reltub

My initial question is does anyone know of a professional adviser who will have a handle on this ?

nun

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.

kodokan

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.

nun

Here is how the SSA determines the WEP amount if you have a defined contribution lump sum rather than an annuity or pension payment. It takes the lump sum and divides by a actuarial figure to calculate a monthly amount based on your age and life expectancy. This is similar to how RMDs and 72t distributions are calculated.

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.

reltub

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 ?

nun

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.

reltub

Many thanks for the input.

robin1234

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.

nun

In MA the state does not pay SS....MTRS is part of the state pension system and if the retiree has either a DC plan or takes a lump sum the state should contact SSA with the equivalent annuity amount. It seems strange that SSA would tell you it's not relevant.

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.

reltub

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 ?

lansbury

As you want tax advice as well, the one guy most of us would recommend is Peter Newton at US - UK Tax Preparation and Advice | BritishExpatsTax.Com. However people have reported difficulty getting hold of him and that he doesn't seem to be taking on new clients. You could try calling the number on the web site, you may have better luck.

robin1234

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.

mrken30

There is a previous thread about UK/US tax advisors

http://britishexpats.com/forum/usa-5...dation-868962/

Disenchanted

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.

Vespagirl69

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.