Windfall Elimination Provision – Explained!


I get a lot of questions about the Windfall Elimination Provision (WEP), what is it, and how it may affect retirees.

First off, please understand, if you have 30 years of Substantial Earnings the WEP doesn’t affect you. THe WEP only affects people who have less than 30 years of substantial earnings and did not pay into the Social Security systems for some of those years.

Maybe they were a teacher in Texas and worked in a district that didn’t pay into the Social Security system. The WEP could affect them.

How much? According to the SSA.gov website the max reduction in benefit is $447 a month. That is a lot of money, don’t get me wrong. But it won’t eliminate the vast majority of retirees Social Security benefits. (The GPO could do that though. We’ll talk about GPO in a different video).

But to have that amount of reduction in your benefit means you need to be eligible to receive SS this year have 20 or less years of substantial earnings.

BUT, and this IS big, for each year you work with Substantial Earnings, you can reduce some of your WEP reduction, if that makes sense. And Substantial Earnings for 2019 are less than $25k.

So, if you find you’re subject to WEP and want that to change, go get a job, something you like, doesn’t have to pay much, around $11 an hour or so and that salary will get you enough substantial earnings that you will INCREASE your Social Security benefit by reducing your WEP.

Hope that makes sense!

https://www.ssa.gov/pubs/EN-05-10045.pdf
https://www.ssa.gov/planners/retire/wep-chart.html
https://www.ssa.gov/planners/retire/anyPiaWepjs04.html

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