# Planning for retirement



## Carmonli (Jul 1, 2014)

I'm about to be made redundant at my current job, and while I will look for another position now, I've started thinking about the technicalities of retiring. I'm 62 and had hoped to work for another few years, at least. I'm in good health and started saving for my retirement only in my 30s.

I'll have 3 sources of income (not taking into account husband's side of things, who is not a US person for tax purposes):

- Social security (I did work 40 quarters before I left the US).
- My Israeli Bituach Leumi allotment (Israeli National Insurance old age payment).
- Private pension

My question is about the Windfall Elimination Provision (WEP). There was a legal decision last year that negated the effect of the WEP on Bituach Leumi payments. However, it seems that the WEP would be triggered by my private pension.

Are You Getting The Social Security You Deserve?

I guess my question is: how does this actually work? Is there any way to minimize the effect of the WEP? Does it matter which of the three sources I start drawing on first?


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## Bevdeforges (Nov 16, 2007)

My understanding is that the WEP kicks in only if you have a government pension from another source (including a stock standard national pension from a country with a mandatory government pension plan). But, you may want to take a look at the information from the source: https://www.ssa.gov/planners/retire/wep.html 

Don't forget, too, that when you apply for your US SS benefits, you can also get a benefit for your husband (usually roughly equal to half your US SS benefit). Chances are, your husband's US SS benefit will be withheld automatically at 30% (because he is not a US "taxpayer") - but depending on the amount of your US pension, it could wind up covering at least part of any WEP they take out.

(No, they don't make any of this stuff easy. <g>)
Cheers,
Bev


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## Carmonli (Jul 1, 2014)

Thanks, Bev.

About the SS payment for my husband - currently, I file "married, filing separately". He does not have any contact with the IRS and doesn't want to (for obvious reasons...) Would this SS payment raise red flags with the IRS?


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## Bevdeforges (Nov 16, 2007)

As far as I know, no. In fact, I'm in precisely the same situation and have figured that the amount my husband would receive (after the 30% withholding) should pretty much make up for the WEP they'll dock me for (due to the French national pension I'm due to receive).

Since you file married, filing separately, they just withhold 30% of whatever he is entitled to, and that's the end of it. He'll be under no obligation to file US taxes and as far as I know, they won't issue him an ITIN for it, either. That's the theory, anyhow. I'll let you know more next summer when I put in my application for my SS pension and see what he's entitled to. But he already gets a very small interest payment from the US, from which they withhold 30% and he has never filed anything. I figure the same model applies here.
Cheers,
Bev


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## Carmonli (Jul 1, 2014)

I'll be very interested to hear your real-life experience. Please do update us.


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## Carmonli (Jul 1, 2014)

*Carmonli*

Hi Bevdeforges,

Reviving this zombie thread...

I've just applied for SS benefits for myself. You had said you were going to be in a similar position - is it possible for you to update with your experience on this subject?

Thanks


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## Bevdeforges (Nov 16, 2007)

Had to go back to see what the initial question was. If we're talking about the NRA spouse claiming the spouse benefit, that's actually quite simple to arrange. HOWEVER, they will need to assign the NRA spouse a SSN (not an ITIN, an actual SSN) - and to do that, you and your NRA spouse have to make an appearance at the consulate. But the process isn't overly intrusive (at least my DH didn't object) and hey, it's free money.

Obviously, none of that is going to happen until the confinement is lifted and the consulate is taking appointments again.

Your NRA spouse will get a social security card - but one which is marked "Not valid for employment" Each year end, s/he will get a statement of how much the benefit was, how much tax was withheld (30% of 85% of the gross benefit). It's similar to the 1099-SS that a US citizen/taxpayer receives, but it's a somewhat simplified form with a different number. No US tax forms to fill out - and what and how you report (or not) the benefit on your local income tax forms depends on the tax treaty between the US and your country of residence.


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