Mixed social security coverage

[trapperjohn]

My apologies if this was already discussed. I searched, but didn't see this question being discussed ....

I've w*rked 35 years in various jobs where I paid SS taxes out of each paycheck. A few months ago, I visited the local SS office and received an estimate that I would receive a benefit of about $22K a year if/when I started receiving SS payments at 62.

Just this week, I started w*rking in a government position that is NOT covered by SS....in other words...SS taxes are no longer coming out of each paycheck. I plan on w*rking at this position for about 5 years until I'm about 63 years old. After that, I'll be eligible to retire and collect a government pension of around $450/month.

Since I'll be w*rking for at least 5 years in this government job that does not collect SS taxes, will that effect my estimated SS benefit when I finally start to receive those SS benefits?

 

[Sarah S]

I think the answer is yes in 2 ways. Your estimate was likely based on the assumption you would continue to work in a social security contributing job at your last pay. You already have enough years that none of the averaged years will be 0 but presumably your first years were not as high paying as your last. It might not make a big difference but some so you should recalculate.

I think though if you collect a government pension that will reduce your social security take as well

 

[Accidental Retiree]

Congrats on the new position!

You are probably thinking about the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO)adjustments to Social Security. Here's the link to WEP.

Retirement Planner: Windfall Elimination Provision (WEP)

There are 2 ways your SS could be affected: WEP and GPO.

If you have fewer than 30 years of substantial earnings, according to what SS deems substantial, your social security will be reduced to some extent by your pension earnings.

If you have 30 years paying into SS at the required levels, then your SS should not be reduced. The link about will tell you more and provides you with a calculator and a chart telling you each year's earnings to help you determine whether you've hit the 30 years.

Read also about GPO to see if that will have any effect on you.

This article will also be useful to you.

http://financialducksinarow.com/4415/substantial-earnings-with-regard-to-wep/

 

[akck]

If I had to guess, based on what you'll receive for SS, WEP won't affect you as you've likely had 30 years of substantial earnings. Any reductions you might receive will be due to them projecting continued SS qualified work until you retire, which drops off some of your lower earning years.

 

[gauss]

I just posted over here over here about how you can get a SS estimate that does not included future earnings. The estimate only shows what you have already accrued. The trick is to enter $0 as last years earnings in the Social Security estimator.

-gauss