Pros and cons of US Social Security pension directly deposited into a Thai Bank account.

[Guitar God]

Is there a withholding tax or a Thai tax liability if I start having my US pension direct deposited into my Bangkok Bank account.

 

I have been having it directly deposited into my US account and the using Wise to transfer it to my Thai account but I have had so many problems and delays with WISE in the past few months I want to cut them out of the loop.

 

For example, if the 3rd falls on a Friday, Saturday or Sunday, usually the money isn't credited to my Thai account until Monday. This last time the transfer (ACH) took a week. The 3rd falls on one of those days about 40% of the time. That's five weeks worth  of delays per year.

 

What I want- The money in my Thai account within a day of two of the 3rd every month. 
What I don't want- The US government withholding 30% of my pension. or having to pay tax on just because it's directly deposited.

 

I receive another pension from another country and they hold back 10% that I either need to file and exemption for or, get it back by filing a tax return.

 

My objectives- Receive my entire amount each month to make sure I always have at least 65K THB in incoming transfers every single month so I can use the income method for a retirement visa. I want the transfers to be on full auto pilot. If I need to pay bills in the US, I'm fine with paying them by other methods or even transferring some back to my US account which I will retain, even though I'll need to pay a  small monthly fee since I won't have direct deposit which avoids that fee).

 

Questions for anyone having their SSA pension direct deposited into their Thai bank:

1). Are you receiving the full amount of your pension (i.e. no withholding)?
2). What is the difference in the exchange rate used for the conversion from the Interbank rate (XE.com etc.). Does the transfer and fees cost more or less than WISE if you've used both methods in the past? How much?
3). Does the direct transfer create any Thai tax liability for you? 

 

4). On which date of the month is the transfer credited to your Thai account? The 3 (or 2nd or 1st if the 3rd is not on a weekend or holiday) or later?

I can't think of a single downside. Can you?

TIA

[cjinchiangrai]

No withholding that I know of but I don't do it for three reasons. 1. We do not know what Thailand is going to do about all of their tax proposals. 2. If the GQP wins, they are likely to cut off foreign payments as their first round of cutting SSA and Medicare. 3. American currency is normally more stable so it is better to save dollars than baht.

 

A fourth might be that if you need to bail for some reason, better to have funds elsewhere and in your own name.

[KhunLA]

USA Soc Sec in not taxable, per tax treaty for USA citizen.  I believe all govt issued pension, ex: military are also exempt ... BUT ... don't quote me, due diligence on your part required if receiving.

 

Company pensions, I'm pretty sure are considered income, and taxable.   Although, if looking at the TH Tax rate & exemptions, if married, they do cover quite a lot, and I think IF I had to pay a tax (I don't) I figured I had something like 670k baht worth of exempt income (if married w/kid), and 120k I think is exempt/below taxable income (?), so that wouldn't leave much to be taxed.  Depending how much you bring in.

 

Having direct deposit is quite convenient, and also gives you your paperwork with ease at extension time.  No need to go through NY or USA brank, as SS will deposit straight to TH bank account.   I use BBL/BkkBank. 

Edited August 11 by KhunLA

[Guitar God]

15 hours ago, cjinchiangrai said:

No withholding that I know of but I don't do it for three reasons. 1. We do not know what Thailand is going to do about all of their tax proposals. 2. If the GQP wins, they are likely to cut off foreign payments as their first round of cutting SSA and Medicare. 3. American currency is normally more stable so it is better to save dollars than baht.

 

A fourth might be that if you need to bail for some reason, better to have funds elsewhere and in your own name.

You do make a very good point for waiting until after November 5th... I do think I'll hold off submitting the 1199-op107 until after the riots after Trump loses again.

My US pension is so small I doubt the Thai government would even try to grab any. If they did, maybe I'd finally qualify for PR in 3 years...
"save money" Sorry, I'm not familiar with that term... save?? You mean like if there was theoretically  money left over at the end of the month or something???...
I own a house here, I'm single and I can't foresee any situation where I'd need to bail out of Thailand, and not have access to my Thai accounts. 

You had some good points for people with different circumstances to consider. Thanks the response.

[Etaoin Shrdlu]

Social Security benefits are exempt from Thai taxation under the US-Thai tax treaty for US citizens. You can have your SS payments transferred directly to your Thai bank account without creating a Thai tax liability if you're American.

 

In order to maximize income that isn't taxable by Thailand, it may make sense to pay US taxes from other sources and not have US taxes deducted from Social Security payments each month. I am not sure if Medicare Part B can be paid from other sources or whether is must be deducted from SS payments, but if it could be paid by something other than SS deductions, that would also help maximize income exempt from Thai taxation.

[Guitar God]

4 hours ago, KhunLA said:

USA Soc Sec in not taxable, per tax treaty for USA citizen.  I believe all govt issued pension, ex: military are also exempt ... BUT ... don't quote me, due diligence on your part required if receiving.

 

Company pensions, I'm pretty sure are considered income, and taxable.   Although, if looking at the TH Tax rate & exemptions, if married, they do cover quite a lot, and I think IF I had to pay a tax (I don't) I figured I had something like 670k baht worth of exempt income (if married w/kid), and 120k I think is exempt/below taxable income (?), so that wouldn't leave much to be taxed.  Depending how much you bring in.

 

Having direct deposit is quite convenient, and also gives you your paperwork with ease at extension time.  No need to go through NY or USA brank, as SS will deposit straight to TH bank account.   I use BBL/BkkBank. 

Thanks for your reply. I just want consistent, reliable transfers. I've already been screwed twice at immigration because of the timing of deposits. They require 65K a month. One year I had well over 65K a month for 11 of the past 12 months but one month my second transfer of the month arrived a couple days into the following month due to weekend/holiday and I had less than 65K that month only, but I had close to 3 million in incoming foreign transfers during those 12 months. 
Immigration- Doesn't matter, denied due to a 3 day delay.

[ChrisP24]

If my goal were to show 65k+ being actually transferred to a Thai bank account during each calendar month without any disruption, then if it were me, I would have everything go to my U.S. bank account during the month, and I would transfer my monthly living expenses of 65k+ on the 1st of each following month.   That way you're not at the immediate effect of any issues with the pension payers or various payment processors.  And if there are any issues, you have the rest of the month to complete the transfer and you also have as a source of funds a month of cash in your  U.S. bank or brokerage account.  

[KhunLA]

54 minutes ago, Guitar God said:

Thanks for your reply. I just want consistent, reliable transfers. I've already been screwed twice at immigration because of the timing of deposits. They require 65K a month. One year I had well over 65K a month for 11 of the past 12 months but one month my second transfer of the month arrived a couple days into the following month due to weekend/holiday and I had less than 65K that month only, but I had close to 3 million in incoming foreign transfers during those 12 months. 
Immigration- Doesn't matter, denied due to a 3 day delay.

Think I've had DD for 3 or 4 years now, and they are consistent, arrive on the 3rd of the month.   Never an issue or delay, even if and during any govt shutdown, as those programs are on auto pilot, and unaffected.

 

Comes directly from the Fed Reserve, which the BBL/BkkBank uses the info for you 'Credit Advise', and one of the docs you need.  Allow at least one week for paper work process at bank.

 

Best if your extension / visa date is near the end of the money, and oops, and you have couple weeks to correct.

 

Really is too easy & convenient.

[mania]

On 8/10/2024 at 6:59 AM, Guitar God said:

I have been having it directly deposited into my US account and the using Wise to transfer it to my Thai account but I have had so many problems and delays with WISE in the past few months I want to cut them out of the loop.

 

Just curious but have you ever tried using Bangkok Bank NY to transfer from your US bank to your Thai bank ( If you have Bangkok Bank account) *** I know it got more difficult for some if their US bank may not provide the International ACH thorough their internet banking*** But was just wondering if it was an option for you

[jas007]

On 8/11/2024 at 12:10 AM, cjinchiangrai said:

No withholding that I know of but I don't do it for three reasons. 1. We do not know what Thailand is going to do about all of their tax proposals. 2. If the GQP wins, they are likely to cut off foreign payments as their first round of cutting SSA and Medicare. 3. American currency is normally more stable so it is better to save dollars than baht.

 

A fourth might be that if you need to bail for some reason, better to have funds elsewhere and in your own name.

I seriously doubt that the GOP would cut overseas SSA payments. Trump has said he would never touch Social Security, and, in any event, what would be the point?  There isn’t that much involved, and many people would simply switch back to having a U.S. direct deposit.  You read too much propaganda.
 

Medicare?  That’s another matter.  There could be changes to that program at some point.

[cjinchiangrai]

2 hours ago, jas007 said:

I seriously doubt that the GOP would cut overseas SSA payments. Trump has said he would never touch Social Security, and, in any event, what would be the point?  There isn’t that much involved, and many people would simply switch back to having a U.S. direct deposit.  You read too much propaganda.
 

Medicare?  That’s another matter.  There could be changes to that program at some point.

Don't tell me you believe the orange conman. Read project 2025. It is all about how to capture public money and goive it to oligarchs.

[jas007]

3 hours ago, cjinchiangrai said:

Don't tell me you believe the orange conman. Read project 2025. It is all about how to capture public money and goive it to oligarchs.

Believe what you want.  My point was that it would be silly to make any retirement decision based on what “might” happen to Social Security.  As I said, there isn’t much money involved and the retirees would raise too much of a stink. 

[jas007]

4 hours ago, cjinchiangrai said:

Don't tell me you believe the orange conman. Read project 2025. It is all about how to capture public money and goive it to oligarchs.

For what it’s worth, I just glanced over the Project 2025 page.  I didn’t see anything about cutting overseas Social Security payments.  I realize the Republicans have proposed raising the full retirement age for future retirees.  That certainly won’t affect anyone currently receiving benefits and probably wouldn’t have much impact on those nearing retirement.

 

Anyway, the country is 35 trillion in debt, so, one way or another, there will be a lot of cuts in the future.  The current game seems to be to inflate away the debt and cheat retirees with phony CPI numbers. Just the other day I read about the decline in the value of the benefits since the year 2000 because the CPI hasn’t kept up with inflation. Housing, food, energy, insurance, medical costs, etc.  

[cjinchiangrai]

2 hours ago, jas007 said:

For what it’s worth, I just glanced over the Project 2025 page.  I didn’t see anything about cutting overseas Social Security payments.  I realize the Republicans have proposed raising the full retirement age for future retirees.  That certainly won’t affect anyone currently receiving benefits and probably wouldn’t have much impact on those nearing retirement.

 

Anyway, the country is 35 trillion in debt, so, one way or another, there will be a lot of cuts in the future.  The current game seems to be to inflate away the debt and cheat retirees with phony CPI numbers. Just the other day I read about the decline in the value of the benefits since the year 2000 because the CPI hasn’t kept up with inflation. Housing, food, energy, insurance, medical costs, etc.  

The debt comes from the nonstop gifts to billionaires, tax cuts and insane military spending. Reagan stole the money first and then started calling it welfare rather than repayment of our loans.

 

Eliminating SSA and Medicare is a central component. Eliminating foreign payments could be done by changing the rules rather than getting a congressional vote.

[jas007]

2 hours ago, cjinchiangrai said:

The debt comes from the nonstop gifts to billionaires, tax cuts and insane military spending. Reagan stole the money first and then started calling it welfare rather than repayment of our loans.

 

Eliminating SSA and Medicare is a central component. Eliminating foreign payments could be done by changing the rules rather than getting a congressional vote.

It might not be so easy to change the “rules” anymore, given the recent Supreme Court case limiting Chevron. Anyway, I’m well aware of the political dynamics.  Reagan started the mess back in 81.  The original idea was to cut taxes so as to “starve the beast.”  That didn’t really work, though, as over the years the political process was gridlocked much of the time and the politicians of both parties found it all too easy to just borrow the money needed for all the government programs. Unfortunately, the Fed enabled it all.  With a 35 trillion dollar debt, the country is now in trouble.  Before long, the interest alone on that debt will be enormous,  Sooner or later, it won’t work anymore.
 

I’m not optimistic that either political party will ever have the will to actually reign in spending.  They often talk a good game, but then nothing happens.  Instead, we get the inflation tax. They don’t call it tax, but it’s a tax just the same.  And it hits the most vulnerable people.