Ask Larry

If I Work Post-Retirement Will That Change The Way WEP Is Applied?

Hello Larry, I am currently collecting a small municipal pension and am eligible to retire and collect a state pension soon. According to I will be entitled to 850 a month at full retirement age which I understand will be diminished by the Windfall Elimination Provision. If I work post retirement and before collecting SS will that change the way the WEP is applied? Thank you, Eric

Hi Eric. The only way that additional work for earnings that are subject to Social Security taxes could affect the way the Windfall Elimination Provision (WEP) is applied would be if you have between 20 and 30 years of coverage (YOC). To count as a YOC, you must earn a minimal yearly amount which is adjusted annually. For a list of the yearly amounts needed to be counted as a YOC refer to page 2 of the following Social Security publication:

If you have more than 29 YOCs you are exempt from any benefit reduction from the WEP. If you have between 21 and to 29 YOCs the amount that WEP reduces your Social Security benefit rate could be mitigated. But, any number of YOCs below 21 won't help you reduce any WEP reduction that applies to your benefit rate.

However, Social Security retirement benefits are based on an average of a person's highest 35 years of Social Security covered wage-indexed earnings. So, additional years of Social Security covered earnings could increase your benefit rate they're higher than one or more of your current 35 highest years of Social Security earnings. If you have fewer than 35 years of Social Security covered earnings, then additional earnings would be replacing zero earnings years that would otherwise be used in calculating your benefit rate.

Our software ( could help you determine how much that additional earnings would increase your benefit rate. The software is also programmed to handle benefit calculations involving WEP, so you should strongly consider using the software to fully analyze the options available to you in order to determine your best strategy for maximizing your benefits.

Best, Jerry

Jul 8 2021 - 12:21pm
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