NTXIF 2024

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

by | Jan 1, 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. 1 issue or subscribe online.

By Russell Gloor • AMAC Certified Social Security Advisor

Subscribe RH Love

0 Comments

Order photos

Related News

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
Pitch made for new power plants

Pitch made for new power plants

Lt. Gov Dan Patrick joined with the world’s largest investment firm to pitch investors on building natural gas power plants in Texas at a summit held last week in Houston. Patrick and BlackRock CEO Larry Fink shared the stage as they attempted to persuade investors to...

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
A range of options

A range of options

My great grandparents lived on a homestead. They cooked on a wood stove. Most of us today have no idea how good we’ve got it. For my great grandparents’ generation, remodeling the kitchen meant picking a different place to stack the wood. When I was growing up in...

read more
A word from our sponsors

A word from our sponsors

Commercials used to be great. They used to be an art form. They used to be fun. Today’s advertising is boring in comparison. Television commercials were something to which I looked forward when I was a kid. Some were better developed and more interesting than the...

read more
Quakes prompt officials to limit disposal wells

Quakes prompt officials to limit disposal wells

The Texas Railroad Commission has suspended nearly two dozen permits that allow oil and gas companies to inject saltwater into the ground, which regulators say has contributed to increased earthquakes of greater magnitude in West Texas. The Austin American Statesman...

read more
The Walking Dad

The Walking Dad

It’s obvious that I have to wait to die until after everyone else in my home goes. Otherwise, every light in the house will be left on for all of eternity. My dad used to say that I could leave on all of the lights whenever I started paying the bills. That time has...

read more
Small town living: some leave, some come back

Small town living: some leave, some come back

Small town Ashdown, Arkansas. John Moore You learn things when you grow up in a small town. Things you don’t learn if you grow up anywhere else. Things that are special. I was born in a small town. But I didn’t stay. I left for the same reasons other folks leave their...

read more
There’s ‘snow’ ice cream quite like it!

There’s ‘snow’ ice cream quite like it!

It didn’t snow much in Ashdown, Arkansas in the 1960s. It doesn’t snow there much now. But when it did, and when it does, kids there know exactly what to do. Beg their moms to make snow ice cream. It was my mother who showed my sister and me that you could make ice...

read more
Order photos