Missouri and Nebraska, it’s important to note, will be ending their taxation of Social Security benefits after the 2024 tax season.
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SSI Benefits
Supplemental Security Income benefits are a lesser-known part of the Social Security system. In one way, they are totally distinct, because they are funded by the general funds of the U.S. Treasury, rather than the payroll taxes that go towards Social Security retirement benefits. But for Americans with limited resources who are blind, over 65 or with a qualifying disability, SSI benefits are critical. If you are receiving SSI and you move, it’s important to note that your benefits may be affected — not on a federal level, but on the state level. This is because most states supplement SSI benefits, and the amounts they provide are not the same. In fact, these seven states (and U.S. territories) don’t pay any SSI supplement at all:
Arizona
Arkansas
Mississippi
North Dakota
Northern Mariana Islands
Tennessee
West Virginia
Among the states that do supplement SSI payments, the amount can vary greatly. In some cases, this means moving to a different state may actually increase your benefits.
Medicare Benefits
Medicare Parts A and B, also known as “Original Medicare,” cover hospital care and doctor visits everywhere in all 50 states and Washington, D.C.; Puerto Rico; Guam; the U.S. Virgin Islands; American Samoa and the Northern Mariana Islands. However, coverage for Medicare Advantage Plans, or Medicare Part C, may vary from state to state. In other words, you might lose Part C coverage if you move to another state. You’ll have to check with your provider for more details.
If you move overseas, you will likely lose all of your Medicare coverage, Parts A, B, C and D. The exception is very specific medical emergencies including the following:
Emergency services in Canada if you’re traveling between Alaska and another state “without unreasonable delay” and the only nearby hospital is located in Canada
Non-emergency inpatient services in a foreign hospital that is closer to your home than the nearest U.S. hospital that can treat you
Medical care on a ship while in a U.S. port or within six hours of arrival or departure from a U.S. port
You may be able to cover any gaps in coverage with a Medicare Supplement Insurance policy, also known as Medigap insurance. This type of policy can cover things like deductibles, coinsurance and copayments that Medicare itself does not cover. Depending on the policy, it might also provide coverage internationally.
The Bottom Line
Your federal Social Security retirement payments won’t change if you move from state to state, or even from the U.S. to a foreign country. But this doesn’t mean there won’t be any impacts on your overall benefits. For example, you may have to pay more tax on your benefits if you move to a new state, and if you receive SSI payments, those might be adjusted as well. Be sure to check with your insurance provider and the Social Security Administration about any changes in coverage or benefits, particularly if you decide to live abroad. While your federal Social Security payments will remain the same no matter where you are domiciled, your Medicare and/or SSI coverage may change or even vanish.
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