Rotary Golf 2024

Ask Rusty – Will foreign earnings count toward my U.S. Social Security?

by | Jan 2, 2020 | Opinion

Dear Rusty: I am looking for advice on how our recent decision to take up work in the United Kingdom will affect our U.S. Social Security benefits. I want to understand whether we need to be prepared for a loss in future Social Security benefits, in comparison to what we’d get by continuing to work in the U.S. Signed: Working Abroad

Dear Working Abroad: I’ll start by noting that the U.S. and the U.K. have a bilateral “totalization” agreement which helps those who have worked in both countries qualify for Social Security benefits in the other, but this relates only to you earning enough credits to be eligible for benefits. Your foreign earned income won’t be included when computing your U.S. Social Security benefits.

Under the “totalization agreement if, from your work in the U.S., you have earned only 30 credits toward the 40 needed to qualify for U.S. Social Security benefits, and you went to work in the U.K. and earned 10 credits toward the U.K.’s eligibility requirement, those 10 U.K. credits would be added to your 30 U.S. credits to give you the 40 needed to be eligible for U.S. Social Security benefits. However, your U.S. Social Security benefit when it is claimed would be based upon your U.S. earned income only and would not include your U.K. earned income.

To determine your U.S. benefit amount, Social Security uses the highest-earning 35 years of your U.S. earned income during which SS FICA payroll taxes were withheld from your earnings. Your lifetime U.S. earnings are adjusted for inflation and the highest earning 35 years are used to arrive at your “average indexed monthly earnings” (AIME). Your AIME is then used to determine your “primary insurance amount” (PIA), which is the benefit you are due at your full retirement age. If you don’t have a full 35 years of U.S. earnings because you spent a number of years working in the U.K., Social Security will put in enough zeros to make 35 years. Those zeros in your earnings record will reduce your U.S. Social Security benefit amount.

So, by comparison, if you were to remain in the U.S. and continue working (and contributing to SS) here, your eventual Social Security benefits will be higher, because your U.S. earnings will count toward your AIME, and will eliminate some or all of any zero years in the 35 used to compute your benefit. Conversely, your earnings from working in the U.K. will not count toward your U.S. Social Security earnings history (won’t be included in your AIME), meaning you’ll show zeros in your U.S. earnings record for the years you worked in the U.K, and thus your U.S. SS benefit will be lower than if you instead continued to work in the U.S. Of course, if you already have at least 35 years of U.S. earnings you will not have zeros in your work history, but your U.K. earnings still will not count toward your U.S. Social Security benefit and will not eliminate any lower-earning years in your 35-year U.S. work history.

 

For more stories like this, see the Jan. 2 issue or subscribe online.

 

By Russell Gloor • AMAC Certified Social Security Advisor

Photos online

0 Comments

Public Notice - Subscribe

Related News

Fixer Uppers

Fixer Uppers

Recently, I saw something I haven’t seen in many years. A young man driving a car he was fixing up. It was an older Mustang. By older I mean a 90’s model. The car had spots of primer, there were a few dents, and the exhaust system appeared to be loose. By John Moore...

read more
Who’s counting when it comes to columns?

Who’s counting when it comes to columns?

When this newspaper column began in 2014, my wife asked me a question. Wife: “How long do you intend to write this column?” Me: “Oh, I don’t know. I guess I’ll write 500 of them and then hang it up. This column is number 500. By Bob Moore For more stories about the...

read more
Don’t eat that

Don’t eat that

When I was a kid, I had to sneak around if I wanted to eat certain things. Now that I’m an adult and in charge, I still have to sneak around if I want to eat certain things. I miss the days when no one knew anything about gluten, trans fats, cholesterol,...

read more
Texas counties among nation’s fastest growing

Texas counties among nation’s fastest growing

Recent estimates from the U.S. Census Bureau indicate that six of the 10 fastest-growing counties in the United States from 2022 to 2023 were in Texas. According to the Texas Tribune, Kaufman County, just east of Dallas, led the list with a 7.6% increase in new...

read more
Read this. Build a stronger community.

Read this. Build a stronger community.

Saddened. Embarrassed. Determined. These three words evoke distinct feelings and emotions. In the context of an opinion piece we ran in the paper four and a half years ago, they described the aftermath of a community that lost its newspaper. After 130 years in...

read more
Just like mom used to make

Just like mom used to make

Men have man caves because they want the room they had as a kid back. They also spend the rest of their days trying to find the recipes of their favorite childhood dishes. The ones like their mom used to make. By John Moore For more on this story see the March 7, 2024...

read more
Pet ownership: A lifetime commitment

Pet ownership: A lifetime commitment

He was crossing the road. Over and over. I was surprised someone hadn’t hit him with their car. I was also surprised the coyotes hadn’t gotten him. It was 9 o’clock at night and according to the residents of the small strip of country road, he’d been out there for a...

read more
Hold, please

Hold, please

It appears that telephone landlines may be on their way out. CNN Business reported that recently, AT&T applied for a waiver in the state of California to stop servicing traditional landlines. Both AT&T and Verizon have both said they want to move away from...

read more
Dewey or don’t we?

Dewey or don’t we?

On Christmas Eve 2008, there were just three of us working in the office. Well, technically, there was one of us working, the other two were there. A couple of the young ladies on staff either didn’t have enough vacation time built up or they were saving it for...

read more
Public Notice - Subscribe