# Crediting social security contributions to foreign pension



## Alltimegreat1 (Feb 25, 2015)

So, just one last question.... 

I've moved to Germany permanently and I'm wondering what will become of my US social security contributions. They're not enough to ever receive payments on retirement. Is there anyway to get my contributions credited to my German pension?


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## Bevdeforges (Nov 16, 2007)

Actually, the time you worked in the US will probably be credited to your German account when it is time to tally up your qualification. The amounts you contributed are kind of lost - other than in the record keeping.

But do check your US SS record on the US SS website: What You Can Do Online and select Estimate your future benefits or Get your social security statement to access what the SSA has on file for you. (Don't forget, they include those dodgy first jobs you may have held in high school.) 

I know the US SSA record has been a lifesaver for me, because of the larger number of years of service required in Europe to qualify for a pension. They do add the quarters from my US record in full (as quarters, not the amounts I paid in) so I have considerably more time counted than if they just relied on my French work record.
Cheers,
Bev


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## BBCWatcher (Dec 28, 2012)

Bev is understating things a bit. The U.S. and Germany have a social security treaty. Consequently if you contributed to the U.S. system within any two calendar years in some non-trivial amount, that should be enough to qualify you for some small future retirement benefit. (That's the absolute minimum to qualify when you've also worked and contributed in a treaty country. Of course the more you contributed, the higher your future benefit.) You'd ask the U.S. Social Security Administration, when the time comes, to count your contributions to Germany if need be to qualify you for U.S. benefits, and there you go. You can start collecting as early as age 62 and as late as age 70. The longer you wait (up to age 70), the higher your monthly retirement benefit. Your spouse likely would qualify for a spousal benefit.

You can also collect from Germany, though you need to tell each side about the other. Presumably if you've worked most of your life in Germany you'll qualify for German benefits without Germany needing to count your U.S. contributions.

U.S. Medicare is different. You need non-trivial contributions within any 10 calendar years to qualify for free Medicare Part A, so that's a bit more challenging.


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## FFMralph (Dec 22, 2012)

The benefits are not lost but may be reduced. 
The German treaty only covers the amount of time (montrhs) you paid into Social Security.
For instance, in Germany you must pay 35 years in order to get full benefits. The time you paid into Social >Security counts toward the 35 years but you do not get paid from the german retirement for this time. You must parallel apply for your Social Security retirement. Your retirement may be reduced based on your german retirement. The Social Security office in Frankfurt can tell you more about this. You also must apply with the germans that your Social Security time is carried over. They then contact the US and verify the time periods. You must due before retirement. There are several pamplets available at the consulate or with the germans about this.


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## Bevdeforges (Nov 16, 2007)

The key thing is that the fact of having paid into the US system isn't lost, though the amounts you contributed won't do anything for you in the German system, just the time.

But again, check the US Social Security site to see what they have for you, and to what extent you will or won't qualify for even a partial pension at retirement age. Medicare is not a big worry, since it does you no good outside the US anyhow. (OK, if you have the freebie Part A benefit, you're covered for serious accident or illness when you're back visiting the US - but just try and find a travel insurance that will factor that in for you when you're resident in Europe.)

And yes, those extra years may very well come in handy should you not be able to make the full requirement from your German work years alone. (It may also come in handy if you wind up on unemployment late in life, as unemployment benefits can sometimes be linked to your retirement eligibility when you're over 55 or 60.)
Cheers,
Bev


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## jbr439 (Nov 17, 2013)

Is it correct to say a social security treaty is something different from a tax treaty? I'm wondering what the situation is for Canada w.r.t. having paid some number of quarters into US SS?


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## BBCWatcher (Dec 28, 2012)

Yes, the social security treaty (also known as a "totalization agreement") is different.

Yes, the U.S. and Canada have a social security treaty. Although the U.S. calls them "quarters of coverage" (QCs), it's best to ignore the word "quarter" since it's quite misleading. Ordinarily to qualify for U.S. Medicare and U.S. Social Security retirement benefits you need at least 40 QCs. You can receive up to 4 QCs per calendar year. In 2015 you get one QC per $1220 in Social Security taxable earnings. (The amount is adjusted each year for inflation.) You can earn your QCs any time of the year. For example, if you work for one week in September and earn at least $4880 in that brief time, that goes into the record books as a full 4 QC year.

The social security treaty means that you can count contributions to treaty countries' systems, including Canada, to qualify for Social Security retirement benefits. (But not Medicare.) You only need as few as 8 QCs in the U.S. system when counting treaty country contributions. (You need the equivalent of at least 32 QCs in treaty country contributions, then.) For example, if you earned $4640 in U.S. Social Security taxable earnings in 2013 and another $4800 in 2014, plus you had 8+ years working and contributing in Canada (one of the treaty countries), that'd be enough to qualify for a small U.S. Social Security retirement benefit, plus a spousal benefit if applicable. In theory you could have worked as few as two days in U.S. employment (or self-employment) to get your 8 QCs and qualify, if you've also got treaty country contributions and as long as those two days were in two different calendar years (one day in one year, another day in another year).

You need at least 40 QCs in the U.S. system to qualify for free U.S. Medicare Part A. Contributions to other countries' systems don't help there. If you have fewer than 40 then you might qualify for a discount on Part A if you choose to buy it (and are eligible to buy it).


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## Alltimegreat1 (Feb 25, 2015)

I think I've built up around 30 or so quarters of social security. Since my job offer 8 weeks of paid vacation per year, I was considering working a week or two in the US to eventually get up to 40. I realize this might endanger my foreign-earned income exlusion, but what if I claimed the FTC? Is it allowed to live and work in American for part of the year and still claim the FTC?


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## FFMralph (Dec 22, 2012)

The FTC can only be claimed on *foreign* paid income taxes and can be claimed regardless of your domicile.


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## FFMralph (Dec 22, 2012)

30 or so quarters of social security is 7.5 years. Don't forget to get them registered with the germans. Here a useful site:

International Programs - Totalization Agreement with Germany


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## Alltimegreat1 (Feb 25, 2015)

Thanks for the link. Is there anything I should be doing about this now? I've got quite a few years until retirement age. Should I just sit back and wait until the time comes and then deal with it?


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## Bevdeforges (Nov 16, 2007)

Safest thing to do is to keep checking in on the US SS site to make sure your record is up to date. When you start getting closer to retirement age, the German retirement agency will start asking you for information about your working life elsewhere - usually "to fill in the gaps" in your pre-Germany life. Sometimes they just ask for authorization to obtain this information themselves from the US SS Admin - other times they ask you to get the information and give it to them.
Cheers,
Bev


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## BBCWatcher (Dec 28, 2012)

Yes, check your U.S. Social Security earnings history to determine precisely how many QCs you have. You'll have to do some year-by-year comparisons, comparing your recorded earnings for that particular year with the amount of earnings to get QCs. There's a historical table here. So, for example, if you earned $3,200 in 2007, that would count for 3 QCs because in 2007 you needed $1000 in earnings per QC. As another example, if you earned $8,053 in 2009 that would be 4 QCs -- the maximum you can get in any year.

If you have about 30 QCs yes, you're really close to the magic 40 to hit free Medicare Part A eligibility, and that's worth something at least as an "insurance option." Yes, you certainly could earn a bit of money in the U.S. to get some more QCs. A few interesting things happen when/if you do that:

1. You have some earned U.S. income, so you could qualify for refundable tax credits that require earned income, notably the Additional Child Tax Credit, _even while taking the Foreign Earned Income Exclusion_ if you qualify. (Though it may still be tax advantageous to skip the FEIE since you have German income tax rates.) Same with IRA contributions.

2. Or, if you accumulate excess FTCs from Germany (and you probably will), you can carry forward and use those excess FTCs to offset U.S. income tax that might be owed on U.S. earned income. Effectively working income tax free in the U.S. isn't a bad deal at all.

3. Other U.S. Social Security benefits eventually kick back in if you have some U.S. earned income, notably disability and survivors coverage. The threshold rule for activating disability coverage is a bit complicated, but to net it out if you can maintain a 2 (or more) QC pace every year, you can keep U.S. Social Security disability coverage going once you pass the initial threshold to reactivate that coverage.

So, you've got a pretty good idea there if you can pull it off. For example, in 2015 if you work 2 weeks full time (80 hours) in the U.S. you'd have to earn at least $15.25 per hour to get 1 QC (or $30.50 per hour for 2 QCs). U.S. minimum wage won't quite cut it if you only have 2 weeks. (The $15 minimum wage in SeaTac, Washington, works if you can clock at least 82 hours there.)

Self-employment in the U.S. works, though you don't have an employer paying half the payroll tax. Instead you pay the self-employment tax. Mathematically it amounts to the same thing.

As it happens I have a bit of U.S. earned income flow even though I live in Singapore (for some complicated reasons), so I get the benefit of #3 and am keeping my Social Security disability coverage intact, so far anyway. But I was already well past the 40 QC mark when I left the U.S. to work overseas, so I already passed the non-treaty Social Security retirement benefit threshold and the free Medicare Part A qualification threshold. (The additional U.S. Social Security earnings slightly boost the future retirement benefit.) There is some peace of mind in all that, even if I never use Medicare, just because it provides more and more realistic options in the future. Of course we'll collect the retirement benefit and spousal benefit when the time comes no matter where we live.

Though you won't trigger the new Minimum Essential Coverage (MEC) medical insurance requirement if you only spend a limited time in the U.S. per year, it's still a very foolish thing to spend any time in the U.S. (and many other places) without adequate medical insurance. So just make sure you've adequately covered that contingency.


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## FFMralph (Dec 22, 2012)

*Yes, it is important that you contact the BfA (see the link below) now. * Inform them that you wish to have your Social Security contribution periods (Beitragszeiten) transferred to your retirement account (Rentenkonto). They will ask you for your account number and will send you the forms. After they receive the completed forms, they will make contact with the Social Security office to verify the periods. After verification, the time periods will be added to your account and will be noted as Contribution Time Only (Pflichtbeitragszeit nur fuer den Anspruch). Unfortunately, the entries do not appear in your annual Retirement Information (Rentenauskunft). If you want to view the information, you have to make contact with the BfA and request a new Retirement Information with Foreign Contributions (Rentenauskunft mit Auslands Eingaben). Also you can have the time for higher education added to your account. You must provide proof of attendance. For instance transcripts. Transfering these contribution times will save you a lot of money when you do apply for retirement and can possibly open the way for you to retire earlier.

Deutsche Rentenversicherung - English


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## BBCWatcher (Dec 28, 2012)

FFMralph, why is it essential to do that *now* (in bold!) and not, say, closer to retirement age? Are there immediate benefits to adding that "Contribution Time Only" to the German social insurance record?


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## FFMralph (Dec 22, 2012)

BBCWatcher, it takes time for the Germans and Americans to process the information.

The contribution entries are used in determining the earliest possible dates for normal retirement (35 contribution years), disability retirement and the new retirement for persons with 45 contribution years. If your account isn't complete, you will loose approx. 10% for each missing year. I'm for getting your records straight before losing money due to missing documents.


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## BBCWatcher (Dec 28, 2012)

Well, OK, but Alltimegreat1 has some diapers to change, too. Believe me, those are higher priority.


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## Bevdeforges (Nov 16, 2007)

One other consideration here.... If you have 30 or so quarters of credit on your US SS record, you may not NEED to return to the US to work. Part of that SS totalization agreement involves the US counting some of your working time in Germany toward your US SS entitlement. You have to be within a certain number of quarters of 40 for that to kick in, but I would guess that 30 quarters would be enough.

Start here: https://faq.ssa.gov/ics/support/KBAnswer.asp?questionID=3820&hitOffset=5&docID=12612
Cheers,
Bev


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## BBCWatcher (Dec 28, 2012)

No problem there, Bev. According to the totalization agreement the U.S. side pays some level of retirement benefits with as few as 6 U.S. QCs, plus enough German contributions of course. (I think all the agreements are like that. I've never seen anything else, anyway.) To get to 6 QCs you need non-trivial contributions to the U.S. system within any two calendar years. Alltimegreat1's approximately 30 QCs, plus German contributions, should already be more than enough to get something from the U.S. side (and maybe also from the German side, though they're more demanding). Hitting the magic 40 QCs would be even better (for free Medicare Part A plus a higher retirement benefit).


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## Bevdeforges (Nov 16, 2007)

Having had some dealings already with the German retirement Kasse, I think it's safe to say that Alltimegreat1's pretty safe in assuming some benefit from the German system. IIRC, it's possible to get credits in the system while on maternity leave.

The Medicare Part A isn't really worth worrying about if you're intending on staying in Germany. Only really worthwhile when visiting back in the States after the age of 65. 
Cheers,
Bev


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## FFMralph (Dec 22, 2012)

No retirement payments are withheld from your german maternity leave pay. However, starting last year, all mothers (new and old) are automatically credited with one year, or one point for each child. This means that you increase your monthly retirement pay by about 26 Euros/child.


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## BBCWatcher (Dec 28, 2012)

Bevdeforges said:


> The Medicare Part A isn't really worth worrying about if you're intending on staying in Germany.


I wouldn't phrase it that way. I think I fairly characterized the significance of qualifying for free Medicare Part A coverage, but I'll elaborate.

We all _intend_ many things. But none of us cannot predict the future.

Now, that said, there's probably not much option/contingent value in qualifying for free medical care in, say, Paraguay unless you live in Paraguay, intend to move to Paraguay, are a citizen of Paraguay, have a family member who is a citizen of Paraguay, or otherwise have some tie to Paraguay....

....Turn to Alltimegreat1. It's very reasonable indeed to "worry about" qualifying for free medical care _in one of your countries of citizenship_ (or in your only country of citizenship). There really is substantial option/contingent value in that qualification. It's worth worrying about, to some degree. If Germany goes pear shaped -- hey, it did a couple times in the 20th century, and how! -- then there's a "Plan B." And vice versa. Have more and more realistic options is great!

Back in the pre-jet steamship days a _gigantic_ percentage of immigrants to the United States returned to their home countries -- something like 50%, ballpark. Now, with jet air travel, it's even more realistic than ever. So yeah, this stuff matters. It has value, at least as an option. It's worth thinking about, better than "worrying" about. If Alltimegreat1 can tick that Medicare box, fantastic, bravo -- we should applaud that.


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## Bevdeforges (Nov 16, 2007)

And if the US goes pear-shaped, at least you have the German health care system! Based on current events, I'm betting that's at least as likely....
Cheers,
Bev


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## BBCWatcher (Dec 28, 2012)

Yes, that would be the "And vice versa" part I wrote....

....But those would be long(er) odds. The U.S. economy is one of the very few bright spots right now, in particular, but if you look across the board at measures of well being (and I do) practically all of them are better than ever. (One of the few exceptions: the U.S. suicide rate is slightly elevated above trend last time I checked, and I'd certainly like to see that go down.) I'm a bit surprised how well the U.S. is doing, actually. The most recent, true "pear shaped" episode in the United States was 1861 to 1865 (its Civil War, and it was a whopper), but that was a very long time ago.

Probably the biggest risk in Europe right now is the abject failure of policymakers to respond aggressively and correctly to the widespread, persistent economic depression and mass unemployment. Not only is it a human catastrophe, it's extremely dangerous. Russia is also a concern.

There are always the low, weird risks. The Yellowstone Caldera could blow its top, in which case our planet goes pear shaped. But more likely in our lifetimes a volcano in Iceland could let loose, and that could really mess up most of Europe. (The planet would muddle through.)

Anyway, I like having options.


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## Bevdeforges (Nov 16, 2007)

Actually, there is one other option to consider: should our OP decide to take German nationality in the future, she will have to relinquish her US nationality. I think there may be a way to do this without paying the huge fee to the Consulate if the case can be made that you must relinquish in order to take the nationality of your spouse (as is the case in Germany). 

I know of folks who have done this - but I won't go into the circumstances that led them to choose this option.
Cheers,
Bev


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## BBCWatcher (Dec 28, 2012)

There's a provision in German nationality law that allows one to skip making an attempt to renounce one's existing citizenship if it would be too expensive. Does $2350 qualify as too expensive? Presumably the answer would depend on one's income, but at least at certain income levels yes, that would be too expensive.

I'm familiar with a situation in which someone acquired Norwegian citizenship with the same requirement. That normal renunciation requirement was waived precisely because the renunciation fee to income ratio was deemed too high. The particular fee in question was much lower than $2350.

By the way, I don't recommend that couples jeopardize any of their existing citizenships while they could affect their current or future children's citizenships, again consistent with the principle of protecting all possible future options for them. Let the children have all the citizenships the parents bring to the party, and let them decide when they reach adulthood what they'd like to do. I cannot predict whether my child will be a Broadway star or a Eurovision Song Contest winner. (Hopefully both!) And my politics surely won't be my child's, at least not exactly -- and the world will surely be different ~20 years from now anyway. Then, well after the parents' childbearing years (and past other options like surrogacy and adoption), if it makes sense for either spouse to acquire another citizenship, sure, no problem.

That's _particularly_ true in the European Union (and EEA) where non-citizen spouses have a right to stay after one year of continuous residence if their spouse should predecease them, and also with the availability of EC Long Term Residence permits in most EU/EEA countries. The non-citizen spouse can nail down the most important rights pretty quickly and also preserve a viable path to citizenship. Situations in other countries may be different and less stable.


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