A digest of timely information and insight about finance, investing, and retirement.
Rep. Kevin Brady: It’s Time to Fix the WEP | Teach the Vote
In a recent editorial, U.S. Rep. Kevin Brady wrote about the inherent unfairness of the Windfall Elimination Provision or “WEP.” “It’s unfair to public servants in Texas and across the nation, including places like California, Massachusetts and Ohio,” Brady said. “I’ve been working to repeal and replace the WEP for a decade. This is something we must do for our teachers, firefighters, police, and other public servants. You probably know the history: When Social Security was created in 1935, state and local governments were excluded from participating due to Constitutional concerns. Later, the law changed to allow state and local governments to offer Social Security to their employees. I think we can all agree that our teachers, police, and firefighters deserve better,” Brady added.
Legislation to combat elder financial abuse advances in Senate | InvestmentNews
Legislation that would give financial advisers civil liability protection when reporting suspected financial abuse of seniors advanced in the U.S. Senate on Tuesday. The Senior Safe Act was approved by the Senate Banking Committee as part of a larger bill that would reform regulation of credit unions, community banks, and small regional banks. The Senate action follows approval of a companion elder-abuse bill by the House Financial Services Committee in October.
What’s the largest Social Security retirement check someone can get? | The Washington Post
Looking at your Social Security statement regularly should be a key part of your retirement planning. This means not just waiting until a few years before you retire to check what’s on your benefit. Retirement planning should begin the day you start working full-time. Knowing how much you can expect from Social Security (assuming there aren’t major changes by the time you do retire) should be part of determining how much you need to save and invest for retirement.
Retirees found some expenses in retirement higher than expected | PLANSPONSOR
In a survey of Baby Boomers, Capital Group found that, among those who are retired, 60 percent say that life post-employment is better than they had anticipated. Thirty percent say it meets their expectations, and 10 percent say it is worse than they expected, with many in this group blaming finances or health. Others point to lifestyle issues, such as boredom, loneliness, or the fact they miss work. However, despite many saying retirement is surprisingly better, Boomers face a myriad of costs that are surprisingly higher, starting with those for health care; 43 percent of Boomers say health care costs are higher than anticipated. Other unexpectedly high expenses are: travel (40 percent), taxes (34 percent), food (25 percent) and utilities (23 percent). By comparison, only 11 percent of retired Boomers say they spend more than they had hoped to to support dependents, a mere 9 percent say credit card debt is a problem, and only 9 percent say housing costs exceed those anticipated.
Supporting adult children could cost you $227K in retirement | Forbes
If you’re not careful, lending your adult children a financial hand can have significant consequences later on. It could cost you as much as a quarter of a million dollars out of your retirement nest egg, new research has found. Some 80 percent of parents of children 18 and older are covering, or have covered, at least a portion of their adult child’s expenses, according to a recent survey from NerdWallet. That includes helping pay for groceries (56 percent), health insurance (40 percent), rent or housing (21 percent), cell phone bills (39 percent) and car insurance (34 percent). However, if parents took the money they were spending on their children and put it toward retirement, they’d have about $227,000 more to tide them over, the report says.
How digital tools and behavioral economics will save retirement | Harvard Business Review
In Shlomo Benartzi’s work as a behavioral economist, he’s thought a lot about how nudges can drive lasting behavior change. In the domain of retirement savings, he and Nobel laureate Richard Thaler devised a program called Save More Tomorrow back in the mid-1990s that used nudges to help people make better decisions about their long-term financial future. That program invites employees to gradually increase their savings rate over time, and it has been a success: according to Mr. Benartzi’s latest estimates, it has boosted the savings rates of as many as 15 million Americans. Read more about Behavioral Economics in this week’s PERA on the Issues article, “Nobel Prize puts spotlight on behavioral economics, retirement plan policy.”
Windfall elimination provisionA provision of federal law that may reduce Social Security benefit payments to retirees who receive a pension based on work during which they did not contribute to Social Security. The WEP does not apply to those with 30 or more years of substantial earnings in Social Security.
After my husband passed away in 1990 after being a cancer patient for 5 years, I was shocked and terribly disappointed to learn from Social Security that after he had paid into S.S. all of his life, I was not eligible to receive my share of his benefit because I worked for the U of C and was in the PERA pension program because of WEP. It has never made any sense to me that his Social Security benefits were not separate from my retirement benefits! My loss has probably been approximately $12,000 per year which would have been a wonderful asset. Why should the contributions he made to S.S. have anything to do with my retirement benefit? I can understand why I would not be eligible for S.S. during the 31 years I worked at C.U., I understood that policy since we did not contribute to S.S. – only PERA. I have always been grateful for the PERA Plan, however, I have always cheated1
What are the statistics on how many have lost portions of their benefits due to the WEP and the loss of two thirds on one’s soc. sec. if they are receiving another benefit? These are most unjust situations.
I’d like to extend my condolences to Gregg’s wife and sons. He was an outstanding guide in the PERA wilderness and always handled situations with his his heart as well as his head.
Thanks Greg! You’ll be missed!
The windfall elimination provision is very unfair. I earned my four quarters before I entered the PERA program and Social Security was able to invest that money, make money on those investments and then keep all but the small amount I now receive after having to forfeit 2/3rds of the SS account upon retirement. Were anything ever to be accomplished in reversing the windfall provision, would current retirees ever benefit?
Thanks for speaking up on behave of all the PERA employees on the WEP I’ve been hoping they change this for a long long time
I have worked for as both a teacher and a childbirth educator for 27 years each. I paid into both systems and yet my social security benefit will be greatly reduced due to my work as an educator. In addition, I will not see a benefit from social security if I am widowed.
I paid into social security for many years and it’s a shame I won’t get my full benefit or the benefit of my husband should he pass before me. Thanks for continuing to try this injustice corrected!
I corrected my email address.
I corrected my email address , see below.