True. But in the case where a person is subject to the WEP, they didn’t pay Social Security.
No. Everyone’s contributions are diminished the more they work and earn. That’s the way the system is designed.
Social Security should never have been or should be looked at as an investment. It was never the intention.
And even if was, you’d have to compare it to something with equivalent benefits. Your 401k doesn’t pay based on you becoming disabled. It doesn’t pay survivor benefits. It doesn’t pay a death benefit (and yes, I know this SS benefit is very small). Social Security just isn’t comparable to your 401k or any other investment vehicle.
Thank you billnin. I should have used the word “contribution” instead of “investment”. Their contributions are being unfairly denied.
Ha ha ha. Nice try! I’m not the one pushing for a change in the law.
Another good joke! No one dutifully contributes to Social Security. There is no choice in the matter.
You’re begging the question here. You’ve assumed without proof that the WEP provisions are unfair (whatever that term means). If you’re looking for an example of how people are treated differently, see my prior post about the two hypothetical participants who pay the same amount of Social Security taxes over 10 years or 35 years. The one who pays over 10 years and then works at a non-SS job with a pension for 25 years gets a pension in addition to SS. Without the WEP, that person is treated as the low-income worker, and gets a larger benefit as a percentage of SS taxes paid. Since that person isn’t a low-income worker, and gets other income in addition to Social Security, that seems like a reasonable arrangement to me. I’d love to hear your argument for why you think that person should be paid Social Security in an amount that assumes they earned only a low income for 35 years.
As you probably know, low-income workers have a much larger portion of their income “replaced” by Social Security than higher-income workers. I’d have to look up the numbers and maybe do some calculations I don’t care to do right now, but as I recall it’s something like 90% for very low income and decreases to around 30% for high-income earners.
What young adult thinks about social security or retirement? Very few. My point is that she is penalized far more than would be someone with a lower social security benefit, which is basically the deceased’s benefit minus one’s own. Versus the deceased’s minus 2x one’s own. Yes she has to pinch pennies very much more than she should have to…not sure how much if any it might have changed her choice to be a special ed teacher…we have another friend…her friend since early childhood, mine since she introduced us in college who taught in a different state, and will receive social security. The WEP and GPO penalties should not be for low to average wage earners, but if at all, only for high wage earners.
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Where you are wrong is that most teachers have other jobs that do pay into SS, either before, after, or during their teaching career. My own contributions were forfeited when I retired. If a teacher collects SS, it is moderated in amount because of the pension that each and every one of us had SUBTRACTED FROM OUR PAY MONTHLY by the retirement association/ school district without a choice. This is in addition to the cruddy high cost 403b plan I can contribute to instead of a 401k that is available to most other workers. It seems like you have a grudge against teachers.
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Please do explain how I’m wrong.
No, they were forfeited as soon as the Social Security taxes (they aren’t “contributions”) were taken out of your check, just like mine are. There’s nothing either of us can do about that. It’s the way the system was designed.
OK, now you’re just making things up.
The subtraction is due to the fact that you are covered by a pension that was funded with money that would otherwise have gone into Social Security. Had it gone into Social Security instead, you’d get more Social Security, but you wouldn’t get the pension. You’d probably get less in that case than you would with your pension.
I realize it’s frustrating to have no choice in whether to fund your pension or not. I feel the exact same way about Social Security. My wife has to pay for the state employee pension AND Social Security (but on the bright side, at least the WEP won’t apply to her). She does have access to the cruddy 403b plan, but we were able to find one that offers Vanguard funds at reasonable cost (Aspire, if that’s an option for you).
The solution here is to petition your state to have your teacher’s salary subject to Social Security taxes, rather than or in addition to requiring you to fund the pension. Then the WEP wouldn’t apply.
She’s penalized as much as she would be if she had worked at a SS-covered job her entire career and made the same amount of money. Then she’d have a higher SS benefit (rather than a pension), and would not get as much or anything from the survivor benefit.
The survivor benefit is meant to provide for people who were non-working spouses or low-wage part-time workers of higher-earning spouses. Without it, a stay-at-home mother whose husband died would get nothing. It makes sense that the survivor benefit wouldn’t be as much for a person who had their own reasonably well-paying career, who has their own Social Security or alternate pension. You might say that being a teacher doesn’t pay much, and I won’t argue with that, but it pays a lot more than part-time retail work, or other similar jobs a mother might take on occasion or at night simply to make ends meet when her husband’s check isn’t quite enough. My wife was an aide in the school when our kids were all in school, which paid a few dollars more than minimum wage–not a bad job for someone who wants the same schedule as the kids. She recently got her teaching license, and her pay increased by a factor of three.
I think the main problem is that too may people look at SS as a retirement/investment/benefit program and shouldn’t be. Even looking at the WEP reference I provided above the SSA itself refers to SS as a tax.
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Thank you ratbert2k.
We agree to disagree.
Who is your representative so that I can write them in opposition to your flawed arguments?
Correction: You agree to disagree. You haven’t even told me which part of my analysis you think is wrong, so how can I either agree or disagree with you?
I’m happy to be persuaded if I’m wrong (and I could be). And no, I’m not telling you who my rep is. I guess you can try to narrow it down based on the details in the letter if it matters that much to you. But a letter telling my rep I’m wrong with anything like what you’ve provided here isn’t likely to be persuasive anyway.
Thank you ratbert2k.
I respect your right to disagree that we agree to disagree.
Perhaps your Rep will be persuaded by the many other Reps who understand the unfairness and already support the law change.
No. She cannot collect on the social security that she DID pay into, or the survivor benefit that her husband earned. The offset is significantly higher.
I just don’t understand why you think it’s unfair. Perhaps if you would explain, I would agree with you.
Had she worked at a SS-covered job, she’d be collecting her own Social Security in an amount comparable to (but probably less than) her pension. With that level of her own Social Security benefit, she’d get no survivor benefit based on her husband’s earnings–exactly the same situation she’s in now. Would you think that’s unfair? What about if she had died before age 62? She and her heirs can’t collect then either. If you want to talk about unfair, maybe we should start there.
I think the problem here is how you are framing the issue: “She cannot collect on the social security that she DID pay into.” Social Security taxes are just taxes. There’s no vested right or interest in any future benefit. Never has been. There are people who pay the taxes, and there are people who qualify for Social Security benefits. The groups are not the same.
One pays into Social Security via FICA taxes. One receives Social Security insurance benefits if one meets specific qualifications.
For retirement benefits, you must have paid FICA taxes for 40 quarters (approximately 20 years). You must be at least 62 years old. Along with earning a retirement benefits if you meet the qualifications, you also earn spousal benefits for your spouse, survivor benefits for spouse and minor children, and disability benefits if you become disabled before attaining age 62. For disability benefits, you may need fewer quarters depending on how young you are when you become disabled.
A spouse or widow/widower does not get the benefit in addition to their own earned benefit, but there is an even tradeoff that amounts to the higher amount (deceased’s amt - widow’s retirement amt = widow’s survivor benefit, which added to her or his retirement amount is the same as the deceased’s higher amount). A similar calculation is used with spousal benefits, except that it based upon half of the workers earned retirement benefits.