Whether or not you draw social security benefits has no effect on the Foreign Earned Income Exclusion. Ss benefits are not earned income and are not eligible for the exclusion. You have to be earning something outside the US, for work outside the US, to be able to exclude anything.

Ah yes, this is the root of the issue. I completely understand the definition of earned vs pension income. The FEIE allows me to exclude the majority of my U.S. earned income...the amount of which has a great deal to do with how much I am penalized when accepting SS benefits. Is that earned income amount affecting the SS calculation determined before or after the FEIE is applied?

The FEIE does not affect the ss benefit calculation. However, as mentioned in a couple of prior posts, the earnings limit is applied differently for foreign earnings. Generally, if you work abroad for more than 40 hours a month, you cannot draw ss benefits. If your benefits limits are applied under the regular rules, it is the earnings before the FEIE.

The FEIE is strictly a device for calculating the tax liability for a given income. It has no other purpose and is not related in any way to social security benefits or taxes.

Whether or not you draw social security benefits has no effect on the Foreign Earned Income Exclusion. Ss benefits are not earned income and are not eligible for the exclusion. You have to be earning something outside the US, for work outside the US, to be able to exclude anything.

Ah yes, this is the root of the issue. I completely understand the definition of earned vs pension income. The FEIE allows me to exclude the majority of my U.S. earned income...the amount of which has a great deal to do with how much I am penalized when accepting SS benefits. Is that earned income amount affecting the SS calculation determined before or after the FEIE is applied?

The FEIE does not affect the ss benefit calculation. However, as mentioned in a couple of prior posts, the earnings limit is applied differently for foreign earnings. Generally, if you work abroad for more than 40 hours a month, you cannot draw ss benefits. If your benefits limits are applied under the regular rules, it is the earnings before the FEIE.

The FEIE is strictly a device for calculating the tax liability for a given income. It has no other purpose and is not related in any way to social security benefits or taxes.

Thanks very much for helping me wade through this issue...I didn't realize the impact on SS by foreign earned income. Looks like I'll need to wait until I retire for good before initiating my benefits. I realize my eventual payments will be higher as a result of deferring my decision, but actuarially it will be a gamble to see if I live long enough to get a bigger cumulative payout.

Thanks very much for helping me wade through this issue...I didn't realize the impact on SS by foreign earned income. Looks like I'll need to wait until I retire for good before initiating my benefits. I realize my eventual payments will be higher as a result of deferring my decision, but actuarially it will be a gamble to see if I live long enough to get a bigger cumulative payout.

That's the Return on Investment manner of looking at SS benefits. In my opinion, the better way to look at it is as insurance in the form of an annuity. From this point of view you get an immediate benefit by delaying SS to maximize the eventual payout and the benefit does not depend on your surviving for any particular period of time. By delaying and maximizing SS you protect yourself, at least to a greater degree, against the risk of outliving your assets. That would lead to the worst outcome: being old and poor. The result of increasing your protection against running out of assets is that you can spend more of your assets to live right now. Your need to save for late old age is reduced, freeing up money for current consumption.