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UK state pension and USA social security

UK state pension and USA social security

Old May 8th 2014, 7:55 pm
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Default Re: UK state pension and USA social security

Thank you for the thunderous response...

Can anyone point me in the direction of an accountant knowledgeable in such matters.

Again, Thanking you in advance
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Old May 8th 2014, 8:08 pm
  #317  
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Default Re: UK state pension and USA social security

The problem is that there's not an obvious answer.

If you don't need the money, then the first step would be to hold off taking US SS until you're 70, since the amount will increase with each year you wait.

Except - if you have a wife/husband, I believe that if you start taking half of theirs when you're 66, that will eventually give them a better income should anything happen to you.

If I understand correctly, the UK pension doesn't increase with time (sanity check, anyone?), so I'd just take that and squirrel it away somewhere.

Plus there will be WEP taken from your US SS (see earlier in this thread).

Having pension funds in France, UK and the US, my experience is that not a lot of financial professionals have knowledge that straddles cultures. So no advice to offer there, I'm afraid.
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Old May 8th 2014, 8:16 pm
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Default Re: UK state pension and USA social security

Originally Posted by RogieWillum View Post

If I understand correctly, the UK pension doesn't increase with time (sanity check, anyone?), so I'd just take that and squirrel it away somewhere.
You can defer and it is worth about 10% per year. Information here.
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Old May 8th 2014, 8:26 pm
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Default Re: UK state pension and USA social security

Originally Posted by RogieWillum View Post
The problem is that there's not an obvious answer.

If you don't need the money, then the first step would be to hold off taking US SS until you're 70, since the amount will increase with each year you wait.

Except - if you have a wife/husband, I believe that if you start taking half of theirs when you're 66, that will eventually give them a better income should anything happen to you.

If I understand correctly, the UK pension doesn't increase with time (sanity check, anyone?), so I'd just take that and squirrel it away somewhere.

Plus there will be WEP taken from your US SS (see earlier in this thread).

Having pension funds in France, UK and the US, my experience is that not a lot of financial professionals have knowledge that straddles cultures. So no advice to offer there, I'm afraid.
UK State Pension has inflation increases and increases if deferred beyond retirement age.
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Old May 8th 2014, 9:47 pm
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Default Re: UK state pension and USA social security

Originally Posted by alimey4u2 View Post
Thank you for the thunderous response...

Can anyone point me in the direction of an accountant knowledgeable in such matters.

Again, Thanking you in advance
We're not ignoring you, honest. We don't know how to answer since you seem to have a plan to work for 5 more years.

The US SS and the UK State Pension will both continue to grow as has been mentioned by others.

Since you have US ties although living in the UK, and if you still file a US tax return; you may be able to continue to contribute to your US 401K if you file using Foreign Tax Credits (Form 1116). I know nothing about 401K's, but I believe you have until 70 1/2 years of age before you must start collecting. Hopefully someone with more knowledge can advise.

There are other threads on this site regarding the conversion of a 401 to a ROTH. There are tax advantages to having a ROTH in both the US and the UK due to the Tax Treaty. But, a word of warning: your 401 provider may not let you make the conversion since you are no longer resident in the US. See recent threads in the 'Moving back to the UK' section of this site.

If you don't need the money now because you will still have income from employment, then let all continue to grow. It may be wise to check out all the information available on the US SSA site and the above UK State pension site mentioned above as to the exact timing required to start collecting your pensions. Same for your 401 provider.

Information beyond that may be hard to find on an internet forum. There are sites that deal with Early Retirement (ER.org), and you may find opinions there, but many will wonder why you don't stop now. None the less, most understand that some people would prefer to keep working because they have both the opportunity and the pleasure of working. If that's your situation, then more power to you. You can start worrying about obtaining the pensions once you reach 69.

EDIT to add:
I don't understand your statement about having 20 years contributions to US SS, but only 40 points. If you have 20 full years, you should have 80 quarters of contributions (1 year = 4 quarters of contributions).

Last edited by theOAP; May 8th 2014 at 9:54 pm.
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Old May 8th 2014, 10:10 pm
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Default Re: UK state pension and USA social security

Originally Posted by alimey4u2 View Post
British citizen living in the UK... 65 years old with guaranteed employment till 70 + years old. In very good health ( don't strike me down now Lord.)

Fully vested in UK state pension & 40 points ( 20 years) with US Fed pension.

Healthy 401K plan in mutual funds.

US Company pension... ( a few bob a month)

I like to work. ???

Don't need any other sources of income right now...I'll only pi$$ it away ( see prior health statement)


Take my pensions ? If so, in what order ? When do I start spending my money ?

Thanking you in advance...


When determining which source of income to take first in retirement the following issue is often overlooked.

When you die your US and UK SS payments end (your spouse may get a reduced benefit - my wife is not eligible for any benefit since her job didn't require she pay SS and her pension exceeds any benefit she may have received).

My point is you cannot leave your SS benefits to heirs, siblings etc. unlike your savings and investments.

So for me it makes sense to spend my SS and pension income before I use any of my retirement investments, IRA's and 401k since when the time comes I can leave these monies to anyone I designate.
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Old May 8th 2014, 11:09 pm
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Default Re: UK state pension and USA social security

Originally Posted by audi4t View Post
When determining which source of income to take first in retirement the following issue is often overlooked.

When you die your US and UK SS payments end (your spouse may get a reduced benefit - my wife is not eligible for any benefit since her job didn't require she pay SS and her pension exceeds any benefit she may have received).

My point is you cannot leave your SS benefits to heirs, siblings etc. unlike your savings and investments.

So for me it makes sense to spend my SS and pension income before I use any of my retirement investments, IRA's and 401k since when the time comes I can leave these monies to anyone I designate.
Excellent point. My wife will not receive any OAP after I die, but she should continue to receive my full SS which is larger than hers, but will lose her own SS.
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Old May 8th 2014, 11:29 pm
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Default Re: UK state pension and USA social security

Originally Posted by durham_lad View Post
Excellent point. My wife will not receive any OAP after I die, but she should continue to receive my full SS which is larger than hers, but will lose her own SS.
This would seem to suggest that a surviving spouse who does not have a full UK pension of their own, is entitled to a pension.

http://www.nidirect.gov.uk/what-happ...n-when-you-die

So not everyone would lose out.
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Old May 9th 2014, 12:43 am
  #324  
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Default Re: UK state pension and USA social security

Originally Posted by lansbury View Post
This would seem to suggest that a surviving spouse who does not have a full UK pension of their own, is entitled to a pension.

http://www.nidirect.gov.uk/what-happ...n-when-you-die

So not everyone would lose out.
I thought I heard that the the new pensions laws coming into force in 2016 state that a surviving spouse who does not have a UK pension of their own will not be entitled to a pension. (My wife doesn't qualify for any UK pension).

If the law doesn't change then that will be good for us.
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Old May 9th 2014, 12:44 am
  #325  
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Default Re: UK state pension and USA social security

Originally Posted by theOAP View Post
Since you have US ties although living in the UK, and if you still file a US tax return; you may be able to continue to contribute to your US 401K if you file using Foreign Tax Credits (Form 1116). I know nothing about 401K's, but I believe you have until 70 1/2 years of age before you must start collecting. Hopefully someone with more knowledge can advise.
You can't contribute to a 401K once you are no longer employed by the company. Distributions of 401k and traditional IRA plans must start no later than the year you reach age 70 1/2. The following IRA withdrawal calculator indicates the minimum that must be withdrawn each year from a IRA/401k plan after age 70 1/2. Usually your 401K plan administrator will notify you that a withdrawal is required. If the full required withdrawal is not made during that year, the shortage will be heavily taxed.

http://www.bankrate.com/calculators/...ator-tool.aspx
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Old May 9th 2014, 2:52 pm
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Default Re: UK state pension and USA social security

Many thanks to all... Good info.
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Old May 27th 2014, 10:55 pm
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Default Re: UK state pension and USA social security

Hi All,
Does anyone know the class 2 NIC annual total rate for 2013/2014?
I was think it is 140.00 GBP for the tax year but would like confirmation.
Thanks in advance.
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Old May 27th 2014, 11:34 pm
  #328  
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Default Re: UK state pension and USA social security

Originally Posted by Westham View Post
Hi All,
Does anyone know the class 2 NIC annual total rate for 2013/2014?
I was think it is 140.00 GBP for the tax year but would like confirmation.
Thanks in advance.
140.40 is what I paid.
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Old May 28th 2014, 2:46 am
  #329  
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Default Re: UK state pension and USA social security

Originally Posted by durham_lad View Post
I thought I heard that the the new pensions laws coming into force in 2016 state that a surviving spouse who does not have a UK pension of their own will not be entitled to a pension. (My wife doesn't qualify for any UK pension).

If the law doesn't change then that will be good for us.
Wondering if phoning Newcastle would be worthwhile, the information would appear to me that if I pass away before pension age my American wife could claim a partial pension, with the changes coming up it would appear that is no longer the case.

Which now makes me wondering if it worth paying voluntary NI, I have 16 years but I am still have 20 years of working before I reach retirement age.

I was all set to start paying voluntary NI then I got a communication that suggested with the changes it may no longer be worth my while.

So my understanding now is that if I kick the bucket my American wife gets nothing from my UK pension.

Can anybody clarify this mess?
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Old May 28th 2014, 3:24 am
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Default Re: UK state pension and USA social security

Originally Posted by fsm View Post
Wondering if phoning Newcastle would be worthwhile, the information would appear to me that if I pass away before pension age my American wife could claim a partial pension, with the changes coming up it would appear that is no longer the case.

Which now makes me wondering if it worth paying voluntary NI, I have 16 years but I am still have 20 years of working before I reach retirement age.

I was all set to start paying voluntary NI then I got a communication that suggested with the changes it may no longer be worth my while.

So my understanding now is that if I kick the bucket my American wife gets nothing from my UK pension.

Can anybody clarify this mess?
Not knowing when we are going to die makes future planning so difficult.

I only have 7 years to go before OAP age and if I live for about 4 years after that then my gamble of paying 10 extra years of NI will have paid off, even though my wife will not get ongoing payments.

I can see your reluctance to risk paying 19 years worth of payments to get the full pension. Have you tried running the numbers to see what the pay back period is for you?
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