Retiring in Guam: Stay, French Pension, Taxation, Medicare and Retiree Health

The entry rules are those of the United States. France Diplomatie indicates that ESTA, valid for 2 years, allows a tourist or business stay of 90 days at most, with no professional activity or study, and that it is not a right of entry. A visa is required for a stay of more than 90 days, with a medical examination for long-stay visas. The France Diplomatie page describes no visa category specific to retirees, and the USCIS page on working in the United States contains no rule concerning retirees either: routes to lasting settlement go through the federal categories linked to work, study, investment or family. Overstaying the authorised period leads to removal and, generally, an entry ban of several years.

The Guam and Northern Mariana Islands visa waiver programme, with a maximum duration of 45 days, is a scheme separate from ESTA and only concerns the nationalities listed in the federal regulation (8 CFR 212.1), of which France is not one. A lasting residence project is prepared with the French Consulate General in San Francisco, responsible for Guam, and with a specialist immigration lawyer. Registration on the roll of French nationals living abroad is recommended as soon as you settle (see living in Guam).

The social security agreement between France and the United States, signed on 2 March 1987 and in force since 1 July 1988, expressly names Guam in its territorial scope. It coordinates three branches: disability, old age and survivors. Your French pension remains calculated and paid by your pension funds; the agreement organises relations between the two systems for people who have contributed in both countries, with aggregation of periods from six American quarters of insurance.

On the American side, CLEISS reminds us that the Social Security old-age pension requires 40 quarters of insurance, i.e. ten years of work; a quarter is validated from an amount of income revised every year. The full-rate age reaches 67 for people born from 1960, early retirement is possible from age 62 with a reduction of 0.5% per month of anticipation, and deferral up to age 70 increases the pension by 3% to 8% a year depending on the year of birth. A retiree who has never worked in the United States draws their income from their French rights, their savings and any private annuities.

The France-US tax treaty of 31 August 1994 defines in its article 3 the term “United States” as the United States of America, without Puerto Rico, the Virgin Islands, Guam or any other territory or possession (consolidated version published by the French tax administration). Article 18, which allocates the taxation of pensions between the two contracting States, therefore cannot be taken for granted for a retiree settled in Guam, and their situation should be confirmed before departure with the French tax administration, the Guam Department of Revenue and Taxation and the IRS.

On the French side, the tax administration defines tax domicile by the home or main place of stay, the main professional activity and the centre of economic interests; a single criterion is enough, and it recommends systematically contacting the local tax administration when living abroad. A pension of French source paid to a non-resident bears withholding tax applied after a 10% allowance: three bands at 0%, 12% and then 20%, with thresholds revised every year, the 0% and 12% bands being final and the 20% band being creditable against tax. If the retiree no longer has their tax residence in France, they pay neither CSG, CRDS nor Casa on their pension, and a health contribution of 3.2% (basic pension) or 4.2% (supplementary pension) may be withheld as long as they remain attached to a French scheme (CLEISS).

On the territorial and federal side, the IRS explains that Guam has its own income tax system, based on the same laws and rates as those of the United States, that bona fide residents of Guam file their return with the Guam Department of Revenue and Taxation including their income from all sources, and that a mutual agreement procedure exists between the United States and Guam for cases of double taxation. Bona fide resident status requires three tests: sufficient presence (183 days in the year or one of the alternatives provided), a tax home in Guam and a closer connection to the territory than to the United States or a foreign country. The arrangements for eliminating double taxation of a French pension should be confirmed with the Guam Department of Revenue and Taxation and a Franco-American tax adviser who secures the set-up before departure.

CLEISS specifies that the 1987 agreement contains no provision allowing reimbursement of care received in the United States under a French pension: the S1 form does not exist for Guam. For cover on site, two routes are offered: voluntary CFE membership for a French national, or private insurance. The CFE retirees’ plan is for holders of a French basic scheme pension with no professional activity, requires no health questionnaire whatever the age and has a contribution depending on country, age and family composition. It covers care received abroad; cover is immediate if membership takes place before departure or within three months, otherwise a waiting period of three months (under 44) or six months (from age 45) applies. See the glossary entry on the retirees’ plan and the guide retiree health insurance abroad.

For stays in France, a retiree’s care is covered if they receive a pension from a French basic scheme, do not work and show at least 15 years of insurance in France; a hospital stay of more than one month requires prior recognition, and the accompanying spouse is not covered (CLEISS). Worldwide international insurance completes the arrangement; see retirement insurance abroad.

Medicare covers people aged 65 and over. According to CMS, US citizens and qualified immigrants with at least 40 quarters of contributions receive Part A, hospital cover, without a premium. Without enough quarters, Part A can be purchased, with a reduced monthly premium from 30 quarters and a higher one below that. Part B (doctors) involves a monthly premium and an annual deductible, and Part A a hospital deductible, all revised every year. For Part B, permanent residents must show five years of residence.

A French retiree with no permanent resident card or contribution history therefore cannot count on Medicare on arrival and arranges their cover through the CFE or private insurance. Guam’s Medicaid, administered by the DPHSS, is for people assessed as eligible, with a five-year waiting period for many qualified immigrants (CMS): the page healthcare system in Guam details these schemes, and the page healthcare reimbursement in Guam compares the situations.

The Census Bureau publishes the median household income and the share of owner-occupier households. The official sources consulted publish neither a median rent nor a ranking of towns by appeal to retirees; they do, however, document the hazards that matter in choosing an area: typhoons, whose activity peaks from September to November without ruling out the rest of the year (NOAA / NWS Guam), dengue and distance from Guam Memorial Hospital, which is the island’s public hospital. France Diplomatie invites French nationals planning to travel to Guam to consult its travel advice before departure and to register on Ariane: a scouting visit should therefore be organised by consulting this advice and the notices from Guam Homeland Security.

A retiree’s budget also includes health insurance, which is a significant item, and the costs of any medical repatriation. Benchmarks on housing, climate and formalities are in the page living in Guam.

• Choose the immigration route suited to the project, with a specialist lawyer and the Consulate General in San Francisco.
• Have the taxation of the pension estimated by a Franco-American adviser, without presuming that the treaty applies.
• Notify the departure to the pension fund, Assurance Maladie, the CAF and the tax administration.
• Arrange health cover from the day of arrival: CFE, private insurance, then Medicare if the conditions are met.
• Organise medical follow-up: medical file, current treatments and care stays in France.
• Register on the roll of French nationals living abroad and keep proof of residence.

The United States page recalls the rules common to the federal territory, and Expavy compares international health cover suited to retirees.