My questions might need some background that I’ll provide here. Both my wife and I spent our childhood and early adulthood as US citizens in the US. We both graduated from the same university and worked both part time and full time through our teens and early twenties. I spent six years part time as a US Army enlisted man as a reserve. In 1971 we migrated to Australia and commenced working lives which concluded when I retired in June, 2009 and my wife retired in January this year. Somewhere in the early eighties we both relinquished our US citizenship and became Aussie citizens.
Upon my wife’s retirement we enquired with Australian Centrelink (who administer Australian social benefits) to see if we could access an Australian Age Pension. At that time Centrelink informed us that we might qualify for the US Social Securirty. They put us in contact with the US SS Department in Manilla.
We each then had a couple of 'phone interviews with the Manilla people and we filled out some forms verifying our working lives here in Aus, our work history in the US and many other facets of our lives in both the US and Aus.
Bottom line is that we both qualify for a Social Security pension from the US. Apparently there is an agreement between the US and several other countries that work time spent in the workforce of those countries counts as ‘credit’ toward SS benefits from the other country. Neither one of us had enough US work history credits to qualify on that alone but forty years in the Aus work force was enough to qualify.
That brings me to my questions.
In no communication with Manilla did our assets come up. Is the SS Pension in any way means/assets tested?
Is there any on-line resource that explains how the US SS calculate the size of the monthly payment?
What’s a normal monthly payment for the US SS? Even a rough range would help.
Is the philosophy of the SS Department that the SS payment is only supplemental to other post retirement income? Is everyone expected to self-fund their retirement?
US Social Security is not asset tested; it depends on your work history and how much you earn.
Certainly. Here’s their nifty Benefits Estimator. You’ll need your American Social Security number in order for them to look up your records. I don’t know if it has support for counting foreign work credits.
It varies considerably. The maximum benefit for a retiree today is around $2300 per month.
Generally, yes. Nobody is expected to be comfortable living on SS alone.
The answers given are all correct, the only tricky issue is that for you the amount of the monthly payment will require a complex calculation, because it will take into account the credits earned both in the U.S. and Australia, as well as the Australian social benefits.
I just used the benefits calculator to check my benefits and was given three figures, one each for if I stop working at age 62, 66 and 8 months, and 70. What I’m not clear on is if I start the benefits at age 62, is it that amount for the rest of my life? Or do I get bumped up to the next figure upon reaching age 66 years and 8 months and then another bump at age 70?
The age at which you start receiving benefits will permanently place you in a certain “class” (my term). Benefits will likely increase uniformly for all classes over time, but you will never move up to another class.
To clarify, no, once you start receiving benefits, you don’t get bumped up at any future age you reach. The only change will be inflation-induced adjustments.
Note that if you continue to earn, your benefit amount can be recalculated – I think you have to initiate that, it’s not automatic.
Here’s a lecture given recently by Brian Kloos, a SS rep from Green Bay. Depending on how your browser works, you might have to download the entire file before viewing it (or not, mine starts right away). It’s an hour-long (150MB) file with a wealth of info:
Thanks for the information and the links. The one piece of information that is unclear is the range of monthly payments. I can live without the information.
I’ve recently seen a seemingly authoritative source that said that under current law, you could start taking benefits at 62, then, upon repayment of some of those benefits at age 65, jump to the 65 “class” and do the same thing at 67. This is clearly a “heads I win, tails you lose” proposition for the recipient so nearly everyone should do this, except for the fact that Congress could close this loophole at any time leaving recipients stuck in their current class, which might not provide them their maximum benefits.
That sounds doubtful, but it should be something you could check on with the SS office.
I do know there are some accounting juggling can legally be done – and the SS office shouldn’t balk at telling you how to do it – if you have a spouse of a different age and some other factors. You do have some choices. The video I linked to explains a few of these.
One more thing I forgot to mention…Up to your full retirement age, if you earn more and a certain amount, your benefits will be reduced. This deduction ceases at full retirement age (the actual age that applies to you is dependent on your birthdate, or “class”).
I can answer part of the question. The story for my wife and me is similar. We left the US when I was 31 and she was 30. Largely because we worked for organizations that had opted out of SS (me at the University of Illinois and she partly that and partly teaching school in NJ and CN) I ended up with 34 quarters and she with only 7. When I retired at age 63, I applied for Quebec Pension and someone at the QPP office told me that I might be eligible for some SS. A QPP functionary took care of it all, filling out the application and sent it off to a SS office. It came back approved and I starting getting around $180/month. Not enormous, but better than nothing. It would have been closer to $200 had I been 65. When my wife turned 65 and applied for Quebec Pension, she got the same advice and same treatment. However, her 7 quarters were worth less than 50% of my SS payment and so she got the latter, about $100/month (since she was 65). The are small COLAs and we now get something like $330/month between us. Canada taxes 85% of this (per treaty). They tax all pensions since the pension payments were all deductions from income. Most importantly, these payments do not reduce the QPP payments. I feel I am double dipping since had I had all my working years in Canada, I would get the same QPP payment and nothing from SS. On the other hand, had I been at Indiana University, which has not opted out, I would have well over 40 quarters and been fully covered by SS and getting a full pension.