UK state pension and USA social security
Mar 15th 2015, 8:29 am
#661
Heading for Poppyland
Joined: Jul 2007
Location: North Norfolk and northern New York State
Posts: 14,529
Re: UK state pension and USA social security
I didn't know this. I always assumed that cashing out prior to taking SS would avoid WEP. How is the WEP amount affected by taking weppable income earlier rather than later? For instance - say I take a British final salary pension at age 60, so it pays 100 pounds a month. If I'd waited till age 65 it would have paid significantly more. Then I take SS at age 66. Do they somehow take the WEP-free income I took between age 60 and age 66 into account when WEP is calculated?
Mar 15th 2015, 5:09 pm
#662
BE Forum Addict
Joined: Aug 2004
Posts: 4,754
Re: UK state pension and USA social security
What do they have DC accumulations in, nun; is it 401ks or a more traditional pension wrapper?
I am very much mentally equating the new UK pension environment with a 401k - contributions based on a designated percentage of salary, contributions from both employee and employer, tax-deferred, contribution limits, money can be entirely withdrawn or bit by bit upon reaching a certain age subject to paying the tax, etc. Do state workers get WEP'd based on their accumulated 401k pot, and if not, why would taking all the money out of a new-style UK pension, perhaps 10-15 years previously, trigger a need for it?
I am very much mentally equating the new UK pension environment with a 401k - contributions based on a designated percentage of salary, contributions from both employee and employer, tax-deferred, contribution limits, money can be entirely withdrawn or bit by bit upon reaching a certain age subject to paying the tax, etc. Do state workers get WEP'd based on their accumulated 401k pot, and if not, why would taking all the money out of a new-style UK pension, perhaps 10-15 years previously, trigger a need for it?
https://secure.ssa.gov/apps10/poms.nsf/lnx/0300605364
I imagine that if someone had a foreign DC pension, took a lump sum and then filed for SS later then the SSA would want to know the amount of the lump sum so it can do the same WEP calculation.
Last edited by nun; Mar 15th 2015 at 5:22 pm.
Mar 15th 2015, 5:18 pm
#663
BE Forum Addict
Joined: Aug 2004
Posts: 4,754
Re: UK state pension and USA social security
I didn't know this. I always assumed that cashing out prior to taking SS would avoid WEP. How is the WEP amount affected by taking weppable income earlier rather than later? For instance - say I take a British final salary pension at age 60, so it pays 100 pounds a month. If I'd waited till age 65 it would have paid significantly more. Then I take SS at age 66. Do they somehow take the WEP-free income I took between age 60 and age 66 into account when WEP is calculated?
Mar 15th 2015, 5:24 pm
#664
BE Forum Addict
Joined: Aug 2004
Posts: 4,754
Re: UK state pension and USA social security
Yes. You are required to tell the SSA about any non-SS pensions. Even if you cashed out at 55 you should tell SSA and they will calculate a pension amount based on the lump sum amount, when you took it and standard actuarial tables.
Last edited by nun; Mar 15th 2015 at 5:27 pm.
Mar 15th 2015, 5:38 pm
#665
BE Forum Addict
Joined: Apr 2011
Location: Ohio
Posts: 1,834
Re: UK state pension and USA social security
If a state worker has an old fashioned final salary pension plan then it's just their monthly pension amount that is used to calculate WEP....simple. However, some US state workers have compulsory 401a DC pension accounts so the SSA needs to calculate an equivalent monthly income. This is a simple actuarial calculation. When the state employee stops working for the state a statement of the 401a balance is given to SSA and is used to calculate WEP when the employee applies for SS.
https://secure.ssa.gov/apps10/poms.nsf/lnx/0300605364
I imagine that if someone had a foreign DC pension, took a lump sum and then filed for SS later then the SSA would want to know the amount of the lump sum so it can do the same WEP calculation.
https://secure.ssa.gov/apps10/poms.nsf/lnx/0300605364
I imagine that if someone had a foreign DC pension, took a lump sum and then filed for SS later then the SSA would want to know the amount of the lump sum so it can do the same WEP calculation.
Mar 15th 2015, 8:21 pm
#666
Forum Regular
Joined: Mar 2015
Posts: 78
Re: UK state pension and USA social security
Last edited by jb82; Mar 15th 2015 at 8:27 pm.
Mar 15th 2015, 10:24 pm
#667
Just Joined
Joined: Sep 2014
Posts: 10
Re: UK state pension and USA social security
Based upon above continued discussion, I will be 66 yrs next year at full retirement age. My wife also have UK State Pension and will be 62 in 2018. If she claimed her US SS will her UK State Pension will be liable to WPED before she entitle to UK State Pension at Full Retirement age of 66 in 2022?. None of us have 30 yrs of full US SS contribution.
Mar 15th 2015, 11:09 pm
#668
Joined: Apr 2005
Location: Milwaukie, Oregon
Posts: 9,965
Re: UK state pension and USA social security
Based upon above continued discussion, I will be 66 yrs next year at full retirement age. My wife also have UK State Pension and will be 62 in 2018. If she claimed her US SS will her UK State Pension will be liable to WPED before she entitle to UK State Pension at Full Retirement age of 66 in 2022?. None of us have 30 yrs of full US SS contribution.
If she takes the UK pension before US SS, her SS will be calculated from the start to allow for WEP.
Last edited by lansbury; Mar 15th 2015 at 11:13 pm.
Mar 16th 2015, 12:32 am
#669
Forum Regular
Joined: Jun 2014
Location: Long Beach, CA
Posts: 94
Re: UK state pension and USA social security
Could you provide a link that supports this statement?
In prior rounds of this never-ending discussion, various knowledgeable people have pointed towards specific wording from US SS Web pages, or the WEP modeller. At least then it's possible to discuss factual information rather than being unsure whether a statement of fact is just someone's perception or opinion of the current situation.
In prior rounds of this never-ending discussion, various knowledgeable people have pointed towards specific wording from US SS Web pages, or the WEP modeller. At least then it's possible to discuss factual information rather than being unsure whether a statement of fact is just someone's perception or opinion of the current situation.
I dont necessarily agree with the SSA position here. nun has also opined on this in various posts.
Mar 16th 2015, 9:34 am
#670
Just Joined
Joined: Mar 2015
Posts: 1
Re: UK state pension and USA social security
An agreement between the United States and the United Kingdom (U.K.) improves Social Security protection for people who work or have worked in both countries. It helps many people who, without the agreement, would not be eligible for monthly retirement, disa
Mar 16th 2015, 1:12 pm
#671
Forum Regular
Joined: Aug 2013
Location: Los Angeles
Posts: 92
Re: UK state pension and USA social security
I'm not sure there is an improvement for many caught up with the Wep issue.
Mar 16th 2015, 4:03 pm
#673
Joined: Apr 2005
Location: Milwaukie, Oregon
Posts: 9,965
Re: UK state pension and USA social security
A link to that agreement might be useful.
Mar 16th 2015, 5:39 pm
#674
Under blue skies
Joined: Mar 2011
Location: East Anglia->New England
Posts: 3,624
Re: UK state pension and USA social security
Mar 16th 2015, 7:55 pm
#675
Joined: Apr 2005
Location: Milwaukie, Oregon
Posts: 9,965
Re: UK state pension and USA social security
About the only thing this agreement does for the average Brit pensioner is protect the COL increases if you live in the US.One thing I did reread in that agreement and I knew I had read somewhere and mentioned it earlier in this thread. You can claim a UK State pension at a social security office.
You can apply for U.K. benefits at any U.S. Social Security office by completing application form SSA-2490.
