Here's How Having A Pension Affects Your Social Security Benefits
WEP looks like one of those mysterious acronyms the kids use on social media, but it stands for Windfall Elimination Provision. And sadly, there's not much mystery about it. The WEP may impact your retirement income if you qualify for both a pension and Social Security benefits.
The WEP has been an ongoing source of debate among lawmakers. It was initially implemented to add fairness to the Social Security benefit calculation. But now lawmakers aren't so sure it's fair enough, and two competing bills are proposing changes to how the WEP works. Both bills defer implementation until 2022 -- so we're stuck with the current rules for now.
The WEP comes into play when you've worked in "covered" jobs where you paid Social Security payroll taxes and "noncovered" jobs where you didn't pay Social Security payroll taxes, earning a pension instead. In certain situations, the WEP reduces your Social Security benefits by up to half of your pension. Simply put, if you qualify for a pension of $900 monthly, the WEP may cut your Social Security benefits by up to $450.
Source Fool.com
