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How will my foreign pension impact my Social Security benefits?


Published: April 3, 2024


Full question: I am a 72 year old dual UK-US citizen and draw about $2,000 in US Social Security monthly and pay taxes in the UK on an income of about $60K, including the US social security amount. I still work and I pay into a defined contribution pension scheme valued at about $50K, at the moment. If decide to take 3 annual payments of about $16K and close the pension, how would this affect/impact the social security payments I receive from the USA?


Hello,

If you are collecting Social Security retirement benefits and will be collecting a foreign pension, the Windfall Elimination Provision, WEP, may reduce the amount of your benefit.

Whether the WEP applies to your foreign pension may depend on:

  1. If your UK employer (paying the pension) withheld U.S. Social Security taxes from your pay and

2. The details in the US-UK totalization agreement.

These agreements prevent Americans working abroad, and foreign nationals working in the United States, from having to pay into both countries’ retirement systems on the same income.

Social Security decision making is complex and therefore it is important to take your unique circumstances into account. For personalized assistance, schedule a call or email me today and let's talk about your options.



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