US Social Security benefits for Europeans: how to estimate your pension and how totalization agreements add up two careers

Every European who works in the United States pays Social Security tax, and many wonder whether they will ever see the money again. Usually they will. Forty quarters of coverage, roughly ten years of work, earn a US retirement benefit for life, payable to many countries abroad. Shorter careers can still qualify through the social security agreements the US has signed with most of Western Europe. Since January 2025 a rule that used to cut US benefits for people with other pensions has been repealed.

The key figures for 2026 and 2027

The Social Security Administration publishes its annual parameters in the Federal Register. The notice for 2027 appeared on 26 October 2026:

The tax that funds the system is 6.2% of wages for the employee and 6.2% for the employer, up to the maximum above, plus Medicare tax. Self-employed people pay both halves, 12.4% for Social Security, through self-employment tax. If you run a US company and pay yourself a salary, our pages on US payroll explain how these taxes are withheld.

Credits: how you qualify

Your entitlement rests on quarters of coverage, often called credits. In 2026 you earn one credit for each $1,890 of covered earnings, in 2027 for each $1,970, up to four credits a year. It does not matter when in the year you earn the money: a consultant with $7,880 of net self-employment earnings in 2027 earns four credits, even if all of it came in January.

For a retirement benefit you must be fully insured. Under the Social Security Act, 40 quarters of coverage always suffice, and nobody is fully insured with fewer than six. For anyone born after 1928 the formula comes to 40 credits, which is why Americans speak of "ten years of work". Credits stay on your record permanently; you can earn some in your twenties, leave, and earn the rest years later.

Retirement benefits can start at age 62, with a permanent reduction. Full retirement age, at which you receive your full benefit, is 67 for anyone born in 1960 or later. Waiting beyond it increases the benefit through delayed retirement credits, which stop accruing at 70.

Estimating your benefit, with a worked example

The benefit is computed in two steps.

1. Average indexed monthly earnings (AIME). SSA indexes your past earnings to wage growth and averages them over your benefit computation years, which for retirement are your elapsed years reduced by five, 35 years for most people. Years with no US earnings count as zero, so ten good years in the US are divided by 35, a point many Europeans overlook.
2. Primary insurance amount (PIA). For people first eligible in 2027, the PIA is 90% of the first $1,340 of AIME, plus 32% of AIME between $1,340 and $8,077, plus 15% above $8,077. The PIA is what you receive at full retirement age, increased by cost-of-living adjustments from age 62 onward.

Example

Anna, from Dublin, worked twelve years in Austin. Her indexed US earnings total $1,000,000. She turns 62 in 2027.

• AIME: $1,000,000 divided by 420 months (35 years) = about $2,380.
• PIA: 90% of $1,340 = $1,206.00, plus 32% of ($2,380 minus $1,340) = $332.80, total $1,538.80 a month at full retirement age, before later cost-of-living increases.

Because the formula is weighted toward the first dollars, a short US career produces a benefit well above its share of a full career. Your own record is what counts: once you have a Social Security number, SSA's online account shows your posted earnings and personal estimates. Check it every year, because an error in your earnings record is far easier to fix early.

This example is simplified. Real computations involve the year-by-year index factors, and benefits claimed before full retirement age are reduced.

Totalization: when you have fewer than 40 US credits

The US has social security agreements, also called totalization agreements, with most European countries. SSA's operations manual lists these agreements in force with European countries:

The agreements do two things. First, they prevent double contributions: the agreements assign a worker's coverage to one country's system, not both. A worker posted temporarily from Europe to the US typically stays in the home system, proven by a certificate of coverage. Our guide to taxes on employee assignments covers the posting side.

Second, they add up careers. If you are not insured on your US record alone, SSA may count your credits from the agreement country to meet the requirement, provided you have at least six US quarters of coverage. The resulting US benefit is a pro rata amount reflecting only your US share. Credits are not transferred: each country keeps its own record and pays its own benefit under its own law, so you can receive two separate pensions. The details, including how the European side counts US periods, differ from agreement to agreement.

The end of the windfall elimination provision

Until recently, many Europeans with a home-country pension saw their US benefit reduced. The windfall elimination provision lowered the US benefit formula for people who also received a pension based on work not covered by US Social Security; a related government pension offset cut spousal and survivor benefits for people with certain public pensions.

The Social Security Fairness Act, Public Law 118-273, approved on 5 January 2025, repealed both. The repeal applies to monthly benefits payable for months after December 2023, and the Act directed SSA to recompute benefits accordingly. If you have a pension from work that did not pay into US Social Security and planned your retirement around a WEP reduction, or decided not to claim a small US benefit because of it, the numbers have changed in your favour and deserve a fresh look.

Receiving benefits outside the United States

US citizens can generally receive benefits abroad. For non-citizens, the Social Security Act contains an alien nonpayment rule: benefits stop after you have been outside the US for six consecutive calendar months, and only resume after a full calendar month back in the US. There are important exceptions:

• citizens of countries that SSA finds have a general social insurance or pension system that pays benefits to US citizens abroad without limit;
• cases where a treaty obligation of the US prevents the suspension;
• beneficiaries covered by the alien nonpayment exceptions in the totalization agreements.

Whether an exception covers you depends on your citizenship and the country where you live, and the rules for dependents and survivors are stricter and can include a US residence requirement. Check your situation with SSA before you retire abroad, especially if you are a citizen of a country without an agreement. If you plan to move back to Europe before retiring, keep your US earnings record and bank details up to date.

How the benefits are taxed

A resident of another European country with a treaty that does not exempt Social Security may still face the 25.5% US withholding and a tax claim at home; the treaty decides whether credit is given. In the other direction, under the treaties with Canada and Germany, social security benefits those countries pay to US residents are treated for US tax purposes as if they were US Social Security. Our guide to tax treaty positions on the US return explains how to claim treaty benefits.

A checklist for European workers

1. Get a Social Security number as soon as your visa allows work, and check that every year's earnings are posted to it.
2. Count your credits. Forty make you fully insured; with at least six and a career in an agreement country, totalization can fill the gap.
3. If you are posted from Europe, ask your home institution for a certificate of coverage before the assignment starts.
4. If you are self-employed through a US company, remember that only wages or self-employment income create credits; distributions from a corporation do not.
5. Before retiring, model both pensions, the timing between 62 and 70, the effect of the WEP repeal, and the tax in the country where you will live.

Social Security is one pillar. For the rest of your savings plan, see our guide to investing as a new US resident, and for the question of what happens to European pensions when you move, our guide to tax planning for your move.

What the 3.6% increase is worth in euros, pounds and francs

The cost-of-living increase follows US prices only. Section 215(i) of the Social Security Act ties it to the Consumer Price Index, as prepared by the Department of Labor, for the calendar quarter ending on 30 September. The urban wage earner index (CPI-W) of the Bureau of Labor Statistics averaged 317.265 in July to September 2025 and 328.746 in July to September 2026, a rise of 3.6%, the same as the increase from January 2027. Exchange rates are not part of the formula: the increase is a dollar amount, wherever you live.

For a retiree in Europe, the currency can matter as much as the increase. Take a benefit of $1,500 a month before the increase, which becomes $1,554 from January 2027, and convert both at the average of the Federal Reserve's daily H.10 exchange rates for the same third quarter used for the increase:

Between those two quarters the dollar gained about 1.6% against the euro and the Swiss franc, so a retiree in the euro area or Switzerland received more than the 3.6%; against the pound it barely moved; against the Mexican peso it lost about 7.3%, which turned the increase into a cut. The same benefit can move several percent in either direction within a year, so a retirement budget abroad works best in the local currency, with the US benefit converted at a cautious rate rather than at last month's.