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UK state pension and USA social security

UK state pension and USA social security

Old Feb 10th 2014, 9:36 pm
  #256  
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Default Re: UK state pension and USA social security

I have been reading this thread with some interest, trying to see if there is anyone in the same situation as me.
I am employed here in the US with 8 years of SS payments and, with a bit of luck, I hope to work another 2 years in order to qualify for the 40 points necessary to claim social security benefits.
I worked and paid taxes etc for over 35 years in the UK so qualify for the state pension and also have a small private pension, both of which I deferred when I reached 65 early last year.
I would be grateful if anyone has advice on what is the best way to proceed?

Also, I had an insurance policy in the UK which matured last year.
If I transfer that money from the UK to the US is it classed as taxable here?

Thanks
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Old Feb 10th 2014, 10:01 pm
  #257  
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Default Re: UK state pension and USA social security

Originally Posted by Donington View Post
I have been reading this thread with some interest, trying to see if there is anyone in the same situation as me.
I am employed here in the US with 8 years of SS payments and, with a bit of luck, I hope to work another 2 years in order to qualify for the 40 points necessary to claim social security benefits.
I worked and paid taxes etc for over 35 years in the UK so qualify for the state pension and also have a small private pension, both of which I deferred when I reached 65 early last year.
I would be grateful if anyone has advice on what is the best way to proceed?

Also, I had an insurance policy in the UK which matured last year.
If I transfer that money from the UK to the US is it classed as taxable here?

Thanks
If you are referring to an endowment type policy, I think it is taxable even if you don't transfer it to the US.

Check out the other thread about makingUK mortgage repayments from the US - it has some posts dealing with US tax treatment of UK endowment-type policies. (Sorry I'm using the tablet so can't paste the link)

Last edited by dunroving; Feb 10th 2014 at 10:04 pm.
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Old Feb 11th 2014, 5:39 pm
  #258  
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Default Re: UK state pension and USA social security

Originally Posted by hutchiebug View Post
Hopefully we may have the chance to make up some Voluntary NI Payments next year.
http://www.telegraph.co.uk/finance/p...ion-boost.html
This looks interesting to me as I reach 65 this April, thanks for posting.
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Old Feb 12th 2014, 3:31 pm
  #259  
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Default Re: UK state pension and USA social security

Originally Posted by Westham View Post
This looks interesting to me as I reach 65 this April, thanks for posting.
You're welcome! I don't know anyone in the same situation as myself.

IMO, this BE site provide the best information I can find anywhere.
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Old Feb 12th 2014, 4:00 pm
  #260  
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Default Re: UK state pension and USA social security

Originally Posted by Donington View Post
I have been reading this thread with some interest, trying to see if there is anyone in the same situation as me.
I am employed here in the US with 8 years of SS payments and, with a bit of luck, I hope to work another 2 years in order to qualify for the 40 points necessary to claim social security benefits.
I worked and paid taxes etc for over 35 years in the UK so qualify for the state pension and also have a small private pension, both of which I deferred when I reached 65 early last year.
I would be grateful if anyone has advice on what is the best way to proceed?

Also, I had an insurance policy in the UK which matured last year.
If I transfer that money from the UK to the US is it classed as taxable here?

Thanks
If you are a US resident your worldwide income is US taxable....it doesn't matter what or where it is' the IRS has primary taxation authority.

The endowment policy is US taxable.
Your SS, UK state pension and UK pension are US taxable.....but not UK taxable, you should file a UKIndividual2002 to make sure no UK tax is withheld at source. If your UK income is below you UK personal allowance you might not need to do that as you won't reach the UK tax threshold.

If you are receiving pensions derived from working in the UK (non SS wages) you need to tell SSA when you apply for SS. As your SS will probably be fairly small compared to your UK pensions you might lose a large fraction of it to the Windfall Elimination Provision.

You need to do the maths to see whether you want to defer US SS or take your money now given the level of WEP and you income needs.

Last edited by nun; Feb 12th 2014 at 4:44 pm.
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Old Feb 12th 2014, 4:21 pm
  #261  
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Default Re: UK state pension and USA social security

Originally Posted by dunroving View Post
If you are referring to an endowment type policy, I think it is taxable even if you don't transfer it to the US.

Check out the other thread about makingUK mortgage repayments from the US - it has some posts dealing with US tax treatment of UK endowment-type policies. (Sorry I'm using the tablet so can't paste the link)
I meant to find that thread for the person Nun has responded to (post above this one), as I knew it was a couple of pages back. Here it is.
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Old Mar 12th 2014, 3:21 am
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Default Re: UK state pension and USA social security

I'm 62, and still working here in the US. My career started in the UK in ~1976, moved to France in 1980, and to the US in 1986. I've got 18 years of US SS contributions. I'm also eligible for pensions in the UK and France, both of whom are ready to start paying. I'm planning on taking US SS when I'm 66 (or maybe 70. My husband's in the same position, but has 28 years of US SS contributions.

So, questions:
- If I start my French and UK pensions now, am I right that (other than income tax) there will be no (WEP-type) penalty until I start taking US SS?

When I'm 66/70 and start taking SS, will the WEP calculation just apply from that point on, or would they backdate the calculation from when I switched on the foreign pensions?

It seems to me that, puny as they are, I'd come out ahead by starting the foreign pensions now. That income for the next 4 to 8 years should more or less counterbalance what I'd lose in WEP, no?

Of course, having read this thread, talked to Social Security, and read their publications, I think it's all a bit of a guessing game.... and even if one guesses right, one still has to hope that SS are going to come to the same conclusion.

Frankly, I never thought I'd get to an age I'd need to be thinking about this... so that's one thing to be grateful for.

Cheers!
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Old Mar 12th 2014, 6:12 am
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Default Re: UK state pension and USA social security

There will be no WEP penalty until you claim SS. It will not be backdated. This is how I understand the system to work being in receipt of a UK pension but not yet claiming SS myself.
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Old Mar 12th 2014, 5:08 pm
  #264  
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Default Re: UK state pension and USA social security

Originally Posted by lansbury View Post
There will be no WEP penalty until you claim SS. It will not be backdated. This is how I understand the system to work being in receipt of a UK pension but not yet claiming SS myself.
+1

I'm also in receipt of a UK pension, and I certainly don't expect to have the WEP on my SS when I apply age 70 to be backdated for the 18 years I will have been receiving that pension.
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Old Mar 12th 2014, 6:05 pm
  #265  
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Default Re: UK state pension and USA social security

May be a daft question, but considering the effects of WEP, if you can afford to delay taking either UK and/or US pensions, would I be correct in saying it makes more sense to delay the UK state pension pension?

Rationale: For someone who has NO other pension (other than the UK and US "state pensions") , delaying UK state pension and taking US SS pension first would mean you would receive un-WEP'ed US SS pension for a few years. If you put off US SS pension, it will be WEP'ed immediately (I mean whenever you start taking it).

Or would it depend on the extent to which WEP affects you?

I will hit maximum WEP just by receiving UK state pension (i.e., regardless of whether I delay either my UK state pension or my UK occupational pension, either one of them will make me hit maximum WEP). I also plan to take my UK occupational pension around age 61 or 62. So as soon as I start receiving US SS pension, it will be maximally WEP'ed. I'm wondering whether delaying US SS pension will help any - I probably need to bugger about with the WEP calculator again and consult the oracle to find out how long I will live for.

Last edited by dunroving; Mar 12th 2014 at 6:10 pm.
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Old Mar 12th 2014, 6:28 pm
  #266  
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Default Re: UK state pension and USA social security

Originally Posted by dunroving View Post
May be a daft question, but considering the effects of WEP, if you can afford to delay taking either UK and/or US pensions, would I be correct in saying it makes more sense to delay the UK state pension pension?

Rationale: For someone who has NO other pension (other than the UK and US "state pensions") , delaying UK state pension and taking US SS pension first would mean you would receive un-WEP'ed US SS pension for a few years. If you put off US SS pension, it will be WEP'ed immediately (I mean whenever you start taking it).

Or would it depend on the extent to which WEP affects you?

I will hit maximum WEP just by receiving UK state pension (i.e., regardless of whether I delay either my UK state pension or my UK occupational pension, either one of them will make me hit maximum WEP). I also plan to take my UK occupational pension around age 61 or 62. So as soon as I start receiving US SS pension, it will be maximally WEP'ed. I'm wondering whether delaying US SS pension will help any - I probably need to bugger about with the WEP calculator again and consult the oracle to find out how long I will live for.
That indeed is the question. The amount I expect from US SS is considerably larger than the European pensions, so the WEP impact isn't going to be huge. And add to that the imponderable you mention of how long one is going to be around to draw these pensions. Plus the growth in the US SS amount from not drawing it until 70. It's the sort of swings and roundabouts that make your head spin.
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Old Mar 12th 2014, 9:29 pm
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Default Re: UK state pension and USA social security

Since apparently I'm at the age when I'm entitled to at least a portion of my deceased husband's social security, I've made an appointment at the SS office for the beginning of April. I'll be getting a pension from Germany so will ask about all of this while I'm there. However, there's no guaranteeing that I'll get any straight or correct answers. I'll let you know what transpires.
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Old Mar 13th 2014, 6:32 pm
  #268  
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Default FRENCH state pension and USA social security

Does anyone have parallel experience getting a French pension started in the US without triggering US Social Security?

The French insist that we have to do this through the US SS at Baltimore - but the only way to do that is to start taking US SS. In other words, they're fixated on the totalization agreement, and don't seem able to cope with the situation (ours) where we're qualified for pensions in both countries. So Baltimore direct us back to the French, and the French direct us back to Baltimore....

Meanwhile, the UK pension service is happily starting our Brit pensions.
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Old Mar 13th 2014, 8:41 pm
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Default Re: FRENCH state pension and USA social security

Originally Posted by RogieWillum View Post
Does anyone have parallel experience getting a French pension started in the US without triggering US Social Security?

The French insist that we have to do this through the US SS at Baltimore - but the only way to do that is to start taking US SS. In other words, they're fixated on the totalization agreement, and don't seem able to cope with the situation (ours) where we're qualified for pensions in both countries. So Baltimore direct us back to the French, and the French direct us back to Baltimore....

Meanwhile, the UK pension service is happily starting our Brit pensions.
I don't have an answer to your question but by coincidence we were chatting with someone at the gym this week who is receiving a French State pension, after living and working there for 20+ years. He was telling us that every year or so he has to go downtown (we live north of Houston) to the French consulate and complete some forms in person to keep his pension coming. He says that essentially it is the French government checking that he is still alive. He also said that they all know him at the consulate now and make him feel very welcome each time he goes in to complete the forms.

I asked if his pension was paid directly into his bank here but he said that the French system couldn't do that so it was transferred via Western Union (I think) and delivered to him as a physical check in dollars.
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Old Mar 13th 2014, 9:16 pm
  #270  
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Default Re: UK state pension and USA social security

Hmmm... so living in the Florida Keys, that may make a nice excuse for a trip to Washington from time to time!

We will keep disentangling the worms from their can...

Thanks!
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