I plan to retire soon. I am an American and I expect to get about half my retirement income from Social Security. I have not reached full retirement age. (I'll be 63.) I own a tiny side business that presently makes a few hundred dollars a year.

If I stayed in the US, this side business would have no effect on my Social Security. The income is well below the threshold to not affect my benefits.

But here's my problem: I'm considering moving to another country when I retire. I read in a publication from Social Security that if you live in another country and you own a business, even if you do no work for the business and/or it produces zero income, you are not eligible for Social Security benefits until you hit full retirement age. (Publication 05-10137, "Your Payments While You're Outside the United States", page 14.)

(a) Am I reading this correctly, that having this business that produces maybe $100 per year would mean I would lost all my Social Security benefits? If so, is there something I could do to avoid this? Some rule I can take advantage of?

(b) If there is no way around this, I guess I would have to shut down the business. (I'm not going to give up $20,000+ dollars in Social Security benefits so I can keep my $100 per year business income.) Would I have to eradicate all traces of the business? Like, would I have to close the bank account, shut down my web site, give up my domain name, cancel all accounts with vendors, etc? If the IRS found that I still had an account with, whatever, say a company that sells shipping supplies that I bought from once, could they say that therefore the business still exists and I am not eligible for Social Security? (That seems kind of crazy but who said that laws always make rational sense?)

Let me clarify that I am asking for what is legal, not what I could probably get away with. I don't suppose the IRS would work very hard to track down a business that makes $100 a year, but they might stumble on something and decide to nail me to the wall just for fun.

If it matters, I was thinking of the Philippines or Belize. I understand the answer is likely different if it's a country that the US has a "totalization agreement" with, so let's assume it's not.


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