UK state pension and USA social security
#1112
Re: UK state pension and USA social security
My best guess......and that's all it is....is that a lump sum taken would be converted to the equivalent "substantially equal payments" for the WEP calculation. So if you take a UK pension lump sum at age 55 and then take US SS at age 65, the SSA will essentially work out the life time annuity payment you could have purchased with your lump sum when you were 55 and use that in the WEP calculation. I assume this is what they will also do if you are in drawdown. They will convert your pension pot balance to the equivalent annuity payment.
#1113
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Joined: Apr 2011
Location: Ohio
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Re: UK state pension and USA social security
I assume that if they did as nun suggests, they'd use the dollar amount FX'd at the age of 55, the one declared on the tax return. Wonder if they'd then factor in inflation?
A lump sum if invested could quite easily double in size between ages 55 and 65 or 70; more variables to factor into the decision.
A lump sum if invested could quite easily double in size between ages 55 and 65 or 70; more variables to factor into the decision.
#1114
Re: UK state pension and USA social security
I assume that if they did as nun suggests, they'd use the dollar amount FX'd at the age of 55, the one declared on the tax return. Wonder if they'd then factor in inflation?
A lump sum if invested could quite easily double in size between ages 55 and 65 or 70; more variables to factor into the decision.
A lump sum if invested could quite easily double in size between ages 55 and 65 or 70; more variables to factor into the decision.
https://secure.ssa.gov/poms.nsf/lnx/0300605364
So if you were to retire today at age 65 with a pension pot worth $100k you would divide that by 128.4 and get $778.82 as the monthly income for WEP.
#1115
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Joined: Feb 2016
Location: Boston, MA
Posts: 28
Re: UK state pension and USA social security
Thanks for your insight Nun.
Will this still calculation still apply if I withdraw my entire UL personal pension now, pay the relevant UK and US taxes on it, but don't retire and claim SS for e.g another 10 years ?
Will this still calculation still apply if I withdraw my entire UL personal pension now, pay the relevant UK and US taxes on it, but don't retire and claim SS for e.g another 10 years ?
#1116
Re: UK state pension and USA social security
I imagine SSA will ask you about any UK pensions and will work out the relevant income given the lumps sum and when you took it.
#1118
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Joined: Jul 2007
Location: North Norfolk and northern New York State
Posts: 14,540
Re: UK state pension and USA social security
My wife decided to begin her U.S. SS in March this year (she has only 22 yrs of significant contributions.) She had a small Massachusetts Teachers Pension account that she took as a lump sum a few months ago. When she called the SS to discuss WEP, she told them all about the MA account. They said it was not relevant, since she'd taken it as a lump sum before SS commenced.
#1119
Re: UK state pension and USA social security
My wife decided to begin her U.S. SS in March this year (she has only 22 yrs of significant contributions.) She had a small Massachusetts Teachers Pension account that she took as a lump sum a few months ago. When she called the SS to discuss WEP, she told them all about the MA account. They said it was not relevant, since she'd taken it as a lump sum before SS commenced.
I will be taking an MA state pension at age 55 and will wait until 66 to take SS (18 years of contributions) and I expect to get WEPed.
#1120
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Joined: Feb 2016
Location: Boston, MA
Posts: 28
Re: UK state pension and USA social security
Thanks Robin1234 - can I as how your wife's lump sum was ( will be ?) taxed in the US ... I assume that it is classed as income ?
The challenge seems to be that there is no clarity on the exact position that will apply. Hence I was looking for a professional advisor whose opinion I can rely on - or at least use to defend a position with SS, as well as hopefully understand the taxation of the UK Private pension lump sum. Does anyone have any suggestions ?
The challenge seems to be that there is no clarity on the exact position that will apply. Hence I was looking for a professional advisor whose opinion I can rely on - or at least use to defend a position with SS, as well as hopefully understand the taxation of the UK Private pension lump sum. Does anyone have any suggestions ?
#1121
Re: UK state pension and USA social security
Thanks Robin1234 - can I as how your wife's lump sum was ( will be ?) taxed in the US ... I assume that it is classed as income ?
The challenge seems to be that there is no clarity on the exact position that will apply. Hence I was looking for a professional advisor whose opinion I can rely on - or at least use to defend a position with SS, as well as hopefully understand the taxation of the UK Private pension lump sum. Does anyone have any suggestions ?
The challenge seems to be that there is no clarity on the exact position that will apply. Hence I was looking for a professional advisor whose opinion I can rely on - or at least use to defend a position with SS, as well as hopefully understand the taxation of the UK Private pension lump sum. Does anyone have any suggestions ?
#1122
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Joined: Jul 2007
Location: North Norfolk and northern New York State
Posts: 14,540
Re: UK state pension and USA social security
I'm in England now, but according to my wife, they dated the payment December 31 2015, so we have to deal with it this year. They withheld tax. They sent a 1099 I assume. We'll simply enter the gross amount in line 16a and 16b, lumped together with a few other pensions and annuities, and of course include the withheld amount in line 64, where you declare the tax you've paid already.
#1123
Re: UK state pension and USA social security
There is a previous thread about UK/US tax advisors
http://britishexpats.com/forum/usa-5...dation-868962/
http://britishexpats.com/forum/usa-5...dation-868962/
#1124
Re: UK state pension and USA social security
A quick update, a work associate recently had a meeting with SSA and I asked him if he could ask if the above was true. He called me a couple of days ago and said that the SSA agent confirmed that he will not have WEP applied to his SS pension as long as he's not drawing his Civil Service pension. He turns 66 soon and will be drawing his SS pension.
#1125
Just Joined
Joined: Apr 2016
Posts: 1
Re: UK state pension and USA social security
Hello all,
I have a query about medical insurance. My husband (a Brit) and I (an American) are all set to emigrate to the US (Seattle to be exact) from the UK.
I was just wondering what others have done about obtaining medical insurance. Did you purchase an insurance plan while in the UK, or did you purchase a plan when you arrived in the US? Neither of us have insurance through work as we're starting completely fresh in the US.
Is travel insurance an acceptable option for the first 3 months? If so, what plans can you recommend? I saw a company that offered one way travel insurance for 90 days. Is this a viable option?
Many thanks for any help and advice.
I have a query about medical insurance. My husband (a Brit) and I (an American) are all set to emigrate to the US (Seattle to be exact) from the UK.
I was just wondering what others have done about obtaining medical insurance. Did you purchase an insurance plan while in the UK, or did you purchase a plan when you arrived in the US? Neither of us have insurance through work as we're starting completely fresh in the US.
Is travel insurance an acceptable option for the first 3 months? If so, what plans can you recommend? I saw a company that offered one way travel insurance for 90 days. Is this a viable option?
Many thanks for any help and advice.