Never EVER underestimate the value of US Social Security Contributions

I suspect that there are many readers of this forum (probably the majority) who have spent at least some of their working life contributing to both the UK and US Social Security Systems.

Some, (myself included) only contributed for just a few years (less than 10) into the US system and spent most of their working career paying into the UK system. How many have disregarded their 'meagre' credits into the US system and then potentially walked away from what could be a nice little second pension?

I was well into my 50's and was on track to ensuring I would receive a full UK state pension (OAP) before I took another look at those US credits. Surprisingly I had accrued 36 credits but at that level would not be entitled to anything. I then started to look at what a pension would be worth if I could get to the magical 40 credits.

Armed with my full US earnings history and SS contributions (what an anorak!) I downloaded the US SS benefits calculator (found here: https://www.ssa.gov/oact/anypia/anypia.html) and set about plugging in all the data.

To my absolute surprise, even after accounting for the dreaded WEP, I was still looking at a potential US SS pension of over $1,000 per month - plus a spousal pension at another 50%. Certainly not to be sniffed at!. Unlike the UK, the US system is earnings related.

So how could I get the additional credits I needed?

The last time I'd looked at the system (in the previous century!), the credits were referred to as quarters - because by working 4 quarters each year, you got the maximum 4 quarters as credits. Well the system changed some time ago and now it is simply credits instead of quarters - still only 4 credits maximum per year though. In 2022 you earn one credit for each $1,510 of earnings. So $6,040 of US SS eligible earnings in 2022 gets you the maximum 4 credits.

My initial concern that I'd need to work for a full year in the US to get over the threshold simply evaporated - all I needed to do was earn enough ($5,200 at the time for me) to get the 4 required credits.

I was fortunate enough to secure a 4 week consulting assignment in the US and earned the required amount - tbh though, I'd have taken a holiday to Florida and bagged groceries for as long as it took to get the 4 credits.

Roll on a few years and I'm now drawing both my UK & US pensions and with the current exchange rate my US SS pension (earned over 9 years and 1 month) is worth more than my UK state pension (the maximum - and earned over 35 years).

The moral of this story - Never EVER underestimate the real value of US Social Security Contributions - especially if you were a high earner - and if you're short a few credits, do the maths and allow yourself enough time to get over the threshold.

I've often wondered about this.  Where do I start?  I worked as a student from 1983 until about 1989, then full time until I left the states in 1995.  Do I have a chance of getting anything?  Please don't tell me I have to go bag groceries in Florida, I've got PTSD from my time working in grocery stores!

Another interesting facet - if you are self-employed in the UK, you have to actively opt out of paying US self-employment taxes, including social security. You can, of course, choose NOT to opt out. So you then pay "extra" tax, but if it's pushing you over the 40 credits, or even if you're above it but before the 90% bend point, it's a HUGE return on investment.

So if you're looking for credits and don't want to work in the US, you can do some kind of self-employed gig in the UK (part time - drop shipping on Amazon/eBay, consulting, handmade crafts, whatever). Pay US self-employment taxes, get Social Security credits.

I've often wondered about this.  Where do I start?  I worked as a student from 1983 until about 1989, then full time until I left the states in 1995.  Do I have a chance of getting anything?  Please don't tell me I have to go bag groceries in Florida, I've got PTSD from my time working in grocery stores!

Lots of different questions here:

1. Did you work between 1983 & 1989 and pay SS?
2. Assuming you paid SS between 1989 and 1995, you could have 24 credits for this to start with.

Assuming you're a USC, then first place to start is with your Social Security record - setting up an on-line account (My Social Security) is best - writing to them (Baltimore) is fraught with unresponsiveness, but always an option.

This will tell you how many credits you already have - then probably do what I did and do the maths - work out how far away you are from qualifying for a pension and how long you have to make up the shortfall. Then (if it's worth it to you) build a strategy to get you over the qualifying threshold.

I was well into my 50's and was on track to ensuring I would receive a full UK state pension (OAP) before I took another look at those US credits. Surprisingly I had accrued 36 credits but at that level would not be entitled to anything. I then started to look at what a pension would be worth if I could get to the magical 40 credits.

If you will qualify for a UK State Pension (at least 10 years of contributions), according to the US / UK Totalisation Agreement, you are entitled to a US SSA benefit based on your 36 quarters of US SSA contributions. You will not need 40 quarters in order to qualify. The benefit will only be equal to the calculated amount for the 36 quarters.

It's possible if the totalisation agreement is used to qualify, WEP will not be applied to the SSA benefit. You'll need to verify this.  If you have 40 quarters and qualify, WEP will apply.

If WEP is not applied for benefits derived via the agreement, you may want to STOP NOW; you're in an ideal situation.

https://www.ssa.gov/international/Agreement_Texts/uk.html#part3
Article 8

https://secure.ssa.gov/poms.nsf/lnx/0300605386

If you will qualify for a UK State Pension (at least 10 years of contributions), according to the US / UK Totalisation Agreement, you are entitled to a US SSA benefit based on your 36 quarters of US SSA contributions. You will not need 40 quarters in order to qualify. The benefit will only be equal to the calculated amount for the 36 quarters.

It's possible if the totalisation agreement is used to qualify, WEP will not be applied to the SSA benefit. You'll need to verify this.  If you have 40 quarters and qualify, WEP will apply.

If WEP is not applied for benefits derived via the agreement, you may want to STOP NOW; you're in an ideal situation.

https://www.ssa.gov/international/Agreement_Texts/uk.html#part3
Article 8

https://secure.ssa.gov/poms.nsf/lnx/0300605386

Thanks so much for this @OAP - very useful - something I wasn't aware of back in 2017 when I earned the additional 4 credits I needed to get me over the 40.

To satisfy my morbid curiosity, I did a little more research and found the following also:

https://www.ssa.gov/policy/docs/ssb/v78n4/v78n4p1.html#appB

Scrolling down to Appendix B gives a great worked example. I followed the calculations and applied my own actual earnings to see what it would have been if I'd stayed on the 36 credits and used Totalisation. In round terms, even with WEP I'd have been more than $400 per month worse off if I'd used Totalisation.

I guess everyone's circumstances are different - but it certainly pays to know as much as possible (appreciating that it is a VERY complex area) and as I said in the first post - make sure you do the maths first (and as early as possible) and then work out a strategy - before you hit retirement age!

Thanks so much for this @OAP - very useful - something I wasn't aware of back in 2017 when I earned the additional 4 credits I needed to get me over the 40.

To satisfy my morbid curiosity, I did a little more research and found the following also:

https://www.ssa.gov/policy/docs/ssb/v78n4/v78n4p1.html#appB

Scrolling down to Appendix B gives a great worked example. I followed the calculations and applied my own actual earnings to see what it would have been if I'd stayed on the 36 credits and used Totalisation. In round terms, even with WEP I'd have been more than $400 per month worse off if I'd used Totalisation.

I guess everyone's circumstances are different - but it certainly pays to know as much as possible (appreciating that it is a VERY complex area) and as I said in the first post - make sure you do the maths first (and as early as possible) and then work out a strategy - before you hit retirement age!

That was a good exercise, thanks for doing that, not surprising but good to see an actual worked example.

I'm in an unusual situation where I have an unqualified US pension (~$20k) through a SERPS arrangement with my former US company. It is paid through a W2 that now has FICA and Medicare withholdings, a change the IRS made to SERPS payments a couple of years ago. While that was a bit irritating when I first got the news it means my years of SS contributions goes up each year. I am waiting until age 70 to collect so that my wife will continue to get a larger sum after I die, however it does have an advantage that for every year I pay in, not only does my future SS benefits go up by the usual amount, WEP deductions  go down by about $50/month. When I retired I was on 23 years of contributions and by the time I start receiving I will be on 28 years. Apart from 5 more years of non-zero earnings, WEP starts going down, I think in a straight line, between 20 years and 30 years so the IRS may actually have done me a favor.

I've often wondered about this.  Where do I start?  I worked as a student from 1983 until about 1989, then full time until I left the states in 1995.  Do I have a chance of getting anything?  Please don't tell me I have to go bag groceries in Florida, I've got PTSD from my time working in grocery stores!

I suspect you do.  Have a look at the SSA website and see what it says.  https://www.ssa.gov/myaccount/

I looked the other week (with all that I have going on) and my husband and children will get $4,000 a month based on my contributions as Survivor Benefits (which they will NOT need of course because I'm not going anywhere).  But it's real money! 

I look forward to claiming in retirement. 

That was a good exercise, thanks for doing that, not surprising but good to see an actual worked example.

I'm in an unusual situation where I have an unqualified US pension (~$20k) through a SERPS arrangement with my former US company. It is paid through a W2 that now has FICA and Medicare withholdings, a change the IRS made to SERPS payments a couple of years ago. While that was a bit irritating when I first got the news it means my years of SS contributions goes up each year. I am waiting until age 70 to collect so that my wife will continue to get a larger sum after I die, however it does have an advantage that for every year I pay in, not only does my future SS benefits go up by the usual amount, WEP deductions  go down by about $50/month. When I retired I was on 23 years of contributions and by the time I start receiving I will be on 28 years. Apart from 5 more years of non-zero earnings, WEP starts going down, I think in a straight line, between 20 years and 30 years so the IRS may actually have done me a favor.

There's even the ongoing discussion about bi-partisan efforts to eliminate WEP:

https://www.ncpssm.org/entitledtoknow/bill-to-repeal-social-security-wep-gpo-advances-out-of-committee/

Unlikely to happen I know, but stranger things have happened and we can all dream on.....................

There's even the ongoing discussion about bi-partisan efforts to eliminate WEP:

https://www.ncpssm.org/entitledtoknow/bill-to-repeal-social-security-wep-gpo-advances-out-of-committee/

Unlikely to happen I know, but stranger things have happened and we can all dream on.....................

I'm dreaming, I'm dreaming .....

I'm dreaming, I'm dreaming .....

Here's another (slightly more positive) report:

https://www.myfederalretirement.com/hr-82-house-vote/

Here's another (slightly more positive) report:

https://www.myfederalretirement.com/hr-82-house-vote/

Definitely more promising.  First time such a bill has actually made it into committee.  Still got to get passed by the Senate although the last line in that article does provide a further glimmer of hope, although the Senate bill is proposed by a Democrat so is unlikely to make the cut in the near future.

There is a similar bill in the Senate proposed by Senator Sherrod Brown (D-OH) with 42 cosponsors.

I suspect you do.  Have a look at the SSA website and see what it says.  https://www.ssa.gov/myaccount/

I looked the other week (with all that I have going on) and my husband and children will get $4,000 a month based on my contributions as Survivor Benefits (which they will NOT need of course because I'm not going anywhere).  But it's real money! 

I look forward to claiming in retirement. 

Ok, so I went to have a look at my future benefits. It says you have to have a US mailing address….ummm I don’t have one. So how have you managed? I really would like to know just in case I ever get to retire!


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I use my parents address but I’m surprised at the limitation of requiring a US address.  I believe there are lots of services that can help with an address if needed.

Ok, so I went to have a look at my future benefits. It says you have to have a US mailing address….ummm I don’t have one. So how have you managed? I really would like to know just in case I ever get to retire!


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It's possible to get access to both an online IRS & online SS account by using id.me without having a US mailing address. It's a bit of a convoluted process but it does work and certainly helps having on-line access. More details here:

https://talk.uk-yankee.com/index.php?topic=99944.0

Read the whole thread - it requires an online zoom interview - but it works - I went through it as have others. Good luck