Will claiming UK pension reduce my Social Security benefits? Windfall Elimination confusion

Thanks for explaining. I have 27 years of what I think counts as substantial earnings. Is there a specific dollar threshold that defines 'substantial'? And do I have to tell SSA about the UK pension or do they find out automatically?

Do you have to report this to Social Security yourself or did they find out some other way? I'm wondering how they even know about foreign pensions.

same thing happend to my neighbor. she got a small pension from mexico and ss cut her check by like $200. total ripoff

Thank you! I didn't know about the totalization agreement - that's something I need to research. And thanks for the honesty about needing to report it. I definitely don't want to get hit with an overpayment notice years later.

I strongly advise against this approach. The SSA has information sharing agreements with many countries, and unreported foreign pensions are one of the things they actively look for in audits. When (not if) they discover it, you'll face substantial overpayment penalties, possible interest charges, and in extreme cases, fraud prosecution. The penalties far outweigh the temporary benefit.

That's helpful to know! Do you remember which form she has to submit annually? And roughly what percentage of her SS was reduced?

Thanks for the specifics. I'll check my earnings history against those thresholds. I appreciate everyone's help - sounds like I should probably go ahead and apply for the UK pension since I'll still come out ahead financially, even with the WEP reduction. I'll make sure to report it properly with that SSA-308 form.

Small amounts can still trigger WEP, but the WEP reduction can never be more than 50% of the non-covered pension amount. So if the pension is $100, the maximum WEP reduction would be $50. This might be small enough that your sister (or the SSA) hasn't noticed it in the monthly benefit calculation. But technically, it should still be reported.

Good point. Foreign pensions often require filing Form 1116 (Foreign Tax Credit) if you paid taxes on that pension to the foreign country, to avoid double taxation. It's definitely worth consulting with a tax professional who understands international tax issues before making your decision.

This is incredibly helpful, thank you! I had no idea about the potential back payments - that could be significant given I worked in the UK back in the 1990s. Do you know if there's a time limit on claiming those back payments? And when you mention online calculators for WEP estimates, do you have any specific ones you'd recommend? I want to run the numbers before I start the application process.

@Zara Shah This is exactly the kind of real-world experience I was hoping to hear! The back payments aspect is something I definitely need to look into - that could make a huge difference. A couple follow-up questions if you don t'mind: How long did the whole process take from application to receiving your first UK pension payment? And did you have to provide extensive documentation from your 1990s employment, or was the UK system able to verify your work history on their own? I m'a bit worried about tracking down old employment records from 30+ years ago.

@Zara Shah Thanks for sharing your experience! This is really encouraging to hear from someone who s'actually been through the process. I m'particularly interested in what you mentioned about the WEP reduction calculators - could you point me toward any specific ones that gave you accurate estimates? Also, regarding the currency fluctuations, did you find any strategies to minimize the impact of exchange rate changes, or do you just accept it as part of having international income? Your point about detailed record-keeping is well taken - I imagine dealing with two bureaucracies requires serious documentation!

This is exactly the step-by-step approach I needed! Thank you for breaking it down so clearly. Your point about the "horror stories" often involving people with limited SS work history makes total sense - I was getting spooked by some of the more dramatic accounts online. One question about the timeline: did you apply for your German pension first and then deal with the SSA reporting, or did you notify SSA before starting the foreign pension process? I'm wondering if there's an optimal sequence to handle this, especially since you mentioned I could decline the UK pension later if the math doesn't work out. Also, do you remember roughly how long it took SSA to process the Form SSA-308 and implement the WEP adjustment to your benefits? I really appreciate hearing from someone who's actually navigated this successfully!

@Miguel Herrera This breakdown is so helpful! I m'actually in a very similar position - worked in the UK in the early 2000s and just started thinking about this. Your point about the substantial earnings count is crucial. I ve'been trying to figure out if my sporadic freelance years would count toward that threshold or if only W-2 employment matters. Did you find the SSA website s'WEP calculator to be pretty accurate, or were there surprises when your actual reduction was implemented? I m'seeing conflicting information online about how precise those estimates are. Also, when you mention you "can always decline it later -" is there actually a way to stop receiving a foreign pension once you ve'started, or were you referring to not applying in the first place? Thanks for sharing your real-world experience - it s'so much more valuable than the generic advice I ve'been finding elsewhere!

@Miguel Herrera This is incredibly reassuring to hear from someone who s'been through the process! Your point about the horror stories often involving people with limited SS work history really puts things in perspective. I ve'been working steadily in the US since the late 1990s except (for those 6 years in London ,)so I should have well over 20 years of substantial earnings. Quick question about the Form SSA-308 timing - did you file it as soon as you applied for your German pension, or wait until you actually started receiving payments? I m'wondering if there s'any advantage to giving SSA advance notice vs. reporting it when the payments actually begin. Also, did you experience any delays or complications with SSA processing the form, or was it relatively straightforward? Your step-by-step approach gives me the confidence to move forward with this. I think I was letting the complexity intimidate me, but breaking it down like this makes it seem much more manageable. Thank you!