Since Tax Day is less than two weeks away (I’m a CPA as well as a financial planner and a blogger), I don’t time to write a full post on this, but I saw an article that will make many of you happy (or at least hopeful).
According to this article on MarketWatch.com, there is a proposal in Congress to reform the windfall elimination provision or WEP.
The WEP reduces a person’s Social Security benefit if they also receive a government pension from non-covered employment on which Social Security payroll taxes were not paid. While the WEP is intended to ensure that Social Security beneficiaries are treated fairly and that benefits are provided only for years in which people paid into the Social Security system, the result is that the replacement rate for some people with high lifetime combined earnings is higher than those with low lifetime earnings. Thus, the WEP mistakenly treats some high-income earners as if they were low-income earners.
The article goes on to say…
The good news is there is real opportunity for reform — the administration and members of Congress on both sides of the aisle agree that the WEP formula should be addressed. The challenge will be ensuring any changes are an improvement for both the Social Security program and its beneficiaries.
You can read the complete article here: https://www.marketwatch.com/story/will-change-come-to-the-social-security-windfall-elimination-provision-2016-04-05
I will keep an eye on this proposal and let you know if anything develops!