How does Windfall Elimination Provision interact with taking CPP early?

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rj2
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Joined: Sun Apr 28, 2019 6:46 am

How does Windfall Elimination Provision interact with taking CPP early?

Post by rj2 »

WEP reduces your social security benefit by up to half your CPP benefit.

What happens when you take CPP early? Your CPP amount will be reduced by up to 36% by taking it early as possible. Does that reduce the clawback as well?

In other words, if by taking it early you got a $320 monthly CPP payment instead of a $500 payment, would WEP be $160 instead of $250?

Or would SSA reach out to CPP and figure out what your age 65 benefit would have been and use that instead?
nelsona
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Re: How does Windfall Elimination Provision interact with taking CPP early?

Post by nelsona »

SSA will use the benefit you are receiving at the first month you get BOTH SS and CPP, so in your example, $320 would be used in determining wep.

If you look at it like it is your CPP that is being cut, you will see that there is benefit to taking CPP as early as possible (the early reduction in my opinion is outweighed by the longer period of receiving CPP) you will be getting CPP with the WEP cutback.

From calcs I did on another forum, I would be taking CPP as early as possible, before taking SS, especially if you are no longer contribution to CPP (ie, retired or living in US)
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nelsona
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Re: How does Windfall Elimination Provision interact with taking CPP early?

Post by nelsona »

"will be getting CPP withOUT the WEP cutback."
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
rj2
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Joined: Sun Apr 28, 2019 6:46 am

Re: How does Windfall Elimination Provision interact with taking CPP early?

Post by rj2 »

Thanks. So you can take CPP from 60, and SSA from 62.

From your answer it clearly makes sense to take CPP from 60, assuming I'm either working in the US or retired at that time.

Then the question is, when should I take SS? If I'm retired that that time it would seem to make sense to take it at 62?

Reasoning: My $160 WEP reduction would be reduced by 25% if I took SS at 62, and be only a $120 reduction, since SS would calculate my pension as if I got it at age 65 and then reduce the whole amount by 25% for early retirement.
nelsona
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Re: How does Windfall Elimination Provision interact with taking CPP early?

Post by nelsona »

SSA has stated that the penalty/bonus for taking SS early/late is designed to give all recipients the same amount if the live to the life expectancy. So I don't see the point of waiting, either , WEP aside. The earlier you trigger WEP, you don'tahve to worry about COLA increasing your WEP penalty.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
Gilgamesh
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Joined: Tue Apr 02, 2019 5:30 pm

Re: How does Windfall Elimination Provision interact with taking CPP early?

Post by Gilgamesh »

A higher earning spouse could delay SS, because if he/she passes away, the spousal benefit would be higher for the spouse....SS benefit analysis AFAIK does not consider this - so it is a bonus.

Even though actuarially speaking delaying doesn't do much, but considering SS is a great inflation adjusted floor, which money can't buy, one could elect to defer, just as a hedge for longevity and inflation risks without much of an institutional risk.
Gilgamesh
Posts: 78
Joined: Tue Apr 02, 2019 5:30 pm

Re: How does Windfall Elimination Provision interact with taking CPP early?

Post by Gilgamesh »

Wonder whether you've tried this calculator? I haven't

https://www.ssa.gov/planners/retire/anyPiaWepjs04.html

A stand alone, Free SS calculator
https://opensocialsecurity.com/
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