Social Security reduced for a pension (pensions, federal, state, retired)
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I was listening to Clark Howard on the radio and he told a gentleman that if he took SS at 62 instead of full retirement age that his SS would be reduced by $1 for every $2 of his pension, because he had a fairly substantial pension. I have never heard of this. I knew that it worked that way if you "earned" more than a certain amount at a job, but does this also go for pensions? At what dollar amount of pension would this kick in? I hope we are not going to get caught in this scenario....
SS will get taxed (85% of it) if your income is over 34/44K,
There is a carve out for worker getting SS in the year they stop working they there earned income in the months before they got SS does not count in the 2:1 reduction that year.
I'm not talking about taxes, but a dollar reduction in the amount of SS payment. And he seemed to be saying that this only occurs if you take SS before full retirement age (65-67 y/o), and you have a pension of some unstated dollar amount. I have never heard of someone's SS being reduced for pension income. Only if the pension was from the federal government, maybe??? My DH is planning on taking his at 62, and we both have pensions, so this affects us directly if it's true.
I Didn't hear Clark but have him on my Itunes podcasts, (yes i know Clark is in atlanta, but have to work)... What day did Clark say this?
There is a 'win-fall' provision of SS when you are using it with federal pensions. But Normal private sector pensions there is no offset. You do take a discount for taking SS early before your normal retirement age. You also get extra if you delay taking it.
Since you mention gov't pension, if you are a CSRS retiree then windfall kicks in and your SS is reduced by a formula. That is because as a CSRS you did not pay into SS.
If you are a FERS employee, then this windfall doesn't apply because you did pay into SS.
think the last poster mentioned if it is a private employer pension, there is no offset/windfall.
Since you mention gov't pension, if you are a CSRS retiree then windfall kicks in and your SS is reduced by a formula. That is because as a CSRS you did not pay into SS.
My husband paid into SS for 12 years before a CSRS job. Then, during the 30 years with CSRS and after retirement, he worked and paid into SS again for another 10 years. So, he is both a CSRS and SS retiree since he received 88 credits with SS. Nevertheless, his SS was reduced by 60% as per WEP.
Right. This will happen to me as well when I retire, I will get a pension from Clark County School District, same thing....I am not worried about it though, as I will be getting two other pensions. And maybe some Social Security. Right now I am working on my third pension, FERS. And have no desire to stop working for another 25 years or so...
Others know much more them me but this is what I learned.
From age 62 to full retirement age if you earn over a given amount of money, your SS could be reduced and it is $1 for $2. I do not know how the amount you can earn is determined but when I retired at 62 (9 years ago) they did give me an amount I could earn (was about $25K) before any SS effect.
SS can be taxed and the amount of it taxed will depend on income other then SS.
Thanks for the replies so far. What is CSRS? So if it is reduced if you retire at 62, is that reduction re-instated when you turn full retirement age?
apparently this doesn't apply to your situation or you would be familiar with the term. It is a type of federal employee. so not to worry about that one.
don't know about your other pensions, but the ss website explains it all
good luck
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