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Old 03-14-2019, 06:44 AM   #21
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Originally Posted by steelyman View Post

Depending on what other income sources are available it can be a meaningful reduction for retirees.
For sure. For us, GPO was the real killer. GPO punishes the spouse more than the state pension recipient his/herself. When we discovered that DW would not be eligible to collect anything from my SS as a survivor, it forced me to:

1. Start my SS at 62 and invest the money so she would at least have that if I predecease her. (That's worked OK.)

2. Reduce our current SWR a bit to compensate for the fact that my death results in my SS completely disappearing from her income as a survivor.

If she was a widow that had never worked at all, she'd be entitled to SS survivor benefits. It's kinda strange. I just made the necessary adjustments and everything has been OK. But it does seem like GPO really gives the SS earning spouse a kita since he/she loses the benefit of having SS be a partial provider for his/her surviving spouse through survivor benefits and other accommodations must be made.

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Old 03-14-2019, 09:05 AM   #22
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I found this article that explains the "why" of WEP and GPO.

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Old 03-14-2019, 09:29 AM   #23
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Originally Posted by MichaelB View Post
After brushing up about WEP over the weekend, I sat down yesterday with DW’s friend to look at her case. We spent a couple of hours talking about WEP, reviewing all the letters SSA sent on this, then looking over her work records. We also crunched some numbers, just to see if the amount being withheld for WEP was correct.

My conclusion was the WEP withholding was about what it should be. She was confused, which is understandable given that SSA changed the amounts 4 times, did a poor job of communicating the changes, and never gave her a simple & straightforward summary of the numbers. This led her to believe more was being withheld.

I think the other issue is, she learned about WEP for the first time when the SSA reduced her pension, which was a shock. She’s fortunate in that she has only a few WEP years, so the penalty is low and her retirement is not at risk. It does affect her lifestyle, thought, and she is back working part time.

This has been an eye opener for me. Like I said in the OP, I’ve seen this mentioned in many posts but just glanced over, never giving it a second thought. This could do serious damage to someone’s retirement plan, and even more if spousal benefits are needed.

Thanks for the links and posts, they were helpful.
I just filed for SS, knowing that with 21 years of substantial earnings, I’m still going to be affected by WEP; fortunately that WEP decrease will be offset for a few years. My husband will file a restricted application on my record later this year at his FRA.

I have a few friends, teachers and a librarian, who were also shocked to learn how WEP will affect their SS. One was getting ready to quit her part-time job and file for SS when I asked her whether she’d be impacted by WEP. (She worked in Illinois.) She’d never heard of WEP.

I did some research and suggested she might want to check out WEP before giving notice.

Two years later, she’s still working, as is my 70-year-old teacher friend.
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Old 03-14-2019, 09:58 AM   #24
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WEP is all about fairness. WEP simply makes sure that people who worked and earned a descent income but did not pay into SS get the same percentage return as those who did pay into SS. Otherwise the non-payers would come out far ahead since they would be treated as low-income earners, who get a higher percentage return in their payment. That would not be very fair to the rest of us who earned similar amounts of money, paid into SS, but get the lower percentage return of higher income people. Nobody is getting ripped-off.

Here is a good explanation:

And that has always been one of the basic tenets of the Social Security program: to raise the standard of living of lower-income workers in retirement. That is accomplished via a benefit formula structured to give poor people a better deal than their wealthier counterparts.
But if you are someone who spent your lifetime as a teacher or a police officer, or a federal government employee like me, you are simply not in the same boat as Maria. And you shouldn't get a poor person's Social Security return rate. You should get a rate similar to all average-income Americans — about 40 percent. And that's what the windfall elimination provision is all about.
IMHO, Congress should do away with the SS exemption and required everybody to pay into it. That would eliminate the confusion and help people whose other retirement income sources may be at risk. If not that, at least require that the non SS payers get a yearly letter explaining to them that WEP will reduce their SS payments, and they might want to invest some of the money they are not paying into SS.
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Old 03-14-2019, 10:11 AM   #25
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Yes if you have 30 years pension for a state that didn’t pay into SS WEP is fair. If you have a 11 year pension (DH’s) and 15 year like me it’s not fair. My SS will be 340 instead of 800.

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