Change Jobs to Increase Social Security?

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Topic Author
OnVacation
Posts: 1
Joined: Sun Jan 09, 2022 1:28 pm

Change Jobs to Increase Social Security?

Post by OnVacation »

I've appreciated reading the advice on this forum for many years, but this is my first time posting. I have a job that doesn’t pay into Social Security. Instead, my employer and I each contribute 10% of my pay to a pre-tax retirement account that is subject to the Windfall Elimination Provision. Based on the current value of this account, my Social Security income will be reduced by about 13% due to WEP. My SS benefit will continue to decrease as the pre-tax account value increases until the WEP penalty caps out with about a 25% SS reduction in approximately six years, leaving my monthly benefit at about $1,100 (assuming benefits at age 62).

I have 24 years of substantial SS earnings, so if I were to work at a job that pays into SS for 6 more years, I could both increase my SS base and eliminate WEP (due to having 30 substantial SS earnings years). If I were to quit working today, SS would account for about 20% of my retirement income, with investment income providing the rest. Due to the growing pre-tax account and increasing WEP penalty, each year that I work at this job will transfer additional retirement income away from SS and into investment income.

My question is, how concerned should I be about this from a diversification standpoint? I appreciate the inflation protection and stability built into SS, especially with the high CAPE values and inflation we are currently experiencing. I have a few more years until I plan to retire, and if I change employers I could both increase my base SS and reduce WEP impact. I like my current job, but does it make sense to consider switching employers in order to contribute a few more years to SS?
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