How To Avoid Windfall Elimination On Retirement

Knowing how to avoid a Windfall Elimination Provision (WEP) can prove to be difficult at times since the federal government has instilled this law for government employees who eventually try to collect from Social Security. Government pensions typically cover state or local government employees since they do not have Social Security from their paychecks like others do. Windfall Elimination Provision greatly reduces the Social Security benefits one person can claim since they have a government pension from their previous employment. Windfall Elimination Provision uses a reduced formula of your Social Security in order to determine how much you collects upon retirement, which is about 50 percent. Yet, there are certain exemptions where you can avoid Windfall Elimination Provision to your retirement earnings from Social Security. Here are some cases to avoid Windfall Elimination Provision:

  1. Work 30 or more years under the coverage of Social Security even though you may have briefly worked under a state or local government job.
  2. Earn 21 to 29 substantial earnings help to avoid a the reduction from the Windfall Elimination Provision.
  3. Forfeit your government pension by withdrawing your contributions from the state or local government job once in order to avoid the Windfall Elimination Provision.
  4. Serving in the military reserve excludes a person from the Windfall Elimination Provision as mandated by Congress.

Note: Windfall Elimination Provision does not prevent anyone from collecting Social Security retirement benefits, only reduces the amount for those who have worked in the sector where Social Security does not cover such as state or local government jobs. Windfall Elimination Provision does not affect surviving spouses or children when a person dies even though the deceased is normally effected by the law alive.

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