Over the weekend, I plan on writing a blog about Social Security's Windfall Elimination Provision (WEP) that can affect many teachers if they do not contribute to Social Security. I'll even include some examples. This is important when you are planning your retirement!
February 19, 2009
Social Security's Windfall Elimination Provision
Posted by
Robert (Robby) E. Schultz III, CFP®, ChFC®, CPWA®
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7 comments:
As a teacher who just retired, I enjoyed your article. I did take the pension option (had to buy years to do so, since I was a military wife and taught in 5 states.)
I do hope the WEP is eliminated, as Obama promised. It does hurt many like myself.
Loved my career, but it's great to anticipate a fall without school.
I wish it would be repealed as well, but I would not count on Obama doing so. He cosponsored the bill in the Senate, but it just sat in committee. This unfortunately looks like something that both Democrats and Republicans can say they are working on, but not actually work on it.
You can read the latest thing I wrote on the subject here - Windfall Elimination Repeal - The Congressional PR Two Step.
Good luck, enjoy retirement, and keep reading.
Many of us have been fighting for repeal of these nasty laws for YEARS. Every time the Social Security Fairness Act is filed, we begin anew our campaign for repeal. Unfortunately, through the past several Congresses, we have watched the bill just sit idly in committee for two years at a time...no matter which political party is in charge. The Dems talk about it, get tons of co-sponsors, but never get it out of committee. Rep Doggett of Texas tried to force it out of committee once, to no avail.
TONS OF IRATE TEACHERS ACROSS THE NATION, and such a shame that so many still don't know until they reach retirement. They still think they will get the amount printed on their SS statement.
Thanks for your blog. I plan to follow closely.
Sharon
Texas teacher
Sharon,
Thank you for reading the blog and your comments. It is tragic that so much "lip service" is given to no avail. I would suggest reading my other post on the subject - Windfall Elimination Repeal - The Congressional PR Two Step - that goes into detail about the various promises made by past Congressional sessions.
It is a problem that many educators and others affected by the WEP and GPO do not know that they will be harmed until it is much too late. Hopefully, changes or a full repeal will happen.
Thank you again for your comments, and best of luck to you.
Robby
I have not found anyone to clarify a concern that I have about social security and was wondering if you might be able to help or send me in the right direction.
My colleagues and I work for a private non-profit agency working with persons with development disabilities. We are state and federally funded. We were deemed a “whole owned instrumentality of the State of California” at the time of our incorporation in 1977. Because of this we do not pay into Social Security.
We do not have a pension plan. We have a 403B defined contribution plan, not a defined benefits plan.
The question is simple. Are we affected by the windfall elimination provision?
Some staff think we are not since we do not have a pension. Some think so, since we have not contributed to SSA while employed at here. Many of us worked elsewhere and have enough credits to be eligible for SSA. Our salaries are lower than most actual government employees, so we cannot afford any reduction in our SSA benefits.
Any clarification or assistance on this would be greatly appreciated.
Thanks for reading the blog and your question. I had this exact same question before in an email to me.
ANY retirement account that you contribute to instead of contributing to Social Security will be used in a Windfall Elimination formula (not sure how they determine the annual amount received though).
This is obviously bad news for your co-workers and you.
I had a reader email me about this, and I had hoped the answer was no. He setup an appointment with SS, and they informed him that it could cause a reduction. Even though it is not a "pension," it is something that you contribute to instead of SS. I would encourage your office to discuss the issue further "up the food chain" if possible.
I would suggest one of the older workers make an appointment with SS, and they should discuss it using their information. This could then be passed along to everyone else. The SSA really is a good agency that is usually very helpful.
Sorry I did not have better news. Please keep me informed, and if you find out any new information, please pass it along.
Robby
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