Social Security after state pension - work 3 more years or claim now at FRA?
I'm in a bit of a dilemma with my Social Security benefits. I'm currently at my Full Retirement Age (66 and 6 months) but only worked 32 years in jobs that paid into Social Security. I've spent most of my career with the state government and will receive a pension from them. Now that I'm at FRA, I'm considering getting a private sector job for the next 3 years until I turn 70. I've been told my SS benefits might be affected by the Windfall Elimination Provision because of my state pension. Here's my question: Should I start collecting Social Security now at my FRA while I work these additional 3 years, or would it be financially better to wait until I'm 70 to apply for SS? Will working these extra years significantly increase my benefit amount even with the WEP reduction? Any advice would be greatly appreciated!
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Hannah Flores
This is a good question that depends on several factors. Since you're subject to WEP due to your state pension, your SS benefit is already reduced. Working 3 more years will add to your earnings record, but might not substantially increase your benefit if those years don't replace lower-earning years in your top 35. The guaranteed 8% per year increase for delaying from FRA to 70 is typically a good deal, especially if you're in good health and expect longevity. If you start collecting now while working, you won't face any earnings test since you're at FRA, but you'll miss out on the delayed retirement credits. Have you gotten an estimate from SSA of what your benefit would be at FRA versus age 70?
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Dominic Green
•Thanks for the reply! I haven't gotten an official estimate from SSA comparing the two scenarios. The last statement I received showed about $1,650/month at FRA, but that was before accounting for WEP. I think they estimated around $2,150 at age 70, but again, not sure how WEP factors in. I'm in excellent health - both my parents lived well into their 90s.
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Kayla Jacobson
I went thru almost EXACT same situation!!! My state pension is from Florida, worked 28 years there. I waited til 70 to claim SS and it was DEFINITELY worth it for me. My monthly SS check is almost $900 higher than if I'd taken it at FRA even with the stupid WEP reduction. The extra years of work helped too but honestly it was the delayed credits that made the BIG difference. Do you know how much your WEP reduction will be?? That's the key piece you need to figure out.
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Dominic Green
•Thanks for sharing your experience! I'm not entirely sure about the exact WEP reduction. I think it might be around $400-450 per month based on what I've read, but the SSA hasn't given me a clear answer. Did working those extra years after FRA help reduce your WEP penalty at all?
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Kayla Jacobson
•Yes actually working longer DID help with my WEP! Every "substantial earning" year (earned over around $27k in 2024) counts toward reducing the WEP penalty. If you can get to 30 years of substantial earnings the WEP goes away completely! I didn't make it to 30 but got to 25 years of substantial earnings which reduced my WEP penalty significantly. If your 3 new years will be substantial earnings years, thats another big reason to take that job!
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William Rivera
My husband says just take it now, bird in hand worth 2 in bush lol! Who knows if you'll even make it to 70? Gov't constantly changing rules anyway.
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Grace Lee
•That's terrible advice. Life expectancy tables show that if you're healthy at FRA, you're likely to live well into your 80s or beyond. The breakeven point is usually around 82-83 years old. After that, delaying to 70 pays more in lifetime benefits.
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William Rivera
•Well excuuuse me Mr. Financial Expert! Everyone's situation is different and not everyone makes it to 80+ even if they're healthy at retirement! My uncle was fine at 66 and gone at 68. Just saying...
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Mia Roberts
Based on what you've shared, I would recommend waiting until 70 to claim for several reasons: 1. The WEP reduction is capped at a certain amount, but the delayed retirement credits of 8% per year are applied to your benefit *after* the WEP reduction 2. Those additional 3 years of substantial earnings could reduce your WEP penalty - you need 30 years of substantial earnings to eliminate WEP completely, but even getting to 21-29 years reduces the penalty 3. If you have family longevity as you mentioned in your comments, you'll likely come out ahead by waiting 4. Since you're planning to work anyway, you don't need the income right now I suggest contacting SSA directly to get exact calculations for both scenarios. Their wait times are awful though.
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The Boss
•Try using Claimyr to reach SSA quickly (claimyr.com). I was facing 3+ hour waits trying to get specific benefit calculations like this, but their service got me through to a real person in under 15 minutes. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU. Seriously worth it for questions like this where you need specific numbers from SSA to make a major financial decision.
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Evan Kalinowski
I don't think anyone mentioned this yet, but you should also consider how the Government Pension Offset (GPO) might affect any spousal or survivor benefits you might be eligible for. GPO is different from WEP and can reduce spousal/survivor benefits by 2/3 of your government pension. Are you married or widowed? That could affect your strategy too.
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Dominic Green
•Yes, I'm married. My husband worked in the private sector his whole career and is already collecting his Social Security. His benefit is higher than mine will be. I didn't even think about how GPO might affect spousal benefits - that's another layer of complexity I need to consider. Thanks for bringing that up!
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Grace Lee
wait wat you only need 30 yrs substantial earnings to eliminate WEP????? I thought it was 40 quarters (10 yrs)??
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Hannah Flores
•You're confusing two different things. You need 40 quarters (10 years) of coverage to be ELIGIBLE for Social Security retirement benefits at all. But the Windfall Elimination Provision (WEP) reduction gets eliminated only if you have 30+ years of 'substantial earnings' under Social Security. And it gets reduced on a sliding scale between 20-30 years of substantial earnings.
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Kayla Jacobson
Forgot to mention - make ABSOLUTELY SURE your new employer isn't exempt from SS taxes!!! Some public jobs dont pay into SS at all and working there won't help your situation. Check that they withhold FICA taxes from your first paycheck!
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Dominic Green
•That's a really good point! I'll be working in the private sector so I should be covered, but I'll definitely verify the FICA withholding on my first paycheck. Thanks for the tip!
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William Rivera
random question but whats the current substantial earnings amount for 2025? Is it still around $28k?
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Mia Roberts
•For 2025, the substantial earnings amount is approximately $29,500. It's indexed each year for inflation. You can find the full chart of yearly substantial earnings amounts on SSA.gov by searching for 'substantial earnings WEP chart'.
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Evan Kalinowski
Since you mentioned you're in good health and longevity runs in your family, have you considered the tax implications of your decision? If you claim now while working, more of your SS benefits might be taxable. If you wait until 70, you'll have a higher benefit, but potentially more of it subject to taxation depending on your other income sources in retirement.
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Dominic Green
•That's another aspect I hadn't fully considered. I'll need to look at our overall tax situation in retirement. We'll have my husband's SS, my state pension, some 401k withdrawals, and then eventually my Social Security. I should probably consult with a tax professional to model different scenarios. Thanks for bringing this up!
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