The Best Explanation of the Windfall Elimination Provision

If you have a pension from a job where you did not pay Social Security taxes, your benefit may be reduced by the Windfall Elimination Provision (WEP). How do you know if you’ll be impacted? Don’t expect it to be on your Social Security benefits statement. This may surprise you but your Social Security statement does not reflect any reduction in benefits due to this provision. The Social Security Administration will  wait until you file to tell you how much the reduction is if you qualify for both Social Security and a non covered pension.

 

the windfall elimination provision for teachers, firefighters and police officers

Understanding if a reduction in benefits will apply to you, and how much that will be, does not have to wait until you file for Social Security. You can find out today. It starts by understanding the mechanics of the Windfall Elimination Provision.

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Teachers Retirement and Social Security Survivor Benefits


TRS and social security survivor benefits

Update: I’ve added a video on this topic at the bottom of this article.

Nearly 3,000 rules govern the Social Security programs. There are approximately 110,000 pages on the Social Security websites.

It’s a convoluted mess. The rules are often misapplied and misunderstood. In many cases, even the technicians at the Social Security Administration don’t understand which rules apply in which circumstances. You may be nodding your head in agreement. If you don’t have a horror story of your own, you’ve probably heard one from a friend.

But if you think it’s complex for someone with a traditional job, try making sense of the Social Security rules if you’re a teacher with a teachers retirement pension.

Understanding how teachers retirement and Social Security survivor benefits coordinate is almost unintelligible for the teachers who qualify for a TRS pension from work in one of the 15 states who do not participate in Social Security. It’s not only the teacher’s benefit that gets reduced, often their spousal and survivor benefit will be severely reduced or completely eliminated.

Unfortunately, the survivor benefit reduction/elimination often comes as a surprise when a spouse dies. The culprit? A fairly well-known but poorly understood rule called the Government Pension Offset.

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Will Your Social Security Benefit Increase?

The Effect of Filing for Social Security and Continuing to Work

If you retire and file for Social Security and then later decide to return to work, will your Social Security benefit increase to reflect the taxes you’re paying? Or do all those tax dollars just go down the drain?
the effect of working and paying social security tax after you file for social security benefits

The answer depends on two things:

1) Your earnings history
2) How much you are making now

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Teacher’s Retirement and Social Security (2017 Update)

Teachers and social security benefits

“Can I get teacher’s retirement and Social Security?” That question is asked almost every time I speak on Social Security.

There’s no doubt this can be a complex topic and most of the teachers that I’ve talked to have seen lots of conflicting information.  Let’s clear up the confusion and take a closer look at the rules on teacher’s retirement and Social Security.

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Social Security Claiming Strategies: Who Can Still Use Them?

You’ve may have heard by now that the 2015 Budget Act eliminated many of the advanced Social Security claiming strategies. What you may not have heard is that some people can still use these strategies. But there is a deadline!

deadline for social security claiming strategies

For the next four years, there will be much confusion and misinformation on how and when Social Security filing strategies are still applicable. One key strategy, file and suspend, will mostly go away in 6 months. Another one of the big strategies will remain available for four more years, if you meet the age-based cutoff.

So what’s still available and what’s not? Who can still use these strategies?

There were two strategies that got the ax. The “file and suspend” strategy, and the “restricted application” strategy. Although each strategy is going away, they each have a different deadline.

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How Teacher’s Retirement and Social Security Benefits Work Together

“Is it true that I don’t get my Social Security benefit because I’m a teacher?” I hear that question almost every time I speak on Social Security.

TRS and Social Security

If you’re a teacher, you’ve probably seen lots of conflicting information on this topic. There’s no denying that it’s a complex issue, so here’s a closer look at the rules on teacher’s retirement and Social Security.

In the 1970s and 1980s, laws were passed that amended the Social Security Act in an effort to keep individuals from “double dipping” – receiving both a Social Security benefit and a pension from work where they did not pay into the Social Security system. The results of these amendments are two rules that could impact your ability to claim a full Social Security benefit: The Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).

These provisions reduce benefits for those who worked in a job in which they qualified for a pension and did not have to pay Social Security taxes. This is not limited to teachers, but can also include firefighters, police officers and numerous other state, county and local employees.

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Credit Card Debt

The Enemy of Financial Success

Credit card debt is the enemy of financial success. Not all debt is created equal and there are no set standards as to what is considered too much debt. What is manageable for one may not be for another. If you want to succeed financially, you need to break the cycle of credit card debt.Credit-Card-Debt-300x228

To be fair, credit cards aren’t the problem. Nor am I suggesting that debt is bad. In fact, taking out a loan or using various types of financing is critical to starting or expanding a business. Even buying a home requires debt. What is critical is how we manage it.

Credit is inherently a good thing but racking up the credit card debt can get ugly quick. The first thing we need to do is change how we perceive credit cards. So from now on, instead of calling them credit cards (which sounds so harmless) we should call them ‘debt traps.’ This is similar to calling cigarettes ‘cancer sticks.’ Let’s call these things what they are.

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Budget Bill Kills ‘File and Suspend’ Strategy to Maximize Social Security

Social Security's Windfall Elimination ProvisionWhen it comes to Social Security, most of us hope to get the most we possibly can from our benefits.

Methods for making that happen, however, are a source of heated controversy. “File and suspend” is one advanced claiming strategy that has helped retirement savers at all income levels, especially women, maximize their benefits. But under the new budget deal passed by the Senate on Friday, it will no longer be an option beginning in early 2016.

That could mean as much as $50,000 less in lifetime Social Security benefits for some recipients, according to an article by Laurence Kotlikoff, a professor of economics at Boston University and staunch proponent of “file and suspend.”

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