Hello Larry,

I am 62.6. I have 40 work credits. I currently reside in the UK. American.
I am p/t self-employed in the UK.
I do not need to pay SET to SS going forward as I pay it in the UK on my SE income.
My NRA spouse is FRA (67.6) and is entitled to the spousal benefit which is 50% of my PIA.
I may or may not be be subject to the FWT (as above).
I will be entitled to a non-covered pension (UK state) at 66 (May 2025)
I will be subject to WEP when I begin to collect the non-covered state pension.
I do not have 30 years of substantial earnings nor anywhere near this so I cannot eliminate the WEP. I believe I would be 40-50% wepped.
I have been working with SocialSecurityAdvisors.com who may be using your software or something very similar (at least my reports look very similar)
The suggested SS strategy is to file a standard application now with a reduced benefit while under FRA. This is because notwithstanding a reduced benefit amount under FRA and coupled with my FRA spouse who will receive 50% of my PIA, the projection shows that I will be over $12,000 better off over the entire actuarial (85 years each). because it would not WEPPED until I reached UK FRA at 66.. The culmination of the reduced, non-wepped benefit + spouse benefit from 62.7 to 66 will outstrip waiting for the higher benefit amount at FRA (or 70) with the WEP penalty from the get go.

The other strategy I did not 'what if' was delaying SS benefits till FRA and also delaying my UK state pension until 70. (the UK pension would build up from 66-70 at 6% per year + CPI).
I am not sure if this strategy would put me ahead of being $12,000 better off or not, but it would eliminate any issue with the FWT until FRA and allow me the re-crediting of the withholds if that turned out to be the case, as well as avoiding having the IRS tax my benefits at 85% until FRA.

My questions:

1) If I started to claim now as has been suggested, and I find I am subject to withhold of benefits via the FTW for the next 2 or so years can you confirm that those amounts withheld would be recredited at FRA.

2) When they do get re-credited, which I believe is the case, would your software product be able to calculate this scenario taking into account a potential start of the WEP at 66 years or later if I delayed (UK FRA) with the non-covered pension?

I am considering purchasing your software to run my own numbers because the advisors I used did not take into account the FWT so I may be back to square one and am not that happy!

Thanks.

Hi. Yes, if you apply to start drawing Social Security retirement benefits prior to your full retirement age (FRA) and if at least some of your benefits prior to FRA are withheld due to the foreign work test (FWT), then your benefit rate will be adjusted effective with the month you reach FRA to remove the reduction for age that was applied for any months that you don't end up being paid. Those types of benefit adjustments (i.e. automated reduction factor (ARF) adjustments) are processed automatically, but they don't occur immediately upon a person's reaching FRA. But, when the ARFs are processed the adjusted benefit rate is retroactive to the person's month of FRA attainment, and any back pay to which the person is entitled is paid to them in a lump sum.

Just to clarify, though, benefits withheld due to the earnings test or FWT are not returned to the beneficiary. Instead, the person's benefit rate is adjusted as explained above to remove part or all of the reduction for age that was originally applied to their benefit rate.

And, yes, our software (https://maximizemysocialsecurity.com/purchase) is fully programmed to calculate ARFs and WEP recalculations. It sounds like you should strongly consider using our software (https://maximizemysocialsecurity.com/purchase) to fully compare and analyze all of your options in order to determine your best strategy for maximizing your benefits.

Best, Jerry