Ask Rusty – Will My UK Pension Have an effect on My US Social Security?
Expensive Rusty: I’m 57 years previous, was born within the UK, and since 1988 have labored within the US. I’ve at all times paid US taxes and Social Security. For the final 20 years, my annual revenue has sometimes been nicely north of $100K. In recent times I’ve made voluntary funds to the UK Nationwide Insurance coverage system seeking to declare a retirement profit from the UK in addition to from the US. My concern is that if I declare the UK profit, this can have an effect on my US Social Security declare. Any perception you possibly can share shall be appreciated. Signed: Apprehensive
Expensive Apprehensive: When you have 30 or extra years of U.S. employment the place you paid into Social Security by way of payroll taxes on “substantial” earnings, your U.Ok. pension won’t have an effect on your U.S. Social Security profit whenever you declare it. Social Security’s definition of “substantial” earnings is totally different for annually however, usually, when you labored full time within the U.S. and paid into Social Security by way of payroll taxes since 1988, the so-called Windfall Elimination Provision (WEP) received’t have an effect on your US Social Security advantages.
Here’s a hyperlink to Social Security’s WEP definition which features a desk of “substantial” earnings wanted to rely for WEP functions: www.ssa.gov/pubs/EN-05-10045.pdf. The doc at this hyperlink additionally describes how WEP works in case you have lower than 30 years of considerable U.S. earnings. With lower than 30 years of considerable earnings on which you paid into Social Security your U.S. profit shall be diminished because of your U.Ok. pension. The quantity of discount would depend on what number of years of considerable SS-covered earnings you may have, however in no case can the discount be greater than 50% of your U.Ok. pension.
If wanted, you may get your Earnings Assertion from Social Security, which can present your precise taxable SS earnings for annually to match towards the WEP substantial earnings chart discovered on the above hyperlink. The simplest approach to get your Earnings Assertion is by way of your “My Social Security” on-line account. In case you haven’t but arrange your private on-line account with SS, you possibly can simply achieve this at this hyperlink: www.ssa.gov/myaccount.
So, the underside line is that this: When you have contributed to U.S. Social Security from “substantial” earnings for no less than 30 years, your Social Security profit won’t be affected by your U.Ok. pension; in case you have lower than 30 years of contributions to SS, it is going to. As you might know, you can not accumulate your U.S. Social Security till you might be no less than age 62, however when you declare at that age your profit quantity shall be diminished by 30%. You’ll attain your full retirement age at age 67, and that’s the level at which you’ll get 100% of what you’ve earned by working within the U.S. – topic to WEP discount solely in case you have lower than 30 years of contributions to Social Security.
This text is meant for info functions solely and doesn’t symbolize authorized or monetary steerage. It presents the opinions and interpretations of the AMAC Basis’s employees, skilled and accredited by the Nationwide Social Security Affiliation (NSSA). NSSA and the AMAC Basis and its employees will not be affiliated with or endorsed by the Social Security Administration or every other governmental entity. To submit a query, go to our web site (amacfoundation.org/packages/social-security-advisory) or e-mail us at [email protected]