Cross posted from ExpatAmi
On 04/03/2012, the Social Security Administration wrote that when I retire at the age of 67, I’ll get a mighty monthly Social Security benefit of $495, partially in exchange for the time spent serving loyally in the United States military. If I was 67 today, then this benefit would enable me to afford to rent the cheapest one bedroom apartment in San Francisco for only $370 per month, according to WalkScore, and have $125 left over for food, drinks, electricity, health care, transportation, taxes, clothing, etc.
This would be the case if there was no expat penalty, also known as the “Windfall Elimination Provision“ (WEP). On WEP, the Social Security Administration writes:
If you work for an employer who does not withhold Social Security taxes from your salary, such as a government agency or an employer in another country, the pension you get based on that work may reduce your Social Security benefits… The Windfall Elimination Provision primarily affects you if you earned a pension in any job where you did not pay Social Security taxes and you also worked in other jobs long enough to qualify for a Social Security retirement or disability benefit.