Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 05-04-2019, 10:59 AM   #61
Recycles dryer sheets
Niuatoputapu's Avatar
 
Join Date: Nov 2014
Posts: 143
I agree generally with the folks who note that people who split their careers between the SS and the non-SS systems are hurt most by WEP. But not so much for us. Here is our situation.

Me: 44 years paying into SS, the higher wage earner
DW: 21 years paying into SS, 15 years and counting CalSTRS (California teachers)

WEP means DW will have her SS cut in half, approximately $900/mo becomes $450/mo

DW is entitled to $2200/mo (and still growing) CalSTRS pension

The sum of the two (her SS and her CalSTRS) is greater than a SS-alone at her wage levels would have been. That's good. No complaint.

Some more financial advantage - I am a 100% pension survivor while she continues to work, and will be a 50% pensioner if she passes after retirement. I would not be subject to WEP. A definite perk compared to losing the lower earning spouse's SS upon their death.

A financial disadvantage - GPO will negate the survivor benefits of my SS. If I started SS benefits at 62 (which I did not) GPO would reduce her survivor benefits to zero.

Followed by financial advantage, I think (more research to be done) - if I wait until age 70 to collect SS - because my SS benefits will grow 6-8% annually plus COL while her pension will grow by just COL, GPO has less impact, and there will be survivor benefits available to her. At my age 70 SS, her GPO adjusted survivor benefits based on my SS plus her pension will be greater than just survivor benefits that would have been available if we both had just worked under SS.
__________________
ER'd 6/5/2015 at age 58. DW targets R in 2021 and will then start her SS.
Planned WR before my SS (2022-2026) is 4-5%, then we will start my SS and a lower WR at age 70 (2027)
Niuatoputapu is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 05-04-2019, 11:03 AM   #62
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 11,386
Quote:
Originally Posted by Chuckanut View Post
You forgot the offset provision in SS.
No, not really. I don't think of state pensions as a "SS substitute" (at least not until you suggested it - maybe now I will). Generally, pensions do not offset SS spousal or survivor benefits.

To use your view, I guess we should refer to my DW's state teachers pension as her "State SS Substitute."

Quote:
Not really fair, is it?
What isn't fair in the WEP/GPO world are the loophole provisions such as "years of substantial earnings" and those type of things.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 05-04-2019, 11:12 AM   #63
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Chuckanut's Avatar
 
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 12,013
Quote:
Originally Posted by youbet View Post
Today, Illinois teachers for example, earn a "SS substitute" (although it costs them additional money over SS, 9% vs 6%). There is no pension, other than in nominal terms, just an SS substitute as Margenau points out.
Yes, it is a SS substitute. More than a substitute since it pays bigger benefits than SS. Plus Illinois teacher gets to take home an extra 3% compared to people like me who paid into SS and made pension contributions. All of this makes comparison hard.

It's all very complicated and I can see why people get confused. But, if we run two middle class earners with identical lives except one paid into SS and one did not we can see that the person who did not pay into SS comes out ahead if there was no WEP or GPO. Of course, that assumes that states like Illinois, Kentucky and others can fix their pension issues. I feel your pain on that one. It has to cause a lot of worrying an anxiety.

I suppose we could discuss this until the cows come home. For now we can just agree to disagree.
__________________
The worst decisions are usually made in times of anger and impatience.
Chuckanut is offline   Reply With Quote
Old 05-04-2019, 11:23 AM   #64
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Chuckanut's Avatar
 
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 12,013
Quote:
Originally Posted by youbet View Post
No, not really. I don't think of state pensions as a "SS substitute" (at least not until you suggested it - maybe now I will). Generally, pensions do not offset SS spousal or survivor benefits.

To use your view, I guess we should refer to my DW's state teachers pension as her "State SS Substitute."
.
My pension does not offset SS benefits because I also paid into SS. Any offset would come out of the SS payment.

As one person pointed out his state technically has a SS substitute plan for retirement, not a pension. Perhaps all states should all start calling it the SS Substitute Retirement Benefit. :-)

It would be a lot easier of everybody paid into SS and we didn't need these confusing laws. I can't help but think that WEP and GPO seem unfair to those in states whose pension plan funding is weak.

I feel for those in states like Kentucky and Illinois. The uncertainty can't be good for the health of anybody involved - financially or physically.
__________________
The worst decisions are usually made in times of anger and impatience.
Chuckanut is offline   Reply With Quote
Old 05-04-2019, 11:33 AM   #65
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 11,386
Quote:
Originally Posted by Chuckanut View Post
Yes, it is a SS substitute.
So you're getting double SS? Wow! Very sweet. You get Fed SS + state SS substitute. Nice! My only objection is that you should be subject to WEP (reducing your fed SS) since you get state SS substitute. Kinda makes you one of those infamous double-dippers.
Quote:
(More than a substitute since it pays bigger benefits than SS. Or am I wrong?
You're wrong. Here in Illinois, changes made about seven years ago reduced teacher's pensions to be approximately the equivalent of SS. An apples to oranges comparison since some aspects are better, some worse, but most rank them about equivalent in overall value. The Illinois SS substitute (as you put it) just cost the members more than if they had fed SS.
Quote:



I suppose we could argue this until the cows come home. For now we can just agree to disagree.
Yes, please let's stop the "fairness" discussion. Since you're able to double-dip gov't pensions while avoiding WEP and GPO, you're the clear financial winner and knew how to play your cards. So, a tip of the hat to you and I'm outta here........
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 05-04-2019, 11:56 AM   #66
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
 
Join Date: May 2009
Posts: 8,641
Quote:
Originally Posted by Chuckanut View Post
As a former teacher I've always been embarrassed by teachers who claimed WEP was unfair to them.

If I was a public employee I would not make a long-term career working for any government agency that did not participate in SS.


I think certain scenarios there is a legitimate case though. There are about a dozen or so states where public teachers do not pay into SS. If a spouse say taught 10-15 years in a SS/pension hybrid state and then had to relocate to a state where no SS contributions occurred, they would be dinged unfairly in my opinion.
As in this case, two halves wont make a whole. The other 15 year non SS covered pension would force a reduction in the SS part of the other vested system in which person originally worked at.
The fact my SS is getting max whacked is insignificant to me as I have a bunch of Mickey Mouse years strung through the decades in PT jobs unrelated to career. So its no skin off my back. I will cheerfully cash my $177 WEP severely whacked SS check every month when I turn 62.
Mulligan is offline   Reply With Quote
Old 05-04-2019, 12:15 PM   #67
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Chuckanut's Avatar
 
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 12,013
Quote:
Originally Posted by youbet
So you're getting double SS? Wow! Very sweet. You get Fed SS + state SS substitute. Nice! My only objection is that you should be subject to WEP (reducing your fed SS) since you get state SS substitute.
Umm... Perhaps I wasn't clear. I meant that states that offer 'pensions' and don't collect SS are in effect offering a SS substitute. In my state I fully contributed to SS like the vast majority of us. My apologies if my reply was confusing.
__________________
The worst decisions are usually made in times of anger and impatience.
Chuckanut is offline   Reply With Quote
Old 05-04-2019, 12:22 PM   #68
Confused about dryer sheets
 
Join Date: Aug 2016
Location: Del Mar
Posts: 5
Quote:
Originally Posted by Sunset View Post
I was (as far as I know) following the WEP info.
WEP has to account for how much non-SS pension a person gets as some are very low and others are very high.
When dealing with substantial earning of 20 yrs or less.
There does seem to be 2 methods of calculating the numbers, but with less than 20 years the 50% rule seems to me to be the applicable one.
This link seems easier to read than gov't ones.

https://en.wikipedia.org/wiki/Windfa...tion_Provision

"
3. Calculate the PIA based on this, rounding down to the nearest dime.
4. Calculate the PIA normally and reduce by 50% of the amount of the non-covered pension's monthly payment.
5. Select the higher value given by steps 3 and 4."

Here are some fake example numbers as I think it's simpler than being abstract.
I get external pension of $600 at full retirement age, but I take it years early and get $300.
I have 12 yrs of SS earnings and will get $1,500 at full retirement age without considering WEP.
Without doing the math, just assume my SS at 70 is $2,000.

So I take SS at 70, instead of getting $2,000, I would get: ($2,000 - 50% of $300) = $1,850
If I took SS at full retirement age I would get with WEP $1,500 - 50% of $300 = $1,350

Plus I collect the $300 non-SS pension for many years previous and onward.
Here's a detailed calculator one can download and test different scenarios. Under Forms - Supplemental Worker Information you add non-covered pension.

https://www.ssa.gov/OACT/anypia/anypia.html
DelMarGirl is offline   Reply With Quote
Old 05-05-2019, 12:17 AM   #69
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Sunset's Avatar
 
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 11,197
Quote:
Originally Posted by DelMarGirl View Post
Here's a detailed calculator one can download and test different scenarios. Under Forms - Supplemental Worker Information you add non-covered pension.

https://www.ssa.gov/OACT/anypia/anypia.html
Thanks, I might just download that to my windows machine.
I did use the online WEP version to try parameters:
https://www.ssa.gov/planners/retire/anyPiaWepjs04.html
__________________
Fortune favors the prepared mind. ... Louis Pasteur
Sunset is offline   Reply With Quote
Old 05-05-2019, 06:00 AM   #70
Thinks s/he gets paid by the post
 
Join Date: Jun 2003
Location: Historic Florida
Posts: 4,738
I downloaded it a few months ago, it works well once you have all your data in it. Your substantial earnings data can also be found, once you log into SSA.gov.
__________________
"Never Argue With a Fool, Onlookers May Not Be Able To Tell the Difference." - Mark Twain
ShokWaveRider is offline   Reply With Quote
Reply

Tags
elimination, provision, social security, windfall


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Social Security and the Windfall Elimination Provision horrnsfan FIRE and Money 5 03-08-2018 08:53 PM
Windfall elimination: w2 jobs, now state columbus FIRE and Money 19 10-12-2017 12:44 PM
Mystery of SS Windfall Elimination Provision H2ODude FIRE and Money 12 05-02-2013 01:17 AM
Mega Corp Early Retirees with Health Ins -- Read HC Reform Provision chinaco Health and Early Retirement 8 03-24-2010 04:29 PM

» Quick Links

 
All times are GMT -6. The time now is 08:43 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.