I worked as a Civil Servant (CSRS) and didn't pay into SS Retirement and so have WEP applied to my SS retirement. I do have 40 quarter earned earlier. My wife worked for the St. of CA in the UC/Davis Medical Center in Sacramento and didn't pay into SS Retirement and so has WEP applied to her SS retirement. She also has her 40 quarters earned separately. My SS retirement check even with WEP applied is over double my wife's SS retirement check with WEP applied.
I thought she could get an alternative SS Retirement of 1/2 my SS retirement. However SSA's calculation of her 1/2 of mine makes a second WEP reduction. Is this right? When calculating her possible 1/2 benefit, I would think it would be either 1) my 1/2 benefit w/o WEP reduced by her WEP or 2) 1/2 my benefit w/ WEP. Surely not 1/2 my benefit w/WEP with a second WEP reduction for her. Does any one have knowledge or experience with this?
WEP reduces your SS retirement benefit to about 40/90ths of what you would get otherwise. WEP stands for Windfall Elimination Provision.
Thanks for the clarification. With your method of calculating where the -2/3 of “pension” is -2/3 of the lower earner’s SS/WEP benefit taken from the “Comparison” figure, then based on my calculations, it will always work out that if the higher earner’s SS/WEP benefit is 5.333 times, or higher, of the lower earner’s SS/WEP benefit then it will be beneficial to take the spousal SS/GPO benefit.
However in rereading the GPO sheet at Social Security Publ # EN-05-10007: 2020 - Government Pension Offset I think the -2/3 of “pension” means the government pension, that is the lower earner’s civil service pension, not lower earner’s SS/WEP benefit. Also this is subtracted from the Lower earner’s SS/WEP benefit not from the Comparison subtracted figure, per their example. Maybe I’m just reading this SSA Pub. incorrectly. Please reread this SSA Pub with me and correct my probably confused understanding of it. Yikes, I don’t want to sound argumentative, but I do want to be sure I’m understanding this correctly. Thanks for the help.
If you will be eligible for a Social Security retirement benefit based on your own earnings:
As well as a higher benefit based on your spouse's earnings, it will also affect your benefits as a spouse, widow, or widower.
To get a more accurate estimate of how the government pension you will receive for work not covered by Social Security will affect the part of your benefit based on your spouse's work:
1. Enter the estimated "gross" monthly amount of the government pension (in today's dollars) you will receive for work not covered by Social Security in Step #1 of "Calculate Your Benefits.
2.Use your most recent estimate to determine your estimated retirement benefit based on your own earnings.
3. Subtract the estimated amount of your retirement benefit from the estimated amount of your spouse's, widow's, or widower's benefit before GPO. Enter that amount in Step #2 of "Calculate Your Benefits" and select "Compute."
4. The amount in #3 of "Calculate Your Benefits" is your estimated spouse's, widow's, or widower's benefit after GPO is applied. Add that figure to the estimated amount of your retirement benefit to find your total estimated monthly benefit. (MISSED THE PART IN RED)
So her Spousal Benefit including the GPO, in the example we are speaking about, is $175.00 (Her own benefit of $ 150 per month + the calculated GPO Spousal benefit amount of $ 25.00). Social Security blends the (2) to give the Spousal benefit of $ 175.
Hopefully we are on the same page now. Right?
I am not perfect and my brain sometimes gets rather full with "STUFF"
More accurate figures would help because NOBODY makes that amount from Social Security -
The maximum monthly Social Security benefit that an individual can receive per month in 2020 is $3,790 for someone who files at age 70. For someone at full retirement age, the maximum amount is $3,011, and for someone aged 62, the maximum amount is $2,265.
And this is without ANY WEP calculation reduction.
CAME BACK TO EDIT:
Seems those are annual (?) figures rather than monthly - MY BAD !
. . . . My SS retirement check even with WEP applied is over double my wife's SS retirement check with WEP applied. I thought she could get an alternative SS Retirement of 1/2 my SS retirement. However SSA's calculation of her 1/2 of mine makes a second WEP reduction. Is this right?. . . .
You seem to be understanding the basics of the WEP somewhat.
Yes, the Spousal computation seems right but it is NOT a 2nd WEP reduction, it is your wife's, as a Spousal Benefit filer, deduction for a "Government Pension Offset". (described below)
Based on the info which you have given about the careers of each of you, it sounds like your wife has this other issue affecting her Spousal benefit than just the WEP modification affecting your benefit amount and thus her benefit as a spouse.
She also has a GPO (Government Pension Offset) modification affecting the her spousal benefit.
The Government Pension Offset (GPO), reduces Social Security benefits paid to spouses or survivors when the spouse or survivor earns a pension from a government job that was not covered by Social Security. The GPO reduction is equal to two-thirds of the amount of the pension payment from noncovered government work.
If she files for a Spousal Benefit based on your work record - her base benefit would be 1/2 of your benefit (after YOUR appropriate WEP is applied to your benefit). Then her Spousal Benefit computation is further reduced by her GPO (Government Pension Offset).
If each of you apply for your own benefits based on your own work record, each of these benefit calculations would be modified by the WEP, respectively, using the computation of each of you individually. As a Spousal benefit filer, her Spousal benefit is not reduced by her own WEP but it is reduced by her own GPO.
So based on the work history of each of you - you are both gonna have a modified calculation either based on the WEP, if filing individually for your own benefit OR one of you will have the WEP modified calculation and if the other files for Spousal benefits, the GPO will come into play for that individual.
How the computations are basically figured in this complicated matter:
If both a husband and wife worked in a noncovered job with a pension, and both also gained entitlement to Social Security benefits from covered employment.
For each spouse, own-earnings benefits are first adjusted by the WEP.
The wife's top-up to the spouse benefit based on her husband's earnings in covered employment starts with one-half of his WEP-adjusted benefit,
from which her own benefits are subtracted (to tell which benefit is greater); then, two-thirds of the pension from her own noncovered work is subtracted from the remainder (GPO)
Keep this in mind for financial planning down the road (based on current law) - the survivor might want to get a refigure -
Because when she/he is widowed,
the top-up to the survivor benefit starts with the deceased's full benefit (NOT adjusted for the WEP),
minus the survivors own-work benefits,(to tell which benefit is greater)
with two-thirds of the pension from the survivors own noncovered work subtracted from the remainder.(GPO)
Hope this answers your question. If not, ask more - I will do my best to answer.