Glasgow Girl

My understanding is that if you cash out an overseas pension for a lump sum when you are already taking your social security then they can impute the pension you would have received had you not cashed out, and then WEP what the pension would have been. Therefore if you are going to cash out a pension it is best to do so before claiming social security.

mrsparks

Good to know, but too late for me unfortunately.

Pulaski

I think I am going to escape WEP entirely, but that it is my provisional plan anyway, to cash out and use up entirely, a couple of small UK private pension funds to plug the gap between ceasing work and drawing SS and UK state pension (SRP), and thereby tidy up my personal pension receipts administration after I retire and boost both SS and SRP a little too.

I still haven't got a plan or strategy for drawing anything from my 401k funds or larger UK private pensions, but I need to talk to my tax accountant about any possible benefit to finegaling one or two years of very low income to try to claw back some currently "irrecoverable" tax credits. There is likely a one-off chance for me to do that after ceasing employment and before claiming my SS and SRP.

Glasgow Girl

Another good strategy is to minimize any income taxable as ordinary income by deferring pensions, social security and 401K/IRA withdrawals which then provides an opportunity to harvest capital gains tax free until your total income exceeds the upper threshold for the 12% tax bracket plus your deductions (or standard deduction) less any ordinary income. If you use this strategy and have zero ordinary income then you could harvest up to $106,150 capital gains tax free if you file MFJ and take the standard allowance. ($81,050 plus $25,100). If you have some ordinary income but it is below $106,150 then then you will still benefit from tax free capital gains for the balance. A very good way to avoid capital gains taxes.