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Should we wait for citizenship?

Should we wait for citizenship?

Old Jun 21st 2020, 5:36 pm
  #16  
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Default Re: Should we wait for citizenship?

That‘s interesting re SS payments and pensions but I’ve only been working for 5 years, husband will likely qualify as he actually started working for the US company and paying taxes 5months before we moved.
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Old Jun 21st 2020, 8:32 pm
  #17  
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Default Re: Should we wait for citizenship?

This is a reasonable attempt at a good explanation of Social Security offsets such as WEP which get applied to someone who is in receipt of a foreign pension or any pension where the job that created the pension did not require the employee to pay into Social Security.


https://www.creators.com/read/your-s...curity-offsets

The key to understanding the WEP provision is to realize that the word "social" in Social Security means something. Unlike private and other public sector pension plans, there are social goals built into the Social Security program. One of those goals is to raise the standard of living of lower-income workers in retirement. This is accomplished through a benefit formula that is designed to give lower-paid workers a better deal than their more highly paid counterparts. Very low-paid workers could get a Social Security benefit that represents up to 90 percent of their earnings. This percentage is known as a "replacement rate." People with average incomes (the middle class) generally get a 40 percent replacement rate. Higher-income people get a rate around 30 percent.
The problem is that if you spend the bulk of your working life not paying into Social Security, you are automatically treated as a low-income person by the Social Security Administration's computers. That's because there are "zeros" on your Social Security earnings record for every year you spent in your non-Social Security job. SSA's records won't show that you were actually working at the other job and earning another pension. Instead, your Social Security earnings record simply shows gaps in your work history. So when figuring your Social Security retirement benefit, SSA's computers automatically use the formula intended to compensate a lower income person.
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Old Jun 22nd 2020, 12:52 pm
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Default Re: Should we wait for citizenship?

Originally Posted by durham_lad View Post
This is a reasonable attempt at a good explanation of Social Security offsets such as WEP which get applied to someone who is in receipt of a foreign pension or any pension where the job that created the pension did not require the employee to pay into Social Security. .....
To which I would add for context, that the "target" of WEP is primarily government employees, both federal and state, who generally have their own retirement schemes and are exempt from paying into Social Security, so anyone who spends part of their career working for the government and part working in the private sector, will be subject to WEP because they have retirement income that was derived from employment income on which SS contributions were not charged.
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Old Jun 28th 2020, 1:29 am
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Default Re: Should we wait for citizenship?

Originally Posted by Pulaski View Post
To which I would add for context, that the "target" of WEP is primarily government employees, both federal and state, who generally have their own retirement schemes and are exempt from paying into Social Security, so anyone who spends part of their career working for the government and part working in the private sector, will be subject to WEP because they have retirement income that was derived from employment income on which SS contributions were not charged.
What if you have been paying into both a state pension and to SS (I have both deducted)?
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Old Jun 28th 2020, 2:29 am
  #20  
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Default Re: Should we wait for citizenship?

Originally Posted by Streetlegal View Post
What if you have been paying into both a state pension and to SS (I have both deducted)?
It is possible to qualify for both and claim for each independently, and that is what I intend to do. Given that SS payments can be reduced by WEP for UK state pension payments, it is certain that you can get payments from both, and due to a coincidence of when I immigrated to the US, and that I have been making Class 2 voluntary contributions so that I will have 35 years for a UK state pension, I am on track to get a full UK state pension and full social security with little or no WEP.

I could get snagged for a couple of years, but I haven't looked into the precise details of when WEP is triggered - by the time I retire I will have worked at least 27 years in the US, and perhaps as many as 32, so I think that puts me beyond the reach of WEP.

Last edited by Pulaski; Jun 28th 2020 at 2:42 am.
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Old Jun 28th 2020, 8:07 am
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Default Re: Should we wait for citizenship?

I am in a similar situation to Pulaski, 28 years SS years and 30 years NI contributions. (The max is 35 years for OAP so I missed out there).

WEP is a sliding scale. Max reduction of SS up to 20 years then a sliding scale until zero WEP for 30+ years of paying into SS
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Old Jun 28th 2020, 9:04 am
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Default Re: Should we wait for citizenship?

Originally Posted by Pulaski View Post
It is possible to qualify for both and claim for each independently, and that is what I intend to do. Given that SS payments can be reduced by WEP for UK state pension payments, it is certain that you can get payments from both, and due to a coincidence of when I immigrated to the US, and that I have been making Class 2 voluntary contributions so that I will have 35 years for a UK state pension, I am on track to get a full UK state pension and full social security with little or no WEP.

I could get snagged for a couple of years, but I haven't looked into the precise details of when WEP is triggered - by the time I retire I will have worked at least 27 years in the US, and perhaps as many as 32, so I think that puts me beyond the reach of WEP.
You're sitting pretty!

If I retire earlyish, I will have partial UK state pension and partial SS, but together they should amount to something. I paid in some voluntary contributions for some years of NI but wasn't able to do it for a few years. My paperwork is sitting somewhere in storage in the UK.
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Old Jun 28th 2020, 9:13 am
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Default Re: Should we wait for citizenship?

That's a lot of SS you got there Durham Lad. The max I will get is about 18 years.

I assume that as soon as I retire my SS will stop increasing? And, as long as I am not in work, it would be the same at 62 as 67.
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Old Jun 28th 2020, 10:24 am
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Default Re: Should we wait for citizenship?

Originally Posted by Streetlegal View Post
That's a lot of SS you got there Durham Lad. The max I will get is about 18 years.

I assume that as soon as I retire my SS will stop increasing? And, as long as I am not in work, it would be the same at 62 as 67.
SS increases in line with the wages index up to the point you start to draw it or age 70 whichever is sooner, I think, then it increases in line with the Cost-Of-Living-Adjustment (COLA). Choosing when to start taking SS is a personal choice. If you live to the age you are expected to by the SS Actuarial Tables then it doesn't matter if you take it at age 62 or age 70.
https://www.ssa.gov/oact/STATS/table4c6.html

I am choosing to take it at age 70 as a bit of extra life insurance because I expect to die before my wife and she will lose half of my US private pension and her SS will be less than half mine, however it will be boosted to equal my SS when I die.
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Old Jun 30th 2020, 2:30 am
  #25  
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Default Re: Should we wait for citizenship?

Thanks everyone. We’ve decided to apply for citizenship now in the hope it might be completed by next summer which is when I’d like to move back (still need to convince husband!) - he at the least will have worked in and for the Us for 10years by then. Unlikely I will be able to file for SS as I wasn’t allowed to work until we got our green cards in 2015 and I earn a pittance anyway....
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Old Jun 30th 2020, 10:53 am
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Default Re: Should we wait for citizenship?

Originally Posted by mymatemarmite View Post
Thanks everyone. We’ve decided to apply for citizenship now in the hope it might be completed by next summer which is when I’d like to move back (still need to convince husband!) - he at the least will have worked in and for the Us for 10years by then. Unlikely I will be able to file for SS as I wasn’t allowed to work until we got our green cards in 2015 and I earn a pittance anyway....
Good move, I hope it all goes to schedule for you. Even if you do not get enough credits for SS you will receive your husband's full SS if he dies before you. (This not the case in the UK where OAP dies with the spouse). Since we don't need my SS (I am 65 and could take it now) I am waiting until age 70 to get the maximum monthly payment as my wife is younger and fitter than me. We are treating it like an insurance policy as she will lose half my US private pension, and my SS at age 70 more than covers that loss in income.
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