the wep effect

THE WEP EFFECT

it was about 10 years ago or so when my rainwater brother who is a certified financial planner asked me
do you know about the wep effect on your retirement
whats wep
to me it sounded like some depression program or something like when they provided jobs for folks during the depression
no he chuckled
its about the adjustment to your social security when you retire if you are a  school teacher or fireman or policeman or state or city or federal employee
oh i said that doesnt seem right
but
she has paid into social security since she was 16 years old
doesent matter he said
she will have to do the windfall elimination provision calculation when she retires to decide how much social security she will get
or
should i say does not get

wait i said but she paid in for years and i have more than paid my share into the system
i thought she could take her social security or half of mine when she turned 65
well
if she wasnt a school teacher she could
it doesnt matter she wont get her share of what you and she paid in

well
that doesnt seem fair
thank reagan and congress from the 80s then
well i said hes gone and most of them are gone
well
he said
im sorry but your are stuck with the wep or the windfall elimination effect

you probably need to be prepare for it

now my wife she worked and paid social security through high school through college through my medical school through through my residency and then some through my early practice
then
she took off about 10 years to be a mother
then
in her late 40s she got her teacher certification to teach
a job she loved and probably wished she had done right out of college

about the time she started teaching is when my brother told me about the evil wep provision

he said
the way you offset that is to put more money into her 403b each month to compensate for the loss of social security that you and her paid into for years
so
we did that
enough to compensate some for the loss of all that social security when she retires

most teachers either dont know about this or should i say dont understand it or they cant afford to make the 403b investments

so
now this year she gets to start receiving about 40% of her social security that she should be receiving

now
if she wasnt a school teacher she would be getting from me around $15,000
but since she is a school teacher using the wep calculaiton she can only get $1,000 a year
so
she looks at her social security which like many of you she has paid into for several years
she would get around $10,000 a year based on her work history
but
because of the wep calculation she will get only $5,000 a year of social security

a net loss of $10,000 for us and a net gain for the social security fund of $10,000

it seems the fund is gaming money off the backs of teachers and state and city and federal employees

it should be fixed

we arent asking for something that we didnt pay for since like most of you we paid our social security taxes into the fund
we just want like you do to receive what others with the same social security work history get each year

now
when i die instead of getting around $30,000 a year from my social security she will only get $16.000 a year

most teachers who start early in teaching and who work for a district that doesnt pay into social security may not ever get any social security checks ever
had my wife she not taught school part time for several years  she would be getting zero social security

when many of these teachers retire and when their spouse dies
they get zero nada zappo nothing

somehow this doesnt really seem fair to me

i also must add in the state of texas there is no cost of living adjustment
what you get when you retire is what you get 20 years later

now
we are able to withstand this hit
but
many teachers cant

only congress can fix this
but
so far they havent fixed anything up there for years
no matter who is in charge

the organicgreen doctor