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WEP and the SSA

WEP and the SSA

Old Dec 1st 2016, 8:57 pm
  #31  
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Default Re: WEP and the SSA

For SSA policy on WEP recalculation and related questions, see:
https://drive.google.com/open?id=0Bz...W1UVVl5NWxRdnM

Please note that US Rep. Sarbanes represents only constituents in the 3rd district in Maryland. If you have questions about the information in the above-linked document, please contact your congressman, not Rep. Sarbanes (unless he happens to be your congressman).

Last edited by gpslouis; Dec 1st 2016 at 9:10 pm.
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Old Feb 23rd 2017, 10:38 pm
  #32  
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Default Re: WEP and the SSA

If I apply for SS at age 62 and I am not eligible for UK state pension until age 67, should I wait until I start receiving my UK state pension before I inform SSA?
Obviously I won't be in receipt of non SS pension for 5 years, so surely they don't apply WEP reduction until the point I am eligible for my UK state pension???

Do I have this correct?

Thanks
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Old Feb 23rd 2017, 11:26 pm
  #33  
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Default Re: WEP and the SSA

Originally Posted by Ms Moore View Post
If I apply for SS at age 62 and I am not eligible for UK state pension until age 67, should I wait until I start receiving my UK state pension before I inform SSA?
Obviously I won't be in receipt of non SS pension for 5 years, so surely they don't apply WEP reduction until the point I am eligible for my UK state pension???

Do I have this correct?

Thanks
Yes.

SSA should be informed of your UK pension only when you start to receive it (or shortly before).

Are you sure that you want to start taking SS at age 62? If you don't actually need the money at age 62, you might be better holding off until "full retirement age" (probably age 67 for you). Or maybe not.

The absolutely best free analyzer that I know of to help optimize your SS is at:

http://www.bedrockcapital.com/ssanalyze/

This particular calculator takes WEP into consideration.
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Old Feb 24th 2017, 2:25 am
  #34  
 
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Default Re: WEP and the SSA

Originally Posted by Ms Moore View Post
If I apply for SS at age 62 and I am not eligible for UK state pension until age 67, should I wait until I start receiving my UK state pension before I inform SSA?
Obviously I won't be in receipt of non SS pension for 5 years, so surely they don't apply WEP reduction until the point I am eligible for my UK state pension???

Do I have this correct?

Thanks
When my wife and I applied I can't remember if it was part of the online application, or when we were interviewed by the person at SS handling our application, but we were both asked about future pensions. If you are asked you would need to give whatever information is asked for.
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Old Feb 24th 2017, 7:20 am
  #35  
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Default Re: WEP and the SSA

Originally Posted by Ms Moore View Post
If I apply for SS at age 62 and I am not eligible for UK state pension until age 67, should I wait until I start receiving my UK state pension before I inform SSA?
Obviously I won't be in receipt of non SS pension for 5 years, so surely they don't apply WEP reduction until the point I am eligible for my UK state pension???

Do I have this correct?

Thanks
Yes, I believe you are right. I (maybe foolishly) told them about my future entitlement to the British state pension at the time I filled out the form to commence SS payments. The result was they bombarded me with form letters asking about foreign pensions, from then on. I simply ignored these letters, until such time as I actually became entitled to receive the British state pension.
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Old Feb 24th 2017, 9:52 pm
  #36  
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Default Re: WEP and the SSA

What about the other way around from the OP? Can I collect my UK pension at my state retirement age (66) without it affecting my Social Security in any way in the intervening four years if I wait until age 70 to file for Social Security?

I confess to struggling through the maze of WEP.
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Old Feb 24th 2017, 10:45 pm
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Default Re: WEP and the SSA

Originally Posted by Jellyfish View Post
What about the other way around from the OP? Can I collect my UK pension at my state retirement age (66) without it affecting my Social Security in any way in the intervening four years if I wait until age 70 to file for Social Security?

I confess to struggling through the maze of WEP.
If you are not collecting SS there is nothing to be affected for those 4 years.

How it affects the eventual calculation of WEP I recall is answered somewhere in this thread. http://britishexpats.com/forum/usa-5...curity-733297/
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Old Feb 25th 2017, 9:13 pm
  #38  
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Default Re: WEP and the SSA

Originally Posted by nun View Post
If you are doing drawdown over a number of years you won't be liable to any UK tax, just US and your 25% UK tax free amount will also be tax free in the US.
Has this been established conclusively? I have seen you and others state that you believe this is how it should work, on more than one forum, but at that time nobody had any evidence that the IRS would agree with this approach. Has anyone successfully established this?

I am doing drawdowns, which will continue for several years, but currently declaring it all as taxable, I do not want to be the guinea pig that becomes the court case to establish what is correct. If I see proof that the drawdown approach allows 25% to be non-taxable, then I will issue amended returns (I have only been doing this for 2 years).
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Old May 13th 2017, 1:08 pm
  #39  
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Default Re: WEP and the SSA

I have the option to pay additional class 3 NICs in the UK to increase my UK pension. I have only 25 years of NI and so the payments would make economic sense to top me up to say 35 years EXCEPT that I am unlikely to reach 30 years of SS. Am I right in understanding that effectively half of any pension increase I achieve( due to additional voluntary NICs) would be used to reduce my SS due to WEP? Thanks in advance
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Old May 13th 2017, 2:00 pm
  #40  
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Default Re: WEP and the SSA

Originally Posted by reltub View Post
I have the option to pay additional class 3 NICs in the UK to increase my UK pension. I have only 25 years of NI and so the payments would make economic sense to top me up to say 35 years EXCEPT that I am unlikely to reach 30 years of SS. Am I right in understanding that effectively half of any pension increase I achieve( due to additional voluntary NICs) would be used to reduce my SS due to WEP? Thanks in advance
No, because that portion of your British state pension that is derived from voluntary NICs is exempt from WEP.
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Old May 13th 2017, 3:51 pm
  #41  
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Default Re: WEP and the SSA

Originally Posted by reltub View Post
I have the option to pay additional class 3 NICs in the UK to increase my UK pension. I have only 25 years of NI and so the payments would make economic sense to top me up to say 35 years EXCEPT that I am unlikely to reach 30 years of SS. Am I right in understanding that effectively half of any pension increase I achieve( due to additional voluntary NICs) would be used to reduce my SS due to WEP? Thanks in advance
Are you eligible to pay any arrears of NI contributions? You Typically you can pay for the six most recent years, if you haven't already paid for those years, plus the current year. So if you are eligible for Class 2 (if you haven't applied for Class 2, I recommend you do so, because many people report being accepted when they didn't think they were eligible) you can get seven years of NI contributions for just over £1,000.
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Old May 13th 2017, 6:29 pm
  #42  
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Default Re: WEP and the SSA

I don't think I can apply for class 2 as I haven't paid for almost 17 years. Either way, as there is no impact on WEP it seems to be a great deal as I calculate it. Even allowing for the fact that the additional pension value would be extra income and therefore taxable, it seems like the payback period is still less than 5 years.

Does anyone think there is a risk that the UK govt would change the rules allowing US based people ( I am a resident but still a Brit) to receive the full state pension ?
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Old May 13th 2017, 7:17 pm
  #43  
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Default Re: WEP and the SSA

Originally Posted by reltub View Post
Does anyone think there is a risk that the UK govt would change the rules allowing US based people ( I am a resident but still a Brit) to receive the full state pension ?
Well it would seem to make sense to restrict NI contributions for non-residents, it doesn't seem fair for the UK taxpayer to be heavily subsidizing non-residents' pensions, the US doesn't do the same. But my guess is that any change would not affect past contributors.
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Old May 13th 2017, 10:00 pm
  #44  
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Default Re: WEP and the SSA

Originally Posted by reltub View Post
I don't think I can apply for class 2 as I haven't paid for almost 17 years. Either way, as there is no impact on WEP it seems to be a great deal .....
The time gap has nothing to do with, nothing at all. ..... But if you want to pay £715/yr when you may well be eligible to buy seven years for just over £1,000, be my guest.
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Old May 14th 2017, 1:51 pm
  #45  
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Default Re: WEP and the SSA

Originally Posted by Asg123 View Post
Well it would seem to make sense to restrict NI contributions for non-residents, it doesn't seem fair for the UK taxpayer to be heavily subsidizing non-residents' pensions, the US doesn't do the same. But my guess is that any change would not affect past contributors.
Voluntary NI for expats was brought in so that they could keep up with their payments and would not have a hole in them when they returned to the UK. While the expat is not in the UK they won't be using any UK benefits so you could argue that the UK is actually getting a good deal as they are getting payments from foreign earnings that would normally go un taxed. The level of that payment has been too low for a long time and the replacement of Class 2 with the higher Class 3 payment is long over due.
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