JAJ

Isn't it a consequence of the fact that you only need 10 years contributions to get a full SS pension in the USA?

dunroving

I don't think 40 quarters gives you a "full" SS pension, it only makes you eligible to receive any SS pension at all (so it's like a minimum qualifying contribution period).

My understanding is that if you paid a greater annual amount of SS (i.e., if you had a higher salary) and if you paid for longer (more years beyond the 40 quarter/10 year minimum), you get more in your monthly SS pension.

windsong

I have paid in over 30 years SS in the U.S. What I don't know is whether the amount the statement says I will receive when I am 62 will vary from now on based on my earnings over the next few years.

robin1234

Yes it will. The SS use your "best" 30 years, applying an inflation factor to earlier years in order to compare them to recent or future years' income. (For instance.. just a wild example.. the SS might say that the $25,000 you earned in 1980 is a better year's income than the $40,000 you earned in 2010, because of inflation.)

So, if you have high-earning years over the next 3 or 4 years before your retirement, then they will displace possibly lower income years that you had decades ago. This would raise your estimated annual payment at age 62 (or age 65 or 66 or whenever you choose to start your SS payments.)

windsong

Thank you.

dunroving

Robin, does the forecast assume that you will continue contributing until you reach 30+ years? (I'm assuming the answer is probably Yes).

I can't put my hand on my previous statements, all I know is that I squeaked under the 10 years/40 quarters threshold just before I left the US. If I never get to return (still working on it ....), I'd collect based on 40 quarters, which is why I'm asking. Either way, my plan is to continue contributing NI (even if I leave the UK) and collect UK and US state pension when I retire (US will be based on 40 quarters or whatever level I reach if I get to move back).

Mummy in the foothills

I have 13 or 14 years in here in SS payments, part time raising kids, low wages over the years and I'm eligible, I should get $1.75 per month or something crazy like that. You have to have a decent income for those 10 years to get anything worth collecting.
Dh has 32 years and will only get a little more than $2000 a month and that will be reduced cause he will get a Union pension too.

dunroving

That's better than the approximately £400 pcm you get for a full UK state pension, though (your husband's SS pension, I mean).

robin1234

Mine assumes I will continue contributing until retirement age, which would be less than 30 years of credits unless I don't retire until age 67+ (I'm 60 and plan to retire end of 2012.)... As you know, these things are a clever mix of "boilerplate" text and text that is tailored to your situation. On my most recent one, It states;
"You have earned enough credits to qualify for benefits. At you current earnings rate, if you continue working until... your full retirement age (66 years), your payment would be about...$$$" (it gives four different age examples)
In your case, not currently working in the US, maybe that text is differently worded and assumes you have ceased earning credits?

Mallory

You will draw on your husband's SS, and you will get 50% of what he gets. Not bad to get $1000 a month! When you get to full pension age, if DH were to die, you will revert to his SS pension amount.

windsong

I will never know how UK OAPs live on this amount if they have a mortgage or rent to pay. It's impossible.

windsong

$2000 a months is very good. Mine was good, too, until the last 10 years. It's down to about $1578 a month if I start collecting at 62.

Are you saying that if I draw a company pension, it will reduce the amount I will get from SS?

robin1234

In general, no it won't reduce the SS. This is a complex area (the Windfall Elimination Provision, discussed earlier in this thread and other recent threads.)

In general terms, if your company pension is from years that you also contributed to the SS (from your posts I think this is the case,) then you will not suffer the penalty (reduction of SS.)

The WEP comes in to play for pensions that apply to employment that did not pay into US Social Security ...examples would be working in Massachusetts in local government, or working in a foreign country such as England.

robin1234

In the UK as in the US, it is assumed that most people have other sources of income in retirement (company pension, savings & investments, part-time work etc.) Also, I think most people factor into their retirement planning retirement of all debt; i.e. as they get closer to retirement, they pay off their mortgage, eliminate car payments etc., even if that means they have to live a simpler lifestyle. If they are renters, for instance in a council property, their rent would be low and adjusted to their lower income in retirement.

Bottom line is (in my experience)... it is necessary to plan ahead and possibly sacrifice current expenditure in the decade or more leading up to retirement.

windsong

Yes, I agree. I should be okay I think, although rent will take a huge portion of my income, almost 50%, I think. I will have my US SS of $1578 a month if I start drawing it at 62 and then when I stop working at 65 I will begin to draw my company pension which will be $850 at that time. I also want to pay in a few years to UK NI to receive a little tiny pension from the UK as well.