How Does Totalization Affect Me?

Category: 
Feb 21 2020 - 5:01pm

Hi Larry,
I was born in the UK and worked there (for a US airline) since the 90's and paid into the UK system. I got married and became a US resident and for the last 4 years have been paying FICA (I'm now 51). I'm eligible for pension in the UK and will be eligible for pension in the US by the time I am of retirement age. How does totalization affect me? Can I use the years of paying into the UK system and add them to my SSA benefits? OR do I collect pension from both countries? Very confusing... Any help would be appreciated!!

Hi,

Assuming that you have enough work credits to qualify for benefits from both the U.S. and from the U.K., the totalization agreement between those countries won't be a factor for you. You would simply file independently for your benefits from each country's Social Security program. You couldn't optionally choose to receive benefits from only one country and use a combination of your earnings from both countries to calculate your benefit rate.

The only way that totalization would likely affect you is if you don't have enough credits to qualify for benefits from one of the 2 countries based on their normal rules. For example, if you had at least 6 quarters of U.S. coverage but less than 40 quarters, your U.K. credits could be used to make you eligible for a U.S. totalization benefit. Social Security would then use a special formula to calculate your U.S. totalization benefit rate (https://secure.ssa.gov/apps10/poms.nsf/lnx/0201701200).

If you do end up with enough work credits to qualify independently for both U.S. and U.K. benefits and if you're drawing both benefits, your U.S. Social Security retirement benefit rate may be lower than it would normally be due to the Windfall Elimination Provision (WEP). WEP becomes involved when a person is receiving both U.S. Social Security retirement benefits and a pension based on their earnings that were exempt from U.S. Social Security taxes, such as a pension based on your work in the U.K. For more information about WEP and it's exceptions, refer to the following Social Security publication: https://www.ssa.gov/pubs/EN-05-10045.pdf.

Our software (https://maximizemysocialsecurity.com/purchase) is fully programmed to handle benefit calculations involving WEP, so you may want to consider using it to do your Social Security planning.

Best, Jerry