Ask Terry Questions Soc. Security lost because of “offset”

Soc. Security lost because of “offset”

By Terry Savage on January 03, 2019 | Wild Card

I heard you talk many times about waiting until age 70 to file for Social Security benefits . My wife and I just filed at age 70 years old. She was a teacher for 25 plus years and I was a Chicago Police Officer for 36 years. We believe in you and others for the correct information by waiting. We were told by the Social Security representative that we were wrong in waiting until we were 70 years old. We should have taken it at age 62. She stated that we would have gotten less money at age 62 but in the long run, we would have come out better later on. She stated that as our pension increased and COLA benefits, that would have offset the 8% “reward” for waiting until age 70 to file. We lost money for retirement for waiting!

She was also the only person to tell us that the Government Offset / Windfall Elimination Provision by that no good Dan Rostenkowski is hurtful and penalized Pensioners! Because of it, my wife was supposed to get over $300 dollars monthly in benefits. Shocking and sad after working so long ! She will now get just $35 dollars. I was to get over $1200 dollars but because of the Provision, I will receive just over $500 dollars. monthly. PENALIZED is exactly the word to use here!! The Government took 100% of their end ( Gross ) out of our paychecks knowing full well that they were only giving us back about 43%. Sounds like FRAUD to me!
As it pertains to the time to file for Social Security benefits, who is correct… You or the Representative? Also, do you think that this damaging, hurtful Offset Provision will ever be repealed or reversed?
I enjoy listening to your shows and your information!! Take care… Continued success! 🙂

Terry Says

OK, there are TWO COMPLETELY SEPARATE ISSUES in your post, and I will deal with them one at a time.

First, the SS rep who told you that you had “missed out” was WRONG!  The only way she could have been “right” is if you had died before taking your benefits now!   The delay gave you an approximately 8 percent increase for EVERY YEAR you waited to take SS. (And  you couldn’t get that in the bank for the past 8 years!) And if you had taken it EARLY, then if you were still working you would have owed a penalty on your other earnings.  For the year 2018, this limit on earned income is $17,040 ($1,420 per month). The amount goes up each year. If you are collecting Social Security retirement benefits before full retirement age, your benefits are reduced by $1 for every $2 you earn over the limit.  That worker should be fired — or educated!

BOTTOM LINE:  You were correct to wait as long as possible.  Your SS benefit is based on your most recent earning years, so since most people earn more later in life, you are likely to get a larger base check by delaying.   That higher check you receive for waiting is also the higher BASE upon which future COLAs are calculated, so you are a double winner for waiting.

Second — I’m so sorry that no one ever told you about the “offset” for people receiving pensions from government jobs.  It applies to the worker’s benefit– and to a spouse collecting on the worker’s benefits.  And the offset is not reflected in your “SS Statement of Earnings.”  But if you had discussed retirement with a financial planner, this would have come as no surprise.

It’s why I suggest everyone visit account and get an individualized illustration based on your own situation and earnings of exactly what you will receive in SS benefits.  Here is a link to that page on the SS website where you can set up your account securely.

Your reference to House Speaker Dan Rostenkowski dates back to 1983, when the Windfall Elimination Provision was enacted to prevent so-called “double-dipping on pensions and SS.  To be affected by the WEP, an individual must have worked in covered employment long enough to qualify for Social Security benefits, as well as in the public sector where FICA payroll taxes were not deducted from their earnings. In addition, they must have earned a pension from that non-covered work.




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