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dylatess, ATTORNEY
Category: Social Security
Satisfied Customers: 3441
Experience:  37 plus years of SSD practice
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When I applied at age 62 I was penalized severely a pension

Customer Question

When I applied for benefits at age 62 I was penalized severely for receiving a pension from the state retirement system. I could only earn so much money before it would effect my benefits. But now I am over 70 and can earn as much as I want. Should my benefits be recalculated now? Thanks
Submitted: 1 year ago.
Category: Social Security
Expert:  Stephanie O Joy, Esq replied 1 year ago.

Hi, my name is***** and I am here to assist you. I am a social security attorney in my private practice – that is ALL I do. Please let me know that my post here is coming through for you by typing a quick reply. Thanks, ***** ***** forward to hearing back from you.

Expert:  Stephanie O Joy, Esq replied 1 year ago.

OK, let's go over your post:

"When I applied for benefits at age 62 I was penalized severely for receiving a pension from the state retirement system. ------Well, actually saw a reduced amount for more reasons than that. First, you opted for a reduced SS benefit in exchange for collecting an extra and early 48 months worth. That cost you about 25-30% of your benefit right off the bat. THEN, if your SS benefits estimate before you applied was not using the proper numbers - such as if you had government work that you did not pay SS taxes on and thus the SSA was unaware of that lifetime set of earnings - then your estimate was incorrect. It was based on inaccurate information that resulted in a welfare addition in your benefit rate. This is because your lifetime earnings was appearing to be very low, when in fact it was not. When it appears low, the estimate is based on that and low lifetime earners get a "welfare" rate of SS retirement that the rest of the normal lifetime earners don't get. IN fact, it can be DOUBLE what the regular lifetime earner gets. Once one is determined (upon applying and giving correct info not previously available to the SSA) that you are NOT the very poor lifetime earner eligible for the welfare rate, your rate is calculated without adding the welfare. Thus, it is lower - but corrected. It is not a penalty, but a correction. I know it can feel like a penalty if you didn't realize your estimate was way off. You are now getting the same rate as others that earned the same as you, whether or not they have a government pension (many get the same rate with no government pension to receive).

"I could only earn so much money before it would effect my benefits. -------- And this is yet a 3rd rule that all of us are subject to (regardless of employer being government or non-government) - anyone collecting benefits before they are actually of full retirement age as defined by the SSA (66 for you), can only collect SS if they are ACTUALLY retired. They consider us actually retired if we earn (this year), $15720 or less per year. SO part time work is often still eligible, but working full time, we can't claim to be 'retired.' However, once we are old enough, that limit has been removed.

"But now I am over 70 and can earn as much as I want. -------- Yes, that started when you were 66.

"Should my benefits be recalculated now? Thanks ------- They are calculated each year, so no worries. You may have noticed that if you work and earn a lot, your benefit does not get reduced. Of course, collecting your benefits early as you did, that 48 months of extra when you were under full retirement age, means that those "extra" payments were actually taken, a tiny bit, from each of your future benefits, making your benefit amount smaller to pay for those extra early payments you wanted. So that reduced amount lasts forever, to make sure you are not getting more than others.

I would add that should you wish to work more years, in an SS tax paying job, and should your total substantial SS tax paying years reach 30, you will no longer have that WEP correction I noted above (the second area of reduction). If you can't get to 30 years, the closer you get to 30, the less WEP reduction gets applied, i.e.that welfare rate is no longer welfare to be eliminated.

I hope this helps! My goal is to provide you with excellent and accurate service – if you feel you have gotten anything less, please reply back, I am happy to address follow-up questions.

Kindly rate me "excellent"when you are done. I look forward to assisting you in the future, should you have legal questions. Be sure to start future posts with "To ***** Esq., ONLY" if you want me to specifically answer it.

Sincerely, ***** ***** Joy, Esq.

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