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Social Security and Windfall Elimination
Old 02-17-2024, 10:27 AM   #1
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Social Security and Windfall Elimination

My wife qualified for SS in 2020 but her benefit was cut back (WEP) significantly because she earned a pension in the Texas Teacher's Retirement system. While we don't like the cut back, we understood it would occur. I just recently filed for my SS and simultaneously my wife applied for a spousal benefit. She was approved for the spousal benefit (approximately $1,100), but like her benefit the spousal benefit was significantly cutback. Given the incompetence of the SSA I am trying to find out if they made a mistake by cutting back the spousal benefit or if the regulations provide for this. Any thoughts are appreciated.
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Old 02-17-2024, 10:41 AM   #2
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I don't think it's a given the SSA is incompetent.
The rules may be unfair, but they are the rules.
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Old 02-17-2024, 10:46 AM   #3
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The WEP reduces her own benefit based on her own work record.
https://www.ssa.gov/policy/docs/prog...provision.html

The GPO (Government Pension Offset) reduces what she would get as a spouse claiming on your work record. Her benefit as a spouse is reduced by 2/3 of her pension.https://www.ssa.gov/policy/docs/prog...on-offset.html

DH has a government pension and is subject to WEP and GPO. While I don't like it, we understood from the beginning why this is applied. The WEP has some logic to it, but the GPO just seems unfair to me. If a spouse never worked or never completed 40 credits for SS, that spouse would be entitled to 50% of the other spouse's benefit. But because DH has a govt pension he gets nothing as my spouse.

Our son got a job with Federal benefits, including a pension. The first thing I asked him was if he'd be paying into Social Security. Yes, he pays into Social Security and will not be subjected to WEP and GPO.
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Old 02-17-2024, 10:57 AM   #4
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Just looking for confirmation that the SS rules had been properly administered. Thanks for clearing that up. As to my comment regarding SS incompetence, I stand by that. Called SS and waited an hour to solve a problem. Representative spends 15 minutes putting me on hold attempting to find the answer. Then when she has no idea what the answer is (unlike posters on this forum), she makes a phone appointment four weeks from the call to speak to someone who apparently can answer the question. If SS was a real business, they would be out of business.
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Old 02-17-2024, 11:06 AM   #5
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Originally Posted by horrnsfan View Post
Just looking for confirmation that the SS rules had been properly administered. Thanks for clearing that up. As to my comment regarding SS incompetence, I stand by that. Called SS and waited an hour to solve a problem. Representative spends 15 minutes putting me on hold attempting to find the answer. Then when she has no idea what the answer is (unlike posters on this forum), she makes a phone appointment four weeks from the call to speak to someone who apparently can answer the question. If SS was a real business, they would be out of business.
I have to laugh.

Guess you haven't called the IRS too often either.

I just spent 1 MONTH, getting Astound to install my internet. This involved 4 phone calls, 2 chats, and 3 visits by Techs to the house.

They are more incompetent than SS and are still in business....
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Old 02-17-2024, 11:11 AM   #6
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Yes, I try to avoid contacting government organizations at all cost. However, like you I recently had an issue with Xfinity. I won't go into the detail, but I was stuck in an endless phone loop with no ability to speak to a real human. I think internet and cable providers are all about the same. Their customer service is atrocious.
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Old 02-17-2024, 01:17 PM   #7
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I too, get the frustration of getting anyone to answer even the simplest of questions.

I spent over a week with 2 dealers and several phone calls trying to schedule a warranty service appointment. It wasn't until I reached the service manager, that I got a response within a couple of hours.

This site is great with getting good answers to finance and virtually all FIRE related questions. SS is just one of them.
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Old 02-17-2024, 01:18 PM   #8
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The WEP reduces her own benefit based on her own work record.
https://www.ssa.gov/policy/docs/prog...provision.html

The GPO (Government Pension Offset) reduces what she would get as a spouse claiming on your work record. Her benefit as a spouse is reduced by 2/3 of her pension.https://www.ssa.gov/policy/docs/prog...on-offset.html

DH has a government pension and is subject to WEP and GPO. While I don't like it, we understood from the beginning why this is applied. The WEP has some logic to it, but the GPO just seems unfair to me. If a spouse never worked or never completed 40 credits for SS, that spouse would be entitled to 50% of the other spouse's benefit. But because DH has a govt pension he gets nothing as my spouse.....
The young wife and I are in the same boat. She is not eligible for SS on her own record and 2/3 of her teacher pension exceeds my social security PIA. And since it is COLA'd the same as SS, it always will. Which means she currently gets no spousal benefit and will get no survivor benefit. So when I go, all the social security money goes too. I had to buy a whole life insurance policy (which was paid up before we retired) to compensate for that loss of income.
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Old 02-17-2024, 03:07 PM   #9
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The young wife and I are in the same boat. She is not eligible for SS on her own record and 2/3 of her teacher pension exceeds my social security PIA. And since it is COLA'd the same as SS, it always will. Which means she currently gets no spousal benefit and will get no survivor benefit. So when I go, all the social security money goes too. I had to buy a whole life insurance policy (which was paid up before we retired) to compensate for that loss of income.
Yes, DH will not get my SS if I go first. But he can change his pension from 100% to the survivor to single and get a pop up adjustment.
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Old 02-18-2024, 07:48 AM   #10
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We are also in the same situation. Wife worked in private sector, got all her quarters in for SS and then switched to public school teaching mid-career where she earned a small pension but wasn’t contributing to SS. She will be subject to WEP provision.

We addressed this in my pension when I retired. I paid into SS and also into a pension system my entire 4 decade career. If I die first my pension continues unchanged as does her very small teacher pension. Haven’t done the math but WEP will significantly reduce my SS benefit. Any SS she gets after i pass won’t be a significant part of her income.

Sadly a few of her retired and now widowed teacher colleagues planned poorly for retirement and are now struggling financially. Very sad.
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Mitigate GOP/WEP
Old 02-18-2024, 05:43 PM   #11
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Mitigate GOP/WEP

Quote:
Originally Posted by horrnsfan View Post
My wife qualified for SS in 2020 but her benefit was cut back (WEP) significantly because she earned a pension in the Texas Teacher's Retirement system. While we don't like the cut back, we understood it would occur. I just recently filed for my SS and simultaneously my wife applied for a spousal benefit. She was approved for the spousal benefit (approximately $1,100), but like her benefit the spousal benefit was significantly cutback. Given the incompetence of the SSA I am trying to find out if they made a mistake by cutting back the spousal benefit or if the regulations provide for this. Any thoughts are appreciated.
You can mitigate the GOP and WEP. 1st, you must gave 40 quarters of substantial income where you paid into SSA ( 10 years). The more years that you can work paying into SSA, ( part-time work) or working after you retire from your non- SSA pension. When you get a total of around 28 years into SSA, this will very significantly reduce the affects of GOP/ WEP. Now, wait until 72 before you claim for SS, for the maximum SSA benefit. It is appx 40% higher then taking it at your Full Retirement age. You will get COLAS as well.
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Old 02-18-2024, 06:36 PM   #12
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You can mitigate the GOP and WEP. 1st, you must gave 40 quarters of substantial income where you paid into SSA ( 10 years). The more years that you can work paying into SSA, ( part-time work) or working after you retire from your non- SSA pension. When you get a total of around 28 years into SSA, this will very significantly reduce the affects of GOP/ WEP. Now, wait until 72 before you claim for SS, for the maximum SSA benefit. It is appx 40% higher then taking it at your Full Retirement age. You will get COLAS as well.
Social Security does not increase beyond the age of 70. Where are you getting 72 years old?
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Old 02-18-2024, 07:08 PM   #13
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Social Security does not increase beyond the age of 70. Where are you getting 72 years old?
Sorry about thar! A slip of the finger. Take your SSA benefits claim at age 70.
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Old 02-18-2024, 07:14 PM   #14
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I don't think it's a given the SSA is incompetent.
The rules may be unfair, but they are the rules.
The rules are not unfair overall. Though there are cases where many people feel they are unfair. SS has several bend points. These bend points return a relatively greater amount of SS dollars to lower income people who contribute to SS than higher income people who contribute to SS. People who don’t pay into SS because they work in or for certain government employers look like low income earners, but actually they are often among the higher earnings. WEP and GPO simply adjust the benefit to correct that error. Keep in mind that the OP’s spouse had a lot of extra take home pay for many years, thanks to not paying into SS.

As somebody who has paid SS taxes on every penny I have ever earned, I would be very upset if people who paid very little into SS got the same benefit as me. After all they kept all the money that I had to pay into SS. Why in the world would they think they should get the same benefit as I do? That would be very unfair.

The solution, IMO, is to do away with the exemptions for paying into SS. They simply cause a lot of confusion. When everybody pays into SS on an equal basis, then everybody can be treated the same. You might read this article as the author explains it a lot better than I can.

https://www.creators.com/read/your-s...ng-wep-and-gpo

Quote:
The problem is that people who spend the bulk of their working lives not paying into Social Security are automatically treated as low-income people by the Social Security Administration's computers. That's because there are "zeros" on their Social Security earnings record for every year they spent in their non-Social Security job. SSA's records won't show they were actually working at the other job and earning another pension. Instead, their Social Security earnings record simply shows gaps in their work history. So, when figuring their Social Security retirement benefit, SSA's computers automatically use the formula intended to compensate a lower income person — and they usually get the 90% replacement rate.

But teachers, police officers, firefighters and other government employees generally can be classified as people with average incomes, so they should get the same Social Security replacement rate paid to all middle-class workers.
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Old 02-18-2024, 09:03 PM   #15
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We are also in the same situation. Wife worked in private sector, got all her quarters in for SS and then switched to public school teaching mid-career where she earned a small pension but wasn’t contributing to SS. She will be subject to WEP provision.

We addressed this in my pension when I retired. I paid into SS and also into a pension system my entire 4 decade career. If I die first my pension continues unchanged as does her very small teacher pension. Haven’t done the math but WEP will significantly reduce my SS benefit. Any SS she gets after i pass won’t be a significant part of her income.

Sadly a few of her retired and now widowed teacher colleagues planned poorly for retirement and are now struggling financially. Very sad.
The part I bolded above....How will WEP reduce your SS benefit if you paid into SS and a pension system for 4 decades? WEP and GPO only affect the worker who did not pay into the SS system while paying into a govt pension. From your description your wife is subjected to WEP and GPO but you will not be.
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Old 02-18-2024, 10:33 PM   #16
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Originally Posted by Chuckanut View Post
The rules are not unfair overall. Though there are cases where many people feel they are unfair. SS has several bend points. These bend points return a relatively greater amount of SS dollars to lower income people who contribute to SS than higher income people who contribute to SS. People who donít pay into SS because they work in or for certain government employers look like low income earners, but actually they are often among the higher earnings. WEP and GPO simply adjust the benefit to correct that error. Keep in mind that the OPís spouse had a lot of extra take home pay for many years, thanks to not paying into SS.

As somebody who has paid SS taxes on every penny I have ever earned, I would be very upset if people who paid very little into SS got the same benefit as me. After all they kept all the money that I had to pay into SS. Why in the world would they think they should get the same benefit as I do? That would be very unfair.

The solution, IMO, is to do away with the exemptions for paying into SS. They simply cause a lot of confusion. When everybody pays into SS on an equal basis, then everybody can be treated the same. You might read this article as the author explains it a lot better than I can.

https://www.creators.com/read/your-s...ng-wep-and-gpo
I still think it's unfair, and maybe you will when you realize people who paid $0 into SS get quite a bit of SS money.

How is that for unfair, they didn't work and they get free SS money !

It's the rules (which I think in various situations are unfair), and the rule is spousal benefit.
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More on wep
Old 02-18-2024, 11:27 PM   #17
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More on wep

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Originally Posted by horrnsfan View Post
My wife qualified for SS in 2020 but her benefit was cut back (WEP) significantly because she earned a pension in the Texas Teacher's Retirement system. While we don't like the cut back, we understood it would occur. I just recently filed for my SS and simultaneously my wife applied for a spousal benefit. She was approved for the spousal benefit (approximately $1,100), but like her benefit the spousal benefit was significantly cutback. Given the incompetence of the SSA I am trying to find out if they made a mistake by cutting back the spousal benefit or if the regulations provide for this. Any thoughts are appreciated.
The people who get govt pensions and did not pay into ssa, will mot get ssa benefits because they didn't pay into it, and did pay into a different pension plan, for which they receive non-ssa retirement pension funds from. Some of those people, like we, also paid into ssa for years working from different jobs that paid into ssa. These are the people who are impacted by the WEP/ GOP regulations. So like me, i paid into ssa from working in other jobs and i did that for about 28 yrs (you mudt have a minimum of 10 yrs). Since i paid into ssa for the 28 yrs, the only thing that is fair is to pay me what any other person would get for 28 yrs and based upon the earnings I made. Congress was suppose to eliminate these provisions this year because WEP/ GOP is unfair. Pay us our fair amount!.
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Old 02-19-2024, 04:52 AM   #18
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The part I bolded above....How will WEP reduce your SS benefit if you paid into SS and a pension system for 4 decades? WEP and GPO only affect the worker who did not pay into the SS system while paying into a govt pension. From your description your wife is subjected to WEP and GPO but you will not be.
I think that he meant that he had two jobs, one paying into social security and one not paying into social security and getting a government pension, which is very common for teachers who work at something else during the summer. In that case, WEP will affect him, at least until he clears the "30 years of substantial earnings" test.
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Old 02-19-2024, 05:06 AM   #19
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Incompetent? Unfair? SSA has been underfunded and understaffed for years, that’s going to impact service. That said, I wonder if technology could improve productivity to offset headcount issues.

And Social Security payments made to retired Americans in 2021, and every year after, will exceed tax revenues coming into the federal government in the wake of the coronavirus pandemic's economic downturn, according to a new government report.

Social Security payments for retired Americans will be exhausted in 2034 — a year earlier than previously predicted, says the 2021 report from the Social Security and Medicare Boards of Trustees, which oversees both programs. After that, tax incomes will only cover 76% of anticipated benefit needs.

Voters and special interests won’t let Congress address the issues. We get what we (collectively) deserve…
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Old 02-19-2024, 05:31 AM   #20
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I still think it's unfair, and maybe you will when you realize people who paid $0 into SS get quite a bit of SS money.

How is that for unfair, they didn't work and they get free SS money !

It's the rules (which I think in various situations are unfair), and the rule is spousal benefit.

Unfair is different than unequal. Unfair is if they did NOT follow the rules that everyone has been living under. Unequal is that DW basically paid in to SS for no reason. Had she never w*rked, she'd get as much as she does now (half of mine.) That's "fair" because it's the rules and she knew them going in. But it's not equal.
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