Social Security and the Windfall Elimination Provision

[horrnsfan]

Here is my situation and question.

-I am 60 and do not intend on taking SS until age 66 1/2.
-My wife will be 63 in November 2018 and is currently working for a school district which does not take out SS. At age 65 she will retire with a pension of about $1,000 per month. She previously worked in a corporate job where she earned her necessary quarters and would be entitled to a $400 per month SS benefit if not for the Windfall Elimination Provision.
-My original plan was for her to wait until I reach 66 1/2 and then file to have her receive half of my SS benefit less the impact of the Windfall Elimination Provision. My projected benefit will be about $2,500 per month and I have calculated that she would end up receiving about $500 per month after the Windfall Elimination Provision is applied.

Two questions-1) could she begin receiving her reduced benefit now under her earned SS without it impacting her ability to receive my benefit when I turn 66 1/2. My assumption is that if she can take her benefit now it would cease when she turns 65 and begins taking her school pension. 2) is there a better approach to implement that would maximize the amount of SS she actually receives in addition to taking her pension at age 65.

 

[Gumby]

Here is my situation and question.

-I am 60 and do not intend on taking SS until age 66 1/2.
-My wife will be 63 in November 2018 and is currently working for a school district which does not take out SS. At age 65 she will retire with a pension of about $1,000 per month. She previously worked in a corporate job where she earned her necessary quarters and would be entitled to a $400 per month SS benefit if not for the Windfall Elimination Provision.
-My original plan was for her to wait until I reach 66 1/2 and then file to have her receive half of my SS benefit less the impact of the Windfall Elimination Provision. My projected benefit will be about $2,500 per month and I have calculated that she would end up receiving about $500 per month after the Windfall Elimination Provision is applied.

Two questions-1) could she begin receiving her reduced benefit now under her earned SS without it impacting her ability to receive my benefit when I turn 66 1/2. My assumption is that if she can take her benefit now it would cease when she turns 65 and begins taking her school pension. 2) is there a better approach to implement that would maximize the amount of SS she actually receives in addition to taking her pension at age 65.

You need to familiarize yourself with the Government Pension Offset (GPO) which controls how much her spousal or survivor benefit is reduced. The GPO subtracts 2/3 of her pension from the spousal SS benefit. It can totally eliminate the benefit (it will for my young wife). See here https://www.ssa.gov/pubs/EN-05-10007.pdf

By contrast, the WEP applies only to SS she would get on her own record. WEP will reduce but not eliminate her own SS benefit. https://www.ssa.gov/pubs/EN-05-10045.pdf

 

[timo2]

I've been on the WEP/GPO snipe hunt for more than a few years. Assuming that your wife's pension is for life? and with no COLA? If those are true, than the best option I see is to have her start collect her pension when she retires and then apply for SS later. Which is for her to wait to collect her SS benefits, which is at her full retirement age for spousal benefits (like you suggested) and 70 for her own benefits. Because as SS gets inflation adjusted, the difference between the SS payments and the no-COLA pension payment becomes greater. There is a lot of math here. The only place I have found that addresses the WEP and GPO properly is the maximize my social security site ($40 for one year) https://maximizemysocialsecurity.com/ One payment is all you probably need.

As I understand the SS policy, if your wife applies for her SS early, she is stuck with that amount forever. Even if she applies for spousal benefits later, as I understand it, she will be stuck with her reduced SS amount from filing early (members of ER, please correct me if I'm wrong). And as you noted, if she applies for SS while still working, the WEP will still affect her. Here is the SS application form https://www.ssa.gov/forms/ssa-1-bk.pdf

Here are a couple of other documents https://secure.ssa.gov/apps10/poms.nsf/lnx/0202608100
https://secure.ssa.gov/apps10/poms.nsf/lnx/0300605364#c4

 

[horrnsfan]

Thanks for the feedback. Sounds like I should invest the $40 and see what the maximizemysocialsecurity site offers. While her SS is very insignificant in our overall asset mix......I don't want to forego something that is rightfully mine by making an uninformed decision.

 

[Free]

Here is my situation and question.

-I am 60 and do not intend on taking SS until age 66 1/2.
-My wife will be 63 in November 2018 and is currently working for a school district which does not take out SS. At age 65 she will retire with a pension of about $1,000 per month. She previously worked in a corporate job where she earned her necessary quarters and would be entitled to a $400 per month SS benefit if not for the Windfall Elimination Provision.
-My original plan was for her to wait until I reach 66 1/2 and then file to have her receive half of my SS benefit less the impact of the Windfall Elimination Provision. My projected benefit will be about $2,500 per month and I have calculated that she would end up receiving about $500 per month after the Windfall Elimination Provision is applied.

Two questions-1) could she begin receiving her reduced benefit now under her earned SS without it impacting her ability to receive my benefit when I turn 66 1/2. My assumption is that if she can take her benefit now it would cease when she turns 65 and begins taking her school pension. 2) is there a better approach to implement that would maximize the amount of SS she actually receives in addition to taking her pension at age 65.

Interesting that DW are in the same situation but about three years older. I'm 63, DW just turned 66 which is full retirement age for her in SS terms. She earned a modest amount of money early in her career under SS and for the past 28 years has worked for city government without the SS contribution. She'll earn a pension when she retires. She works part-time and would like to work until age 70 (not my choice). She is able to get about $700 a month from SS now while she works but it will be reduced by about half when she begins her pension.

I plan to collect SS at FRA (66 and 2 months) or later. The SS agent did the calculation on both WEP and GPO and calculated that she would get nothing by claiming on my SS, so she's claiming on her own. Not sure if she's going to eligible for survivors benefit if I die first. My benefit will be close to 2800/mo. We had one SS agent tell us yes and another said no.

 

[timo2]

We had one SS agent tell us yes and another said no.

It might be worth it to use that maximize my SS site, since you are getting different answers. [I am not an agent of that company....they just have the best GPO /WEP analysis I have found (so far)]. And you can use the 'ask larry' feature on the site even if you are not a customer. Check out the WEP and GPO answers https://maximizemysocialsecurity.com/tags/non-covered-pension-wep-gpo