Help! They're trying to cut my Social Security
Social Security is a simple concept, but the execution can be complicated. One example is the Windfall Elimination Provision. Does it apply to you?
This post comes from Stacy Johnson at partner site Money Talks News.
What is with the "Windfall Elimination Provision?" We have an appointment with the Social Security office in our area and they want bank statements, assets and more. Do they have the right to ask for this information? My husband is 66 and has been receiving Social Security since age 62. We needed the money to live on. Now Social Security says they overpaid him … confused. Thanks. -- Joyce
Here's your answer, Joyce.
What's the Windfall Elimination Provision?
The Windfall Elimination Provision is complicated in execution, but simple in theory: It's supposed to prevent Social Security recipients from "double dipping" -- getting a full pension from both Social Security and an employer that didn’t participate in Social Security, like a government agency or non-U.S. employer. WEP eliminates this "windfall" by reducing your Social Security payments. You can read more about it in this publication (.pdf file).
If you worked your entire career in jobs subject to Social Security withholding, you can stop reading. WEP won't apply to you. It also won't apply if you were a federal worker hired after Dec. 31, 1983, or if you paid into Social Security for 30 years and had "substantial" income.
What they deem "substantial" changes yearly. You can see the amount for every year in the PDF publication mentioned above. For example, in 1955 it was $1,050. For 2013 it was $21,075.
There are other exceptions to WEP. If you think you might be subject to it, visit the link above to read them all.
If WEP does apply to you, it will reduce your monthly Social Security payments. There's a chart on this page of the Social Security website explaining how much, but the maximum possible reduction for 2013 is $395.50 per month.
Because Joyce didn't provide details about her husband's former employers and earnings, I can't say if her husband is subject to WEP. As for whether the government can request information about "bank statements, assets and more," probably. Agencies like the IRS do it routinely.
Good luck with your upcoming appointment, Joyce. Let me know what happens.
Now let's move on with some additional advice for those readers still working.
How to get more Social Security
Here are a few important tips:
1. Work at least 35 years
2. Ask for a raise
If you experience a jump in salary, you'll likely boost your future earning potential and may see an increase in your Social Security payments down the road, because, as we just explained, Social Security takes into account the 35 top-earning years of your career. Can't get a raise? Take a second job to earn more.
3. Wait until full retirement age to claim Social Security
You can begin collecting Social Security benefits as early as age 62, but you might not want to: Your benefit will be reduced by 25% for life. To get your full payment, wait until you reach full retirement age -- currently 66 for anyone born between 1943 and 1954. For those born between 1955 and 1959, the age gradually rises toward 67. For those born in 1960, it's 67.
4. Better yet, wait until age 70
If you can afford to wait until age 70 to claim Social Security benefits, it'll pay off. Thanks to what the Social Security Administration calls "delayed retirement credits," benefits increase 8% each year you delay tapping into Social Security -- up till age 70. So waiting until you reach 70 means about a third more income for life.
When considering this strategy, it's particularly beneficial for the higher-earning spouse in a marriage to hold out until age 70 to increase the total benefits the couple will receive throughout their lifetime. In the event that the spouse with the higher benefit passes away, the surviving spouse will receive the higher payment.
If you took benefits early and regret the move, it might not be too late to fix it. You may be able to repay all the benefits you received so far and restart them at a higher level based on your age. But this policy isn't as flexible as it used to be. For more details, check out this page on the SSA site.
5. Do your due diligence
Always read your Social Security statements (either received as paper statements in the mail or online at SocialSecurity.gov/MyStatement) to be sure everything has been reported correctly. Although inaccuracies are uncommon, some scenarios lend themselves to a greater chance of error -- such as a name change your employer failed to update on company records.
6. Clear your debts
Your Social Security benefits are protected from most debt collections, but they can be taken to collect unpaid federal taxes, federal student loan balances, and child support or alimony. Clearing these debts will leave your Social Security benefits untouched.
More on Money Talks News:
- 13 ways to get more Social Security
- 12 weird ways retirees make money
|Tags:||MoneyTalks Newsretirement planretirement planningretirement savingsSocial SecurityStacy Johnson|
VIDEO ON MSN MONEY
That advice to wait until you are 70 is BS.
What if you die at 72,the Govt. pockets the rest,unless you have a spouse that continues
to draw on you.
Better advice is to start at 62 and get a part time job(you can earn over $13000 without penalty.)
That way you can enjoy your so called golden years and not work until you drop.
According to the people who write these articles...Just wait till you DIE to
collect.The money You Paid into Your SS Fund..
Started drawing mine at 62 and glad I did..! Your mileage may vary...!
I have lost trust in our Government..They only want to line their Own pockets with money.
Could be they may run out of YOUR Money by age 70...Watchya Think...lol
They need to eliminate the SS cap for income tax deductions. Those who earn over 110,000/yr. need to be taxed on the whole amount for SS.
THEN, the government needs to keep their greedy little hands off of OUR money. SS is NOT and entitlement and if you have worked and contributed you should not be allowed to draw on it.
Those who against privatizing it need to look at what the government has done to our trust fund.They have raided it for every little project and foreign country they decide needs money. Make it a law that that tax goes directly to an IRA, 401K, or some other retirement account and cannot be touched until retirement or some life circumstance that takes you out of the workplace. This will never happen because the politicians couldn't buy votes by giving away our money to illegals and any other person who didn't earn it.
This wait until you are 70, to file for SS, is just the "politically correct" for the time tested:
THE CHECK IS IN THE MAIL
Secretly they hold their fingers crossed hopping that you kick the bucket, before you reach that birthday. Wait a few years and they'll be asking you to wait until you are 100 -- translates to: just pay the FICA and shut up-- anyway, only about 7% of the population reaches the age 70 -- after that age, you "better" have a very good health insurance policy. Just plain Medicare will not do. Most major surgery and transplants require a advance deposit of at least $100K to $250K
Ironically, most of the "money" that was spent of "research" for these advanced medical procedure actually came from TAXES from "people" that will never be able to afford anyway---if a heart transplant cost an average of $500K plus and maybe 5 years of additional life expectancy (providing you can afford the anti rejection medications --- That equates to $100K ,plus 100K in meds, for each extra year, if you are lucky-- I personally would check in to a "Nevada Ranch" and pay $10K for the ride of my life--Much, like in Soylent Green (Edward G. Robinson, final film).-- and leave the extra $1M to my kids to waste and enjoy!.....Money much better spent than paying for the Surgeons misters and her Porcha that may give you 365 more days to live...
Well I already know that your speaking out your **** DAM MORON!
I Joined the US ARMY in 1973 and have paid Social Security TAX form DAY 1 and at the time was only getting paid $360.00 a month.
After finishing 22 years I get a PENSION AND CAN DRAW SOCIAL SECURITY! THAT'S ACCORDING TO SOCIAL OFFICE!
NOT every Government job is Social Security tax free almost all have paid taxes for a long time now!
There are jobs that do not take taxes out , they leave that up to you to pay and if you choose not to pay YOU DO NOT GET ANYTHING!
they won't let you draw a pension from a federal job AND your full social security. however, you can draw a full pension from a private sector job and still get 100% of your social security payment. good to know.
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