mrken30

But can be reduced by contributing to a cafeteria plan HSA. Which then can be invested in the markets to get around 6% return.

theOAP

Under current rules, a benefit derived from a Totalisation Agreement possibly may not be WEPed. What the situation will be like in the future is, of course, unknown.

https://secure.ssa.gov/poms.nsf/lnx/0300605386

There have been claims on other sites of people receiving a US SSA benefit in the UK utilising the Agreement, and not being WEPed - but hey, it's the internet.

As for calculations of ROI, and again currently, the contributions made will also provide for a spousal benefit, if applicable, even if the spouse has never lived or worked in the US.

Again, currently, claims to start a US SSA benefit can be made by telephone to the FBU (Federal Benefits Unit) at the Embassy in London. See the US Embassy web site for details. All subsequent interviews (recorded) are made by phone appointment (they call you) and the paper work is then forwarded for signature. My suggestion would be to make the initial phone call only when ready to initiate the claim. The FBU will strongly attempt to have the beneficiary start the pension at age 62.

Rete

While the government does not have the funds in an interest bearing account for your express benefit, you need to remember that your employer contributed to the account. Thus, the monies you will get back at retirement includes the employer's contribution, as well as your own.

Please also be aware that your spouse will be eligible for these funds if you die before her. It is called survivor's benefits, I believe. You might want to look into that now and leave instructions for the spouse in case of your untimely demise.

theOAP

It's also worth noting when the above applies to someone who has had their SSA benefits WEPed, the survivors benefits will be made full, as if the application of WEP had not been made. In other words, a 100% benefit amount as normally calculated for the contributions, without any WEP, past or present, being applied to the future survivor benefits.

Rete

You are so right. Having a foreign spouse who is receiving reduced SS benefits due to WEP, he will get my full benefits without any reduction. In return I will not have my benefits reduced by WEP if he dies before me when I claim his foreign benefits.