pentangili

HI
I am 61 year old a UK citizen, I worked 11 years in USA from age 45- 57 - (on J-1, H1-B visas) - I moved back permanently to the UK in 2019, am not a US citizen. I have more than 40 credits in the US Social Security and I have personalised pension estimates starting at age 62

I am still working full time in the UK - earning just over £50,000 and intend to work until age 67 to get a full UK state pension - I will have enough years by 67 (just) - even given the years I missed

MY QUESTION:
If I choose to take my US pension at age 62, or 63 etc...
Will they reduce my benefits based on the fact that I am still earning in the UK?

From the document "How Work affects your benefits" ".... You can get Social Security retirement or survivors benefits and work at the same time. But, if you’re younger than full retirement age, and earn more than certain amounts, your benefits will be reduced. The amount that your benefits are reduced, however, isn’t truly lost. Your benefit will increase at your full retirement age to account for benefits withheld due to earlier earnings. Spouses and survivors who receive benefits because they have children who are minors or have disabilities in their care, don’t receive increased benefits at full retirement age if benefits were withheld because of work.
NOTE: Different rules apply if you receive Social Security disability benefits or Supplemental Security Income payments. Then you must report all earnings to us. Also, different rules apply if you work outside the United States. Contact us if you’re working (or plan to work) outside the country."
I know how many years I still need to contribute to get a full UK pension, and I have been told (by the UK ) that my entitlement to receive my UK State pension is unaffected by the fact that I will be receiving a US pension.

I know I can probably get the answers in a long phone call to the US SSA when I become eligible to consider applying in May 2024, but I write in hope that some in this forum have experience and answers already to help me decide how to proceed.

durham_lad

I don't believe your benefits will be reduced because you are working in the UK. The reason that rule exists is for when you are working in the US and still paying into the SS system (shown as FICA payments on your W2 each year) and your SS benefits will be increasing by virtue of the fact that you would still be paying into the system. From your post above you have the explanation that "Your benefit will increase at your full retirement age to account for benefits withheld due to earlier earnings. "

However, once you start drawing your UK pensions your SS payments will be reduced because of the Windfall Elimination Program (WEP) because you will be earning another pension from wages without paying into SS.

pentangili

Thanks I will look into that _ Its really hard to understand the WEP rules -

My US pension estimate is only based on the 11 years I worked in the US

My UK state pension is ONLY calculated based on my actual years worked in the UK - (this is specifically mentioned on my UK pension estimate) so I an unclear of the mechanism by which it affects my US pension - ? Am I wrong about that ? I have never made any UK voluntary contributions to make up missing years since at age 62 I am still currently 5 years short - and therefore will be paid up in full by age 67. my UK pension estimate and NI record shows "year is not full" between 2007 and 2019 - and does not include any US earnings in its estimate

What I did not mention - didn't think it was relevant - is that I am already in receipt of part of a UK employee (NHS) pension under old rules where it became payable from age 60 (~£1700 pre tax ppm),

durham_lad

It doesn’t matter when you paid your UK pension contributions (NI) regarding WEP but HOW you paid the contributions. Voluntary contributions don’t count towards WEP because they were paid with after tax money in a similar way to how one would contribute to a private annuity.

For example my UK state pension comes from 30 years of contributions, 20 of which were voluntary contributions so only 1/3 of my pension is counted in the WEP calculation. However, UK private pensions also count towards WEP so the addition of my UK private pension from my employer before I moved to the USA means my SS wil be reduced by about $250/month. (I have 25 years of contributions to SS and WEP starts reducing from 20 to 30 years)

My wife has been through this a couple of years ago and her SS was reduced once she started receiving her UK OAP and because she had 15 years of Voluntary contributions it wasn’t as bad as it might have been. She applied through the FBU at the US Embassy in London, all online and via phone.