Q: I have been receiving Social Security benefits since turning 65 in 2003. I had to take another job and the company I am working for does not take Social Security from my pay. I have been employed for seven years. I am thinking about retiring from this position and when I do, I will receive a pension from state of California of about $600 per month. I have less than 20 years paid into Social Security. I had interview with Social Security representative, and she calculated my Social Security once I receive pension from California will be reduced by $360.
I thought there was a maximum that Social Security could deduct from my current Social Security benefits. I have spent one hour with a representative, and she knew nothing about a minimum even the Social Security website states in a table there is a maximum. A difference of $100 is a lot. Can you tell me how I go about getting an answer to this question?
A: Because you will be receiving a pension from a retirement system where you didn’t pay Social Security taxes, you’ll be subject to the windfall elimination provision. The WEP reduces the Social Security benefit of someone like you who has fewer than 30 years of substantial earnings under Social Security. According to the Social Security Administration, “the reduction in your Social Security benefit cannot be more than one-half of the amount of your pension that is based on earnings after 1956 on which you didn’t pay Social Security taxes.” You can see what those maximum reductions are for each year by going to http://ssa.gov/retire2/wep-chart.htm#table.