# When to claim SS



## Clarepreston (Oct 9, 2016)

Hi, 
I am a dual US/UK citizen resident in the UK. I can’t decide whether to start claiming SS at 63 (nearly there) or wait until I can clam the full amount at 66years 6 months. I’ve done the math to the best of my capability, including WEP estimate that starts from 66 when I get my UK State Pension. I’ve calculated up until age 80 that I’ll get $1000 or so more by waiting to claim the full SS. However, I’m not working and will need to withdraw from my IRA to support myself for the next 4 years.
I’m thinking that SS is probably a safer bet than the financial market given the unsettled times we are living, and am leaning towards waiting until I’m 66.5 to claim. 
I wonder what others on this forum have done, or if anyone has any strong thoughts. My husband thinks I should claim earlier, but I’m leaning towards later.
Many thanks in advance.


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## Bevdeforges (Nov 16, 2007)

It all kind of comes down to what your "goal" is when claiming SS. Have seen any number of analyses in the US about "maximizing the total amount you receive" over the rest of your life. The only problem with that is that none of us knows when we're going to die and unfortunately that figure is a big part of the calculation.

Seriously, though, you should start drawing your US SS when you need the income. You mention your IRA - and that also has to be figured into the calculation. How much over and above your SS benefit will you need - both in the next 4 years and then after that? As long as you're over age 59 1/2 there is no penalty for taking withdrawals (i.e. "distributions") from your IRA. Some folks I know draw down their IRA while they're waiting to reach the age where they'll get the "full" SS benefit - or even until they hit age 70, when they must start drawing SS at a somewhat enhanced benefit.

The key unknown is going to be the exchange rates (assuming you'll be remaining in the UK). But I also hear that only the UK taxes your US SS benefits (which may or may not apply to your IRA distributions, too).

Personally, I waited to my "full" retirement age - at the time 66 years - simply because I didn't really need the income, in part because my (partial) pensions from France and Germany kicked in several months earlier and so I supplemented those partial pensions with IRA distributions until I started getting my US SS (and set up my French husband to receive his spouse's benefit from US SS).

But the tax situation here is different - US pensions are taxed by the US, so that has to be arranged (by either quarterly estimated payments or withholding from either the IRA or US SS). Your US tax situation (and your preferences regarding your level of compliance) may also come into play.


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## 255 (Sep 8, 2018)

Clarepreaston -- Bev has given you some good information to consider. Just a couple of additional points: first every claiment has a slightly different situation and needs to make decisions based on that situation. Second, please consider your husband's situation in your calculations. You didn't give any specific information for your husband, but assuming he is only a UK citizen and hasn't worked in the US enough to qualify for U.S. Social Security on his own, you'll need to wait until your full retirement age (FRA) (66.5 for you) in order for him to draw a full spousal benefit (generaly half of your benefit.) Bottom line, you should consider your social security drawing plan as a couple, if you are married, not individually. In your case, besides your retirement benefit, you have both spousal benefits and survivors benefits to consider. You might consider utilizing an "expert" software to help in your quandry. I've used https://maximizemysocialsecurity.com/ in the past, but there are others, including some free ones that are less robust. You asked what we're doing -- I am a little older than you, but plan to wait until age 70 to draw. Our specific reason to wait is to maximize the survivor's benefit my wife will be able to claim. She will probably start drawing at her FRA, which she needs to do, to qualify to draw both the maximum spousal benefit and the maximum survivor's benefit. As far as social securities' "return," it's about 8% per year increase in benefit for every year you wait, up until age 70. Cheers, 255

P.S. You might consider the various "tax treaties," in your decision making process -- as Bev alluded to, the U.S.-France Tax Treaties are very favorable for U.S. retirees.


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## Clarepreston (Oct 9, 2016)

Thank you. I hadn’t actually thought that my UK (never lived or worked n the US) spouse would have any benefit. That does change things quite a bit, and makes the decision to hold off easy. I’ll look into the resources you’ve mentioned. Thanks to Bev also, for always replying and being helpful.


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## Bevdeforges (Nov 16, 2007)

Clarepreston said:


> Thank you. I hadn’t actually thought that my UK (never lived or worked n the US) spouse would have any benefit. That does change things quite a bit, and makes the decision to hold off easy. I’ll look into the resources you’ve mentioned. Thanks to Bev also, for always replying and being helpful.


One other thing with the spouse benefit. The gross amount is 50% of your benefit - but if you file as "married filing separately" (i.e. to avoid having to declare all of hubby's worldwide income in order to file jointly), his benefit will have non-resident taxes withheld automatically, which means 30% of 85% of the benefit. (Not sure if that is affected at all by the US-UK treaty.) Means that what he'll get amounts to around 35 to 40% of your benefit - but hey, it's free money, even if it's only a couple hundred $$ a month.


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## 255 (Sep 8, 2018)

Clarepreston -- An additional point for your situation. Your spouse will also have to wait until his FRA to qualify for his full spousal benefit, based on your earnings. Also, to Bev's point on taxes -- I recommend you calculate your taxes both ways, married filing separately (eliminating reporting of your husbands assets and income) and married filing jointly. You may find that if you filed separately during your earnings years, it may be more advantageous to file jointly in retirement as your husband's retirement income may be exempt in the U.S. under treaty provisions. I used to calculate both ways routinely (I don't any longer, because my situation is stable.) Some years married filing separately was more advantageous, but most years married filing jointly worked out best for us. Any way it's just a paper drill (or maybe a computer drill with tax accounting software) to determine what's best for your family. Cheers, 255


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## Bevdeforges (Nov 16, 2007)

Just another note on the choice between married filing separately vs. joint filing. It isn't always "just" a matter of which option yields the lowest overall taxes.

There is always the matter of having to obtain an ITIN for your NRA spouse and now I guess you have to renew those every 3 years or so.

Plus, if you read the tax treaty carefully, you'll see that in many cases you may still be expected to report all foreign pensions and then use the Foreign Tax Credit in order to avoid double taxation. Then, you're into the game of figuring which tax rate is lower on the pensions. 

Some folks overseas choose to file as MFS largely for the simplicity of what needs to be reported and a greater degree of flexibility in how you report certain foreign source incomes and which incomes you report at all.


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## Clarepreston (Oct 9, 2016)

Great information. 
I don’t think I’d want to get into joint filing as my UK husband does not want the IRS knowing his business, we keep our finances separate, and I’ve filed MFS for the last 7 years. It will be simpler this year as I was self employed but now am retired, and am used to claiming Foreign Tax Credit.
Thanks again


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