Should my daughter opt out of PARS retirement system to avoid WEP reduction on future Social Security benefits?

This is a great question. The WEP can reduce her future Social Security benefits if she has a pension from work not covered by Social Security (like many school systems). However, for the WEP to significantly impact her, she would need to work in that non-covered employment for many years. Two important points: 1. The WEP reduction is capped at $534/month (2025 amount) and the reduction is less if you have fewer than 20 years in non-covered employment 2. With 30+ years of substantial earnings under Social Security, the WEP doesn't apply at all Since your daughter is only 20 and just starting out, chances are she'll have plenty of years of substantial SS-covered earnings, so I wouldn't worry too much about a small PARS account from a part-time job affecting her decades from now.

my wife worked at a school for 4 years with their pension thing, left it there when she changed jobs and now 20 yrs later its worth like nothing lol. small amounts in these systems just sit there and barely grow. if ur daughters only pt time probably not much in there anyway

If shes' only working part time she probably isnt making enough for it to matter much either way? How much is even going into that PARS acct each year?

I worked with people affected by WEP for years, and here's what I'd suggest: 1. Look at how much she has in PARS right now - if it's a small amount, she could consider withdrawing it (there may be taxes/penalties) and rolling it to an IRA if possible 2. If she leaves the job soon, some plans allow you to cash out small balances without major penalties 3. WEP primarily affects people who spent substantial careers (15+ years) in non-covered employment 4. For someone young with a small PARS balance from part-time work, the WEP reduction would likely be minimal if it applies at all Some school districts allow employees to choose between their pension system and Social Security. If that's an option, and she's uncertain about staying in education, opting for SS coverage might simplify things, though pension benefits can be more generous for career educators.

I've been trying to understand this WEP thing myself too and it's SO CONFUSING!! From what I've read the whole system is totally unfair. Why should people be PUNISHED for having multiple types of retirement?? Congress keeps promising to fix it but NOTHING happens. The Social Security website explains it but it's like reading a foreign language!!! Has anyone actually gotten through to a REAL PERSON at SSA to explain this clearly??

One thing to consider is that WEP reform bills have been introduced in Congress repeatedly over the years, with some gaining significant bipartisan support. While nothing has passed yet, there's growing recognition that the current WEP formula unfairly impacts many workers. The Social Security Fairness Act and similar bills have proposed either eliminating WEP entirely or replacing it with a proportional formula that would be less punitive for people with mixed careers. Given your daughter's age, I wouldn't make decisions based on possible legislative changes, but it's worth noting that in the 40-50 year timeframe before her retirement, it's quite possible WEP rules could change significantly. The political pressure continues to build as more affected workers reach retirement age.

everyones ignoring the obvious - 20 yr olds change jobs like they change clothes. my kids had like 5 diff jobs by age 25. she prob wont even be there next yr so why stress about it

As someone who's dealt with similar decisions, I'd say don't overthink this one. At 20 with a part-time job making $12k/year, the PARS contributions are minimal and unlikely to significantly impact her Social Security benefits decades from now. The WEP reduction is proportional to your non-covered pension amount - a small pension from 2-3 years of part-time work would result in a very small WEP reduction, if any. Plus, if she ends up with 30+ years of substantial Social Security earnings (which is likely given her age), WEP won't apply at all. I'd focus on her building good work experience and figuring out her career path rather than worrying about retirement systems at this stage. The financial impact of this decision is probably much smaller than you think.