WEP for earnings during a few college years

[reneeh63]

I just received notice of my updated SS Annual Statement and was surprised to see that the estimate actually went down even though I had a decent raise this last year.

They've made major changes to the format (or maybe I'm seeing new info as I'm getting closer to age 62? - I'm 58 now). Anyway, they included a new section on WEP that was not there before. Way back in the '80s I had a few years in grad school where I was a research asst. and got a few bucks. Back then I didn't even realize I wasn't paying into SS...

I guess that's why it's lower now - they are finally taking into account those few years? Even with those I still have 35 years of "substantial" earnings where I've paid into SS - so I guess they'll only dock me 10%?

I still need to check with the university and see what they say but will have to get passed this holiday weekend since I'm lock out of my online accout

What has the experience been for those with only a few years of not paying in to SS?

 

[CindyBlue]

I just received notice of my updated SS Annual Statement and was surprised to see that the estimate actually went down even though I had a decent raise this last year.

They've made major changes to the format (or maybe I'm seeing new info as I'm getting closer to age 62? - I'm 58 now). Anyway, they included a new section on WEP that was not there before. Way back in the '80s I had a few years in grad school where I was a research asst. and got a few bucks. Back then I didn't even realize I wasn't paying into SS...

I guess that's why it's lower now - they are finally taking into account those few years? Even with those I still have 35 years of "substantial" earnings where I've paid into SS - so I guess they'll only dock me 10%?

I still need to check with the university and see what they say but will have to get passed this holiday weekend since I'm lock out of my online accout

What has the experience been for those with only a few years of not paying in to SS?

That doesn't seem right to me. Here's an article I read that says you only need 30 years to eliminate the WEP penalty.

https://carmichael-hill.com/2022/05...ation-provision-wep-impacts-pension-payments/

Here's another...
https://www.helpadvisor.com/social-security/avoiding-the-social-security-windfall-penalty

Can you contact the Social Security office (yeah, I know, that might take a lot of time and effort!) and discuss this?

 

[Alan]

That doesn't seem right to me. Here's an article I read that says you only need 30 years to eliminate the WEP penalty.

https://carmichael-hill.com/2022/05...ation-provision-wep-impacts-pension-payments/

Here's another...
https://www.helpadvisor.com/social-security/avoiding-the-social-security-windfall-penalty

Exactly.

WEP starts being reduced after 20 years contributions and is zero after 30 years.

 

[Accidental Retiree]

Did you check your actual earnings statement against the SS substantial earnings chart?

I also had public sector work and grad school tutoring, lecturing, and TA gigs in the late 80s and into the 90s, and for the most part SS was not deducted from my paycheck.

And other years I made money and paid into SS, but I didn’t reach the substantial earnings threshold. Those years did not help me.

Fortunately, both before and after those public sector years, I had 21 years total of substantial earnings, which I checked and confirmed against the SS chart before I started collecting in 2019.

I had seen WEP and GPO info on my SS statements long before I started collecting. I can see that it is included on my 2017 statement. That is the oldest statement I kept.

 

[reneeh63]

Exactly.

WEP starts being reduced after 20 years contributions and is zero after 30 years.

It is quite confusing - here is something from SSA.gov:

Social Security years of substantial earnings
If you have 30 or more years of substantial earnings,
we don’t reduce the standard 90% factor in our formula.
See the first table that lists substantial earnings for
each year.
The second table shows the percentage used to
reduce the 90% factor depending on the number
of years of substantial earnings. If you have 21 to
29 years of substantial earnings, we reduce the
90% factor to between 45% and 85%. To see the
maximum amount we could reduce your benefit, visit
www.ssa.gov/benefits/retirement/planner/wep.html.

To me, this reads that if I have ANY years at all where I didn't pay in, then there is an automatic reduction in my benefit down to 90% of what it would be. If I have FEWER than 30 years of substantial income with SS deductions, then what I receive from SS is reduced even FURTHER.

 

[Accidental Retiree]

No. The 90% in the SS formula is what everyone gets who has the 30 or more years. It is the “standard.”

At 29 years, your factor would go down to 85%.

At 28 years, it would be 80%.

At 27 years, it would be 75%.

All the way down to 45% at 21 years—which is where I landed.

 

[reneeh63]

Thanks, all - I'll be checking both with the SSA as well as Ohio's state pension.