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Social Security and the Windfall Elimination Provision
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- Опубліковано 7 січ 2021
- The Windfall Elimination Provision (WEP) is a provision in United States law that changes the way your U.S. Social Security benefits are calculated. WEP can reduce your U.S. retirement or disability benefits if you receive a pension based on work and you did not pay U.S. Social Security taxes on those earnings.
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Nice job! Good examples. Clear explanation. Thanks.
Excellent video. This is one of the first videos where the retirement expert mentioned and understands the terms “bend points” and “AIME”. Basically the WEP is a 56% reduction (90-40/90) of the first bend point.
I recently filed for SS with my Federal (non coveted) pension and just over 40 credits(quarters) of SS earnings. Both SS representatives never heard the term “bend point”. I politely tried to explain that SS is a social program that returns a higher percentage of lifetime (35 years) income to lower income individuals. Basically it’s an income replacement program where the goal is to keep lower earners above the poverty line. Hence, 90% of a low AIME (first bend point) is replaced by SS. 32% for earnings above that to the 2nd bend point, and only 15% from there to the SS limit. The Federal non covered pension reduces that first bend point % to 40%.
Another factor to consider- the WEP reduction can never be more than 1/2 the non covered pension amount. This “insurance “ is for those people who get a very small non covered pension.
I taught in Texas then Oklahoma. I retired, now I'm going back to work as a teacher due to WEP. My ss check and retirement is not enough to live on. Praying I will be able to teach 5 more years then retire again.
I know how frustrating that can be from working with many clients in your situation but just remember it's never a bad time to make good decision with your retirement so go ahead put in those five years save as much as you can and try to retire with more assurance. Thanks for watching please like, share and subscribe!
Teachers need total repeals of WEP and Government Pension Offset. HR 82 and S 1302.
Totally agree and the bill introduced is a major step in that direction!
So you want a better deal that the rest of us? If with the WEP, you did a calculation as if all your income were SS, and you ended up with more, I would think the WEP formula needed correction, but I doubt that would be the case for many (maybe none).
I realize the math is contorted, but you are are getting a 40% replacement for the first segment on your second job. The rest of us will only get a 32%, possible 15%, replacement on an additional job.
You are likely ahead but don't know it. Financial Advisors seem to fan the flames of discontent to get your business.
The thing is, it isn't that the Gov is taking money from you, but it is adjusting the amount you actually earned/saved. When you log into SSA page and track your account, it gives you an estimated amount, that is based on things staying the same. But if you leave the private sector and stop contributing to SSA, the estimate is no longer accurate.
Thank you for the important info. This applies to me and I am coming up on social security age.
Q
Thank 😊 you ❤️
Well done.
Very professional 👏 👌 👍
Keep it up!
Q ❤️
Thank you!
That WEP and GPO legislation was a disgrace! Should never have been passed!!
So you want a better deal that the rest of us? If with the WEP, you did a calculation as if all your income were SS, and you ended up with more, I would think the WEP formula needed correction, but I doubt that would be the case for many (maybe none).
I realize the math is contorted, but you are are getting a 40% replacement for the first segment on your second job. The rest of us will only get a 32%, possible 15%, replacement on an additional job.
You are likely ahead but don't know it. Financial Advisors seem to fan the flames of discontent to get your business.
WRT GPO (not the topic of this video) do you realize that when a SS couple with two incomes file for SS, the alleged 50% spousal benefit is decreased because of that persons SS benefit. We do not get spousal and the personal, just like GPO reduces spousal. And Survivor is the effectively the larger of the two benefits, not the sum - also just like GPO. GPO is reasonable and fair!
I moved from Virginia to Ohio in September 2021 to teach and learned about this WEP from STRS. I don't want my social security disturbed so I'm moving back to Virginia more than likely. However, even though this is a WEP state, can I have an accountant to deduct social security payments from my checks to deposit into my SSI account such as entrepreneurs do?
Hi this not something that you can do, your current employer must take out for Social security or you would need to have some self-employment income to have your accountant take out for Social Security.
Carson - I suspect you know that the reason for WEP is that SS does not replace income linearly, that is, with the bend points low-income workers get a higher replacement percent that moderate and high-income workers. If non-SS/SS (dual) workers did not have a WEP adjustment, it would be like an SS worker starting over a zero for a second job. We don't get to do that so why should dual workers. WEP is fair, double-dipping is NOT fair!
I have worked in Florida for 28 years and recently lost my job and had back surgery. I have a small amount of Social Security in UK as well. Will this effect my US Social Security.
@Tony Green Thanks for engaging and commenting on this educational video, comments like yours help others who might have the same question. This is an interesting question. I don't have a full understanding of how the Social Security/pension system works in the UK but I do understand how your Social Security here in the US may be affected by a pension from the UK . If you have 30 or more years of U.S. employment where you paid into Social Security via payroll taxes on “substantial” earnings, your U.K. pension will not affect your U.S. Social Security benefits when you claim it. Social Security’s definition of “substantial” earnings is different each year for 2021 it's $21,550. Generally, if you worked full time in the U.S. and paid into Social Security via payroll taxes for 30 years, the so-called Windfall Elimination Provision (WEP) won’t affect your US Social Security benefits. If you have less than 30 years of substantial U.S. earnings in which you paid into Social Security (in your case 28 years) your U.S. benefit will be reduced due to your U.K. pension. The amount of reduction would depend upon how many years of substantial SS-covered earnings you have, but in no case can the reduction be more than 50% of your U.K. pension. Hope this helps. Remember to always consider speaking to a fiduciary advisor and or tax advisor before making any retirement decisions and If you would like a complimentary one-on-one strategy session to get more specific answers regarding your retirement questions, you can use the link provided (bit.ly/recstrategysession). Again thanks for watching, please share with family, friends and acquaintances, and don't forget to subscribe to our channel to make sure you are notified when we release new videos on other retirement related topics!
Hi and thank you for explaining it much better than any other videos I have watched. I still don't totally get it and I am getting ready to start ssi benefits in the coming months. Is there any way to talk to you over the phone of we were able to set up a time? I would really appreciate it and really appreciate and trust your knowledge on the wep that will affect myself. Thank you in advance
Hi are starting Social Security retirement benefits or Supplemental Security Income?
@@c32ttu I am going to start ss benefits and I am already getting pension now.
Thank you
I just got a letter stating my ssd benefit will be reduced by 476/mo. They say I am receiving a pension based on work not covered by SS taxes. I have no idea what they are referring to. I am not receiving any pension from anywhere else.
Hi Larry thanks for engaging and commenting on this educational video, comments like yours help others who might have the same question. This is a very interesting comment because the Windfall Elimination Provision is only for individuals who both qualify for Social Security benefits and qualify to receive a pension based on work that did not pay into Social Security. If you are not receiving a pension, this is certainly something you will want to speak with your local social security office about. Call (800) 772-1213 to speak with someone. I hope that will help you with this issue. Remember to always consider speaking to a fiduciary advisor and or tax advisor before making any retirement decisions and If you would like a complimentary one-on-one strategy session to get more specific answers regarding your retirement questions, you can use the link provided (bit.ly/recstrategysession) and someone from our office will reach out to you. Again thanks for watching, please share with family, friends and acquaintances, and don't forget to subscribe to our channel to make sure you are notified when we release new videos on other retirement related topics!
I'm a bit unclear about this; did I just read that HR82 has passed? Does that eliminate the WEP?
Currently this bill has only been introduced but not passed.
There is nothing cheerful about any of this. And being a single parent and starting work back when $1.75 an hourcwas actually a wage it’s impossible to reach criteria to avoid being penalized for working hard and trying to save for not having to work til death. Sad day
Hi Sage thanks for watching and engaging in this video. Your frustration is shared by many people out there but there is hope that this provision will itself be eliminated by current proposed legislation (“Equal Treatment of Public Servants Act of 2021”). This has bipartisan support so lets keep our fingers crossed. Don't forget to subscribe, and share this video with others!
@@c32ttu - I hope you have worked through the math and realize that the WEP and GPO make non-SS/SS workers look like the rest of the SS workers. Without WEP, it would be like I can start at the zero income point on the bend-points a second time - you know that does not happen for SS folks. Without GPO, it would be like a widow getting both benefits and you know that does not happen. It is really the Advantaged Treatment of Public Servants Act.
Is WEP applicable if you work with government that pays into FICA? Does that means you get your pension plus 100% Social security?
WEP does not apply if FICA tax is paid on wages. Thanks for watching don't forget to subscribe!
I get SS under WEP , my wife is just starting to collect her full SS she is not collecting under WEP, can I now collect under her SS as a spousal benefit?
@@c32ttu so what you’re saying is don’t even apply
No, you should always apply because you will at least get some benefit under this provision.
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Thanks for the video but I have to tell you that the Substantial Earnings that you’re talking about starting @ 5:54 isn’t exactly correct. This amount varies from year to year and the $26,550 only applies to 2021 and no other years. You can actually do a Google search and find the Substantial Earnings chart, the one I found goes back to 1937.
@scudrunnerS92. First thanks for watching and engaging in this video, comments like yours and others really help us provide valuable education that many find useful. But to address your comment, I have to respond by simply letting you know that when we make certain videos, they are simply to cover a certain topic. This video's main focus was WEP and the effects that it may have on retirement income for those who fall under this provision. It was not to give a historical breakdown of substantial earnings. We clearly point out in the video what the substantial earnings are for 2021 only. So you are correct that substantial earnings for 2021 is $26,550 but we are certainly not incorrect for not elaborating on prior years of substantial earnings as that was not our primary focus of education in this video. Remember to always consider speaking to a fiduciary advisor before making any retirement decisions and Again thanks for watching, please share with family, friends and acquaintances, and don't forget to subscribe to our channel to make sure you are notified when we release new videos on other retirement related topics!
@@c32ttu that’s all really good but the way in which you presented it made it sound like to me that the $26,550 applied for every year. I even went back to the SS website to check and make sure that I hadn’t misinterpreted this in some way. I may have missed something somewhere in your video about this but I did watch it twice. Anyway, you did have me in a slight panic for a few minutes but the emergency was averted once I found the reference on the SS website.
Thanks for your reply!! 🤓🚁💨
To be fair, almost everything in SS is indexed, except the tax trip points. The Max earning, the earning limits, both the bend-points, and, as you state, the substantial earnings are all indexed and move most years. It gets really confusing to explain all this in a short topical video. And it is clearly stated that the number stated is for 2021.
What happens if you work in the USA in the private sector and work outside the USA in the government sector, can you still fall under WEP?
Great question. Your foreign pension will not cause WEP to affect your U.S. Social Security benefit.
My father had his reduced and social security said it’s because he is retired in another country. How can I get more info on this?
@@lasoundwaves Ok with that being the case there must be more to his record. Whether the WEP applies to your foreign pension may depend on:
If the foreign employer withheld U.S. Social Security taxes from your pay or not or
If the foreign employer’s country and the United States have what’s called a totalization agreement. These pacts prevent Americans working abroad, and foreign nationals working in the United States, from having to pay into both countries’ retirement systems on the same income. So this link may help for him to use www.ssa.gov/international/wep_disclaimer.html
@@c32ttu I really don’t understand any of this. But I worry for my Dad because he worked so hard all his life and to have half of his retirement taken away like this, seems unfair. Should I get an attorney on this? Do you guys recommend anyone?
Classic government people wanting to get money they never paid into fully for the required time. Pay into the SS system! Educators just do not get it...Duh
WEP is fair, double-dipping is NOT fair!!!!!!