Annuites, Pensions and SS

[TPAAgent]

Not an annuity agent- sell strictly final expense but thought I'd come here to see if someone could answer a couple of questions of mine... might be a dumb question but here goes...

1) If someone works for a company and gets a pension when they retire, are they able to still collect social security that they paid into? Or do they have to choose between the two?

2) What if this same person bought a SPIA? If someone buys a SPIA, can they still collect social security.. I would think they could collect both the SPIA and pension...

I know probably dumb question but just had a client ask me and didnt have the answer... If anybody could answer that for me I'd appreciate it

Thank You

 

[jmhalvo]

Not an annuity agent- sell strictly final expense but thought I'd come here to see if someone could answer a couple of questions of mine... might be a dumb question but here goes... 1) If someone works for a company and gets a pension when they retire, are they able to still collect social security that they paid into? Or do they have to choose between the two? 2) What if this same person bought a SPIA? If someone buys a SPIA, can they still collect social security.. I would think they could collect both the SPIA and pension... I know probably dumb question but just had a client ask me and didnt have the answer... If anybody could answer that for me I'd appreciate it Thank You

nothing stops or denies your SS payments. One is always "entitled" if one worked required quarters.

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Only q is the degree of taxation- the other income can affect that

 

[Norwayguy]

nothing stops or denies your SS payments. One is always "entitled" if one worked required quarters.

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Only q is the degree of taxation- the other income can affect that

There can be an offset for people who worked the majority of there career in jobs that did not contribute to social security such as Teachers in Maine under Maine State Retirement. But if you look at their social security statement and the two columns Medicare and social security earning match its a nonissue and will be a nonissue for most people.

 

[Justin Bilyj]

So to reiterate, you can have a SPIA, a pension or 401k, and SS all pay out at the same time. None impact each other other than to the degree of taxation.

 

[Norwayguy]

So to reiterate, you can have a SPIA, a pension or 401k, and SS all pay out at the same time. None impact each other other than to the degree of taxation.

A pension at a private company is not a problem a pension from a public pension might....The OP should grab a social security statement preferably thier own and read all four glorious pages and then look up the info that is referenced about Pension Offset etc.

 

[AnonymousOne]

Most of my clients have pensions. About 1 in a 1000 have a lowered ss payment from the offset. There is a nice 2 page article in the ss PDF.

 

[jmhalvo]

Most of my clients have pensions. About 1 in a 1000 have a lowered ss payment from the offset. There is a nice 2 page article in the ss PDF.

ok, this is good- was not aware. How much of an offset on avg as a %?

 

[AnonymousOne]

Windfall elimination provision
http://www.ssa.gov/pubs/EN-05-10045.pdf
Government pension offset
http://www.ssa.gov/pubs/EN-05-10007.pdf

Formula isn't too complicated.

 

[jmhalvo]

Windfall elimination provision http://www.ssa.gov/pubs/EN-05-10045.pdf Government pension offset http://www.ssa.gov/pubs/EN-05-10007.pdf Formula isn't too complicated.

I see - it's for spousal benefits, where spouse did not otherwise qualify

 

[Norwayguy]

I see - it's for spousal benefits, where spouse did not otherwise qualify

Read both because it can be on their own benefit. But it is only an issue for people that have a pension from employment were they did not contribute to social security a quick scan of the Medicare and social security earning numbers will quickly show if someone will be subject ie you see years of no to very little social security earnings and the corresponding Medicare column shows 50k in earnings its due to a position were they did not contribute to social security, you just need to know your state many state pensions the employee still contributes to social security, new federal employees are under FERS and they contribute to SA but older CSRS employees did not obviously since its been many years since a nonFERS employee has been hired its becoming less of an issue.