Need Ideas to Help My Sister

[ivinsfan]

Quote:

Originally Posted by teetee I would recommend it for no RMDs. Also it encourages regular savings and investment. Any tax advantaged retirement accounts help.

RMD won't be an issue for this lady...but this a minor decision compared to what she has going on right now.

[Teacher Terry]

There’s a special WEP calculator on the SS website where you can enter your earnings each year and it calculates your true SS. Based on that I waited until 65 to take mine.

[Chuckanut]

If she can work in a job that pays SS taxes, that will minimize WEP reductions. IIRC, WEP is not On or Off. The more years one pays into SS the less the WEP reduction. At some point, WEP is no longer applied.

[Accidental Retiree]

Quote:

Originally Posted by Chuckanut If she can work in a job that pays SS taxes, that will minimize WEP reductions. IIRC, WEP is not On or Off. The more years one pays into SS the less the WEP reduction. At some point, WEP is no longer applied.

It takes 30 years of substantial earnings for WEP not to apply.
The WEP starts to taper off, 5%/year, at 20 years of substantial earnings.

There’s a chart on the SS site that shows substantial earnings amounts for each year.

It’s great, OP, that you’re aware of the WEP and can help your sister prepare.

I have a couple of teacher friends who took on teaching jobs later in life, to earn a pension.

When the WEP whacked their SS, it came as quite a surprise.

One of them has been working a small job in retail for 3 more years, after her 2nd retirement, because of this surprise that I told her about.

[Sunset]

Quote:

Originally Posted by Accidental Retiree It takes 30 years of substantial earnings for WEP not to apply. The WEP decrease starts to taper off, 5%/year, at 20 years of substantial earnings. There’s a chart on the SS site that shows substantial earnings amounts for each year.

Yes, and it's annoying that only substantial earnings count, which are quite a bit higher than qualifying for SS per year.

So a person could scrape by for 30 yrs , qualifying for full SS but a low value, then if they had some other job that paid a pension, they would be Whip'd WEP'd.