gpslouis

Here is the letter from Rep. Sarbanes that confirms that, for nearly all situations, the FX rate for WEP is cast in concrete after a US Social Security recipient initiates retiree benefits payments.

https://drive.google.com/open?id=0Bz...W1UVVl5NWxRdnM

morpeth

So do I understand correctly that after 29 years according to this chart the maximum my SS benefit would be reduced is $42 ? is that then related to the 5% figure quoted earlier ?

SO would I be correct in looking at whether to pay 6 years catch up contributions for UK pension, the forecast return ( future benefit payments/pension catch up cost) would need to be calculated " future british pension less the $42/ catch up cost to be paid ?

theOAP

I hate trying to explain WEP!

IF you turn 62 in 2016, and IF your monthly UK pension income is above $856 (after allowing for voluntary contributions), and IF you have 29 years of substantial earnings, then the MAXIMUM amount of WEP will be $42.80 per month. IF your UK pension income is below $856 (after allowing for voluntary contributions) per month, then the WEP deduction, per month, will be less than $42.80.

IF you turned 62 in 2014, the MAX monthly deduction (as above) would be $40.80. IF you will turn 62 in 2018, the MAX monthly deduction is unknown, but assume in the area of $45 per month.

MAX WEP is 50% of foreign pension income, but the MAX FOREIGN PENSION INCOME (for WEP purposes) is capped. For 2016 it's at $856. 50% of $856 is $428, which is the maximum WEP amount for those with 20 or less substantial years of earnings.

So, as lansbury pointed out above voluntary payments to the UK State Pension must use a fraction to determine what part becomes WEP applicable.

Take your UK State Pension amount (paid per week), multiply by 52, then divide by 12. This amount (in dollars) is your monthly UK pension amount for SSA purposes. Multiply the amount by the fraction (total contributions minus voluntary contributions / total contributions) to find the UK State Pension income subject to WEP, and is it above or below $856?

Additional voluntary contributions to the UK SP will effect the fraction. Any other UK pension (from employment, for example) will need to be added to the MAX FOREIGN PENSION INCOME.

lansbury

Use the online WEP Calculator https://www.ssa.gov/planners/retire/anyPiaWepjs04.html and find out what it will be.

morpeth

So just to confirm, that the portion of the UK pension from voluntary contributions not counted for WEP purposes ?

lansbury

correct