Pricey Rusty: I’m 57 years outdated, was born within the UK, and since 1988 have labored within the US.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 effectively 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 will likely be appreciated. Signed: Frightened
Pricey Frightened: If in case you have 30 or extra years of U.S. employment the place you paid into Social Security through payroll taxes on “substantial” earnings, your U.Ok. pension won’t have an effect on your U.S. Social Security profit once you declare it. Social Security’s definition of “substantial” earnings is totally different for every year however, usually, if you happen to labored full time within the U.S. and paid into Social Security through 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 if 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 will likely be diminished as a result of your U.Ok. pension. The quantity of discount would rely upon what number of years of considerable SS-covered earnings you could have, however in no case can the discount be greater than 50% of your U.Ok. pension.
If wanted, you will get your Earnings Assertion from Social Security, which can present your precise taxable SS earnings for every year to match towards the WEP substantial earnings chart discovered on the above hyperlink. The simplest strategy to get your Earnings Assertion is through your “My Social Security” on-line account. When 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: If in case 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; if in case you have lower than 30 years of contributions to SS, it should. As chances are you’ll know, you can’t acquire your U.S. Social Security till you’re no less than age 62, however if you happen to declare at that age your profit quantity will likely be diminished by 30%. You’ll attain your full retirement age at age 67, and that’s the level at which you’re going to get 100% of what you’ve earned by working within the U.S. – topic to WEP discount solely if in case you have lower than 30 years of contributions to Social Security.
Russell Gloor is an Affiliation of Mature American Residents licensed social security advisor. To submit a query, go to amacfoundation.org/applications/social-security-advisory or e mail [email protected]