retman

OAP,

I agree with your comments and that WEP amount will vary dependent on when social security is taken. The "bend point" at age 62 is the starting point for the WEP calculation. My focus was "attainment of 30 years significant earnings does not have to be completed by age 62 unless retirement and taking social security is taken at 62 to avoid WEP. There is still nothing stopping you continuing to work to age 70 and build years of "significant earnings" to reduce the impact of WEP when you retire and take SS.


FROM THE SSA Website:
If You Choose Delayed Retirement

You decided to wait to age 70 to receive benefits so you could get Delayed Retirement Credits.

Your eligibility year is still 2013.

If your retirement benefits start after your full retirement age (66 years) the benefit increases 8% for each year before age 70 that you delay retirement. If your benefits start at age 70, you get credit for the 48 additional months when you did not get benefits and your monthly benefit will be 32% higher.

Your age 70 retirement benefit is $1,320 ($1,000 x 132% = $1,320). If your full retirement benefit had not been reduced by WEP, your age 70 retirement benefit would have been $1,842. Delaying retirement increased the reduction for WEP from $395.50 to $522.

theOAP

Yes, that all looks familiar, but relates to the example of someone retiring at, say 66 at their FRA, not contributing further to SS after 66, then claiming benefits at 70, with the perhaps unexpected consequences as in my previous reply.

The question remains as to what will be the calculations if the individual remains in work past FRA (66), continues to contribute to SS via FICA, and has less than 30 years of substantial earnings at either ELY or FRA (I fear ELY will still apply) but attains 30 years during the period of working and contributing beyond 66. See the example of 'Jane' in reply #1497 on page 100.

retman

OAP,

My understanding is that if 30 years of substantial earnings is attained after FRA age 66 and then claims benefits at 70, then no WEP will apply. It does not matter that the 30yrs occurred after ELY or FRA.

theOAP

Yes, that agrees with the Factsheet :
"The Windfall Elimination Provision doesn’t apply if: You have 30 or more years of substantial earnings under Social Security."
But again, the general statements in the general pages seem to all have the implied condition of a situation at FRA, whether stated or not. It's hard to know when exactly it is being implied. I would hope the statement from the Factsheet is true regardless of ELY or FRA.

I suppose the only way to confirm the position is to use the Detailed Calculator and create a situation where someone either attains 30 years after FRA (or perhaps more importantly, say, 27 years after FRA vs. 20 years at ELY - will their WEP be reduced?).

retman

Agreed.

I also ran the screening tool questionnaire for WEP on the SSA website under International Programs. About the fourth question in it asks have you got 30 years substantial earnings.It didn't ask for DOB, FRA, ELY. Just have you got 30 years substantial earnings. As soon as you input YES, the tool immediately ends the screening and states no WEP will be applied.

lansbury

Only one thing I think can be said with any certainty. Either things have changed and the Factsheet is now wrong, or the General Pages are wrong, as they seem to contradicted each other as to when the 30 years of payments has to be reached.

theOAP

That's good to know.

(I still wonder about that poor soul with 20 years at ELY and an actual 'stop work' retirement year at age 68. :-) )

lansbury

Unless the calculator hasn't been updated.

I suspect (hope) that if the 30 year requirement had changed in some subtle way one of us would have come across notification of that somewhere.

theOAP

That's always a possibility with SSA.

nearpost1

I was speaking with the dept. of works and pensions today, just wanted to add a couple of data points. I am claiming my state pension later this year and asked if I needed to file a form 2002 (I think it is), to ensure my u.k. state pension is not taxed. Agent told me all pensions are paid in gross, and that the form was unnecessary as they know already that I live abroad. If it’s helpful I should state here that my pension will be paid electronically from dwp to my new Transferwise U.K. personal bank account. I should also add that the pension will start out at £7200 per annum (£140 per week). This is the only income I will receive from the United Kingdom.

The second item pertains to the fact that part of my U.K. pension will be subject to WEP. 11/30ths will be subject to WEP, the other 19/30ths are the result of voluntary contributions. Obviously I will need something in the awards letter to spell this out to the SSA when I collect my pension from them in 2019. The agent explained that I will have to SPECIFICALLY request this breakout of voluntary versus work based units, otherwise no such breakout will be prepared for me,

I am interested to hear if this information is contradictory to the consensus in here.
Thank you all.

MidAtlantic

Out of interest why did you choose to have it paid to Transferwise (presumably a "Borderless Account") rather than direct to your US bank?

Your UK pension will not be subject to WEP, it will be paid in full. It is your US Social Security that has WEP applied to it, and reduced accordingly.

nearpost1

I recently opened an account with Transferwise to take advantage of their favorable exchange rates because I have about £70,000 coming from an inheritance in the U.K. The savings on my pension will be paltry, but since the account is open and big banks are greedy, I will continue to use The Transferwise account. Of course you’re right, The WEP is applied to ones social security, but in my case the “wepable” part of my U.K. pension (50% of the 11/30ths) is the part they will use to reduce my social security payment. Do you have any thoughts on what I wrote? Thanks in advance.

Nutmegger

You can opt to have your UK pension wired directly into your US account by the UK pension authority. No fees, no middlemen, and a good exchange rate.

nearpost1

Thanks Nutmegger. I recall a thread from last year where Pulaski mentioned that the dwp use Citibank to make this work. I also recall Lansbury saying he uses Transferwise. It would be interesting to know who has the better rate. I know Transferwise has a fee, but their exchange rate is excellent.

MidAtlantic

I have no direct experience but I have heard others say that the direct payment (which is managed by Citibank) gives better rates, because they are dealing in large bulk sums, and no fees.

The advantage with Transferwise is that you can hold off converting the funds and only transfer when the rate suits you, but then it is sitting with Transferwise with no interest and questions about the protection that is provided.

When it comes to it for me I will probably choose the direct payment option.