Social Security questions

I would think that it is the same form as the benefits are the same regardless of citizenship, plus the form does provide fields for one to enter UK address, UK NI number etc.  I can't think what else a UK citizen only form would ask for.  The US SSN will provide all the details needed at the US end and the NI number similar information at the UK end.

At the end of the day you should be receiving a phone call to discuss the application in more detail anyway. Eventually they are going to want details of your UK OAP to calculate how much WEP will reduce your SS hence, I think, the request for your NI number.

Thanks for that, I figured as much.  Any advice on when I should make initial contact, given my 62nd birthday is towards the end of September?

I would start 3 months ahead of your birthday.

Excellent - that'll be this week then.  I'd better start getting my ducks in a row.  Cheers.

Excellent - that'll be this week then.  I'd better start getting my ducks in a row.  Cheers.

Good luck. Let us know how you get on.

I will keep you updated, for sure.

Actually, I guess I have another question.  I've played a little with the WEP calculator on the SSA website (and the more complicated Windows one) and I think I understood what I was doing, but just to confirm: when they ask about other pensions, are they only interested in my UK state pension?  I also have a 401(k) from the US, which I have started taking payments from, and two company pensions in the UK, which I haven't started taking yet, although in the case of one of them I could take it now (with a penalty) if I wanted.  Getting a forecast of my UK state pension is easy, but in the aforementioned UK company pension I can only ask for a quote for taking it now; they won't project forward to, say, 65.

I will keep you updated, for sure.

Actually, I guess I have another question.  I've played a little with the WEP calculator on the SSA website (and the more complicated Windows one) and I think I understood what I was doing, but just to confirm: when they ask about other pensions, are they only interested in my UK state pension?  I also have a 401(k) from the US, which I have started taking payments from, and two company pensions in the UK, which I haven't started taking yet, although in the case of one of them I could take it now (with a penalty) if I wanted.  Getting a forecast of my UK state pension is easy, but in the aforementioned UK company pension I can only ask for a quote for taking it now; they won't project forward to, say, 65.

I think all you can do is answer honestly and give the information you have.

Of course.  I was more concerned about whether I need to obtain forecasts for my UK company pensions, which in one case is easy but in the other case is impossible because they don't give forecasts.  Anyway, it'll all come out in the wash.

Of course.  I was more concerned about whether I need to obtain forecasts for my UK company pensions, which in one case is easy but in the other case is impossible because they don't give forecasts.  Anyway, it'll all come out in the wash.

Tell them exactly that, then see where it takes you. They are the ones to tell you whether an estimate is essential or not, and if you can’t get a future one for your private pension then they will tell you if current value is enough. There is a max that your SS can be reduced and the OAP and private pension current estimates may cause you to hit that max anyway, regardless of future increases.

If I may jump in on this....how do they handle the situation where you will receive a UK state pension and / or a private UK pension sometime in the future? Let's say you take US SS at 62 - and don't take UK pension until 70 - are those 8 years WEP free? If so that probably affects the decision as to whether to defer US SS, no? I.e. it might make sense to take US SS early  rather than take both US and UK at the same time.

If private UK pensions attract WEP maybe it makes sense to cash those in before receiving US SS?

If the FBU ever get back to me, I may be able to answer that question.  I'm in pretty much that situation - I want to take my SS at 62, I could take one of my UK company pensions now (but with some penalty, so will probably wait until 65) and UK state pension at 66.  I'm assuming they'll want to know my projected UK state pension.  There's nothing I can really tell them about my UK company pension though, because although I could take it now, there's no way to get a projected figure for it for when I'm 65.

Crowman - I just sent you a PM.

A

When the FBU conduct a formal application procedure with the claimant to commence SS (usually by an arranged phone call), it will ask 1) is the claimant already receiving a non-FICA covered pension, and 2) will the claimant be receiving, in the future, a non-FICA covered pension and if so, at approximately what date? In this case, a non-FICA covered pension can include the UK State pension or a UK company (works) pension. If the pension was a personal pension not associated with work (IE the US equivalent would not have FICA withheld) WEP would not apply (the pension is a voluntary contribution). It's assumed if an employer had contributed to the personal pension, it would be WEPed.

WEP is only applied to a SS pension once the non-FICA covered pension has commenced drawdown. So, if one takes SS at 66, but takes the UK State pension or a UK company pension at 68, WEP would not commence until age 68. In the interval, a normal non-WEPed pension would be paid. The claimant is required to notify the SSA once a non-FICA covered pension starts drawdown if that occurs after commencement of SS.

WEP applies for those with less than 30 years of SS contributions. For those with less than 20 years SS contributions, the maximum amount of WEP is limited to 50% of the ELY amount for the year of eligibility (at 62), or 50% of the total foreign pension(s) amount, whichever is the smaller (this is important!).

Roughly 18 months ago, the SS changed their web site to include both early and delayed SS retirements. Anyone wishing to calculate the optimum time to claim SS should read and fully understand 1) how much will the WEP amount be, and 2) how does that amount vary according to when the SS pension is taken if early or delayed.

Scroll down on the following SSA page for info on early and delayed SS pensions:
https://www.ssa.gov/planners/retire/wep.html

Thanks very useful - thanks. I assume it gets more complicated if a private pension - such as a SIPP - were contributed to by both the employee and the employer - I suppose you would have to try and figure out which contributions were which and it's pro rated? You italicized assumed - indicating there's no ruling on this?

You said this:

<<WEP applies for those with less than 30 years of SS contributions. For those with less than 20 years SS contributions, the maximum amount of WEP is limited to 50% of the ELY amount for the year of eligibility (at 62), or 50% of the total foreign pension(s) amount, whichever is the smaller (this is important!).>>

If my US SS pension at  62 was 1,100, for example, then the maximum I could loose would be $550? Isn't there an absolute maximum as well?

I believe the UK state pension is now 168 pounds / week - 722 per month. Say an exchange rate of 1.3 is $933 / month. So the UK pension will be lower than  the ELY amount so I would loose 50% of 933. more or less....

Thanks very useful - thanks. I assume it gets more complicated if a private pension - such as a SIPP - were contributed to by both the employee and the employer - I suppose you would have to try and figure out which contributions were which and it's pro rated? You italicized assumed - indicating there's no ruling on this?

"Assume" in this instance means I don't know for certain. SIPPs were only introduced in 1989, and the population benefiting from SIPPs has only recently began to start claiming SS. There have been no examples that I've seen of how a "SIPP" pension with employer contributions has been treated. The FBU at the Embassy will have an established stance, but an SS office in Keokuk Iowa (for a UK expat in the States) may have a different answer. I don't know how the FBU treats a "SIPP with company contributions".

If you wish to spend the time, the answer may lie in POMS, the SSA manual. You could start with the following page and go from there:
https://secure.ssa.gov/apps10/poms.nsf/lnx/0300605360

You said this:

<<WEP applies for those with less than 30 years of SS contributions. For those with less than 20 years SS contributions, the maximum amount of WEP is limited to 50% of the ELY amount for the year of eligibility (at 62), or 50% of the total foreign pension(s) amount, whichever is the smaller (this is important!).>>

If my US SS pension at  62 was 1,100, for example, then the maximum I could loose would be $550? Isn't there an absolute maximum as well?

I believe the UK state pension is now 168 pounds / week - 722 per month. Say an exchange rate of 1.3 is $933 / month. So the UK pension will be lower than  the ELY amount so I would loose 50% of 933. more or less....

You need to start with your ELY (eligibility year). The ELY dictates the Max WEP amount.

For example, if you turned 62 in 2019, your ELY amount would be $926. For those with or less than 20 years of substantial earnings, 50% of that amount would be $463. For someone with 25 years of substantial earnings, the % reduction amount would be $231.50.

See the following page:
https://www.ssa.gov/planners/retire/wep-chart.html

Start with the foreign source non-FICA covered pension. If your foreign source non-FICA covered pension were $1,400/mo., 50% of that is  $700. In this case, the Max WEP rules would apply, and $463 (the maximum WEP that can be used for a 2019 ELY) is less than $700, so WEP would be $463. Therefore, in your example, if the original pre-WEP SSA amount of the SS pension is $1,100/mo., the after WEP amount would be (1,100 - 463) $637.

  If your foreign source non-FICA covered pension were $800/mo., 50% of that is  $400. In this case, the Max WEP rules would apply to the $400 since it is less than the Max WEP amount of $463 (the maximum WEP that can be used for a 2019 ELY). Therefore, in your example, if the original pre-WEP SSA amount of the SS pension is $1,100/mo., the after WEP amount would be (1,100 - 400) $700.

If the SS pension were delayed after 66, the SS amount would increase, but the WEP amount would also increase. (See the link in my previous post).

There is no minimum amount for WEP. A foreign source non-contributing pension of $10/mo. would cause a WEP amount of $5 to be applied to the SS pension.

If someone (ELY 2019 and less than 20 years of substantial contributions) had a foreign pension of $950/mo., WEP would be $463, the Max WEP amount.
If another person (same ELY, same years) had a foreign pension of $9,500/mo., WEP would still be $463 since the SS pension can only be reduced up to the Max WEP amount.

That's very clear - thank you. In my case, my rough spreadsheet indicates that I am better off claiming reduced US SS at 62. This generates more total income at ages 70, 75, and 80.  I will incur maximum WEP regardless so the issue of SIPP treatment will be irrelevant unless I take SIPP income before UK pension.

The question then becomes when to take the UK state pension. If I wait until 70 I will have had no WEP for 8 years, and my UK pension has increased at >5% per year. At 80 I would be slightly better off by delaying UK pension until 70 and it gets better the longer I live, but I like the idea of more income while younger so I will probably go with UK pension at my full retirement age - 66.

I am currently taking a tax free monthly income from my SIPP but I can turn that on and off at will so I will turn it off at 62 when I claim US SS.