State Pension From from the UK to USA
Jun 13th 2017, 7:20 pm
#16
Forum Regular
Joined: Feb 2013
Location: Los Angeles
Posts: 158
Re: State Pension From from the UK to USA
One thing to consider, if you continue to work in the USA and not draw any of your UK pensions your are eligible to collect your full USA SS at 66 and not have it reduced by WEP.
At 65 you are not eligible for your full SS pension. Instead of deferring your US SS pension and living on your UK pension(s) you may be better off working and drawing your full (un-WEP'd) US SS while deferring your UK pensions.
At some point, when you decide to take your UK pensions then your US SS pension will be reduced by around $400/month, but until then you will be getting an extra $400/month.
One thing I'm not sure about if you defer your US SS and take you UK pensions is if the SSA consider your US SS pension to actually have WEP applied when they calculate your annual COLA dollar amount. Normally you can expect around 7% increase per year if you defer your US SS but the question is on which amount? I do know that if you are drawing SS and it is subject to WEP your COLA is based on the amount you get after WEP is applied, not before.
At 65 you are not eligible for your full SS pension. Instead of deferring your US SS pension and living on your UK pension(s) you may be better off working and drawing your full (un-WEP'd) US SS while deferring your UK pensions.
At some point, when you decide to take your UK pensions then your US SS pension will be reduced by around $400/month, but until then you will be getting an extra $400/month.
One thing I'm not sure about if you defer your US SS and take you UK pensions is if the SSA consider your US SS pension to actually have WEP applied when they calculate your annual COLA dollar amount. Normally you can expect around 7% increase per year if you defer your US SS but the question is on which amount? I do know that if you are drawing SS and it is subject to WEP your COLA is based on the amount you get after WEP is applied, not before.
Last edited by Disenchanted; Jun 13th 2017 at 7:38 pm.
Jun 13th 2017, 7:46 pm
#17
Forum Regular
Thread Starter
Joined: Mar 2012
Posts: 78
Re: State Pension From from the UK to USA
Disenchanted. Interesting comments. However and as you know if one is 65 or 66, it actually makes more sense to defer your US pension until you are 70 and thereby receive about 30% more. However I am not sure if one stops working at say 65, you can do this.
Jun 13th 2017, 8:01 pm
#18
Joined: Apr 2005
Location: Milwaukie, Oregon
Posts: 9,966
Re: State Pension From from the UK to USA
The whole WEP is a minefield. I have read and re read about it but other than learning that a pensions in the UK will end up reducing the US pension, I could not find the answers to my questions.
Hubby and I came to the US in 1995 and since that time both of us have worked. If we decide to retire at 62 we will both have worked 27 years. In calculating what percentage they reduce your SS taking into account other pensions, is it a sliding scale percentage i.e. is the amount they reduce it by less than if you had only worked 20 years? Also, in declaring your other pensions is that pension that you are claiming from others at the same time you start to claim your US pension. If so, then you would be correct in saying that at 62 the only pension you would be claiming would be your US SS as you can't claim (I believe) your UK pension until you are 65.
Also, my hubby received a letter recently from one of his pensions to say he can elect a lump sum. If you do that, will the US SS take that into account.
If you do have your US pension reduced due to other pensions do you have to notify the US SS of any pension increases from the UK. Boy is all this complicated. Its probably better to work those extra three years and be done with it.
Hubby and I came to the US in 1995 and since that time both of us have worked. If we decide to retire at 62 we will both have worked 27 years. In calculating what percentage they reduce your SS taking into account other pensions, is it a sliding scale percentage i.e. is the amount they reduce it by less than if you had only worked 20 years? Also, in declaring your other pensions is that pension that you are claiming from others at the same time you start to claim your US pension. If so, then you would be correct in saying that at 62 the only pension you would be claiming would be your US SS as you can't claim (I believe) your UK pension until you are 65.
Also, my hubby received a letter recently from one of his pensions to say he can elect a lump sum. If you do that, will the US SS take that into account.
If you do have your US pension reduced due to other pensions do you have to notify the US SS of any pension increases from the UK. Boy is all this complicated. Its probably better to work those extra three years and be done with it.
If you take SS at 62 and UK State at 65, you must inform SS when you start taking the UK pension and WEP will then be calculated. If your husband takes a lump sum that is taken into account when WEP is calculated. You will be asked about future pensions and lump sums when you claim SS.
If you can work and get 30 years contributions my personal opinion is that is the way to go. 30 years contributions means no WEP.
Jun 13th 2017, 8:06 pm
#19
Joined: Apr 2005
Location: Milwaukie, Oregon
Posts: 9,966
Re: State Pension From from the UK to USA
If you have less than 30 years contributions to SS, WEP will be applied when you claim your UK pension.
Jun 13th 2017, 9:06 pm
#20
Forum Regular
Joined: Feb 2013
Location: Los Angeles
Posts: 158
Re: State Pension From from the UK to USA
I presume you were born in 1951? 65 is UK retirement age.
At 62 you are eligible for early retirement in USA but you are penalized, 66 is currently the full retirement age.
I also presume you are on the new UK pension with a deferral rate of 5.8%?
If you have reached 65 they should have already contacted you and stated that if they hear nothing from you they will consider you are deferring your UK pension.
My situation is this; 66 in July and qualify for full US SS pension. 20 years of SS contributions, still working for City of Los Angeles so I will upon retirement receive a WEP inducing pension from my Civil Service job. UK private pension matured at 62 and in deferral, UK state pension at 65 and also in deferral.
Currently still working full time and have already filed for US SS. Come August of this year I will receive my FULL SS pension (no WEP) because I am not receiving any pensions that trigger WEP. When I do retire, say in 24 months time then I will start receiving my UK pensions and my Civil Service pension, prior to which I must tell SSA and they will then proceed to reduce (WEP) my US SS by $400/mo.
In my case my full SS is $1100/mo, so if I defer it for 4 years (66~70) at 8%/year it will be worth 1496/mo, an increase of $396/mo by the time I reach 70. When I do collect it I will only get $1096/mo after WEP and up to that point I will have received zilch.
If I don't defer it I will have received ($1100 x 24) + (($1100-$400 WEP) x 24) = $43,200 by the time I'm 70. So $43,200/$1096 = 39.42 months = 3 years 3.4 months, it will take until I'm 73 years and 3.4 months before I would receive the same as I already collected, and that doesn't include the $700/mo. I will be collecting from 70 to 73+ ($27,591) or the COLA amounts for all those years. It will take approximately until I'm 80'ish before I start to pull ahead if I were to defer my US SS until I am 70.
I'm not sure I will even survive that long.
Deferring your UK pensions will allow you to get a full US SS pension which far out weighs the 8%/yr you get on your deferred US pension and don't forget that you still get 5.8%/yr on your UK state pension while it's in deferral for 5 years rather than 4 years at 8% for your US pension. UK 29% and US 32%, a whopping 3% difference.
http://money.cnn.com/2016/07/24/inve...ity/index.html
At 62 you are eligible for early retirement in USA but you are penalized, 66 is currently the full retirement age.
I also presume you are on the new UK pension with a deferral rate of 5.8%?
If you have reached 65 they should have already contacted you and stated that if they hear nothing from you they will consider you are deferring your UK pension.
My situation is this; 66 in July and qualify for full US SS pension. 20 years of SS contributions, still working for City of Los Angeles so I will upon retirement receive a WEP inducing pension from my Civil Service job. UK private pension matured at 62 and in deferral, UK state pension at 65 and also in deferral.
Currently still working full time and have already filed for US SS. Come August of this year I will receive my FULL SS pension (no WEP) because I am not receiving any pensions that trigger WEP. When I do retire, say in 24 months time then I will start receiving my UK pensions and my Civil Service pension, prior to which I must tell SSA and they will then proceed to reduce (WEP) my US SS by $400/mo.
In my case my full SS is $1100/mo, so if I defer it for 4 years (66~70) at 8%/year it will be worth 1496/mo, an increase of $396/mo by the time I reach 70. When I do collect it I will only get $1096/mo after WEP and up to that point I will have received zilch.
If I don't defer it I will have received ($1100 x 24) + (($1100-$400 WEP) x 24) = $43,200 by the time I'm 70. So $43,200/$1096 = 39.42 months = 3 years 3.4 months, it will take until I'm 73 years and 3.4 months before I would receive the same as I already collected, and that doesn't include the $700/mo. I will be collecting from 70 to 73+ ($27,591) or the COLA amounts for all those years. It will take approximately until I'm 80'ish before I start to pull ahead if I were to defer my US SS until I am 70.
I'm not sure I will even survive that long.
Deferring your UK pensions will allow you to get a full US SS pension which far out weighs the 8%/yr you get on your deferred US pension and don't forget that you still get 5.8%/yr on your UK state pension while it's in deferral for 5 years rather than 4 years at 8% for your US pension. UK 29% and US 32%, a whopping 3% difference.
http://money.cnn.com/2016/07/24/inve...ity/index.html
Last edited by Disenchanted; Jun 13th 2017 at 10:18 pm.
