Will my pension affect my Social Security benefit?

If your pension is from a job where you paid Social Security taxes, then it won’t affect your Social Security benefit. However, if your pension is from a job where you did not pay Social Security taxes (such as certain government jobs), two special provisions may apply.

The first provision, called the government pension offset (GPO), may apply if you’re entitled to receive a government pension as well as Social Security spousal retirement or survivor benefits based on your spouse’s (or former spouse’s) earnings. Under this provision, your spousal or survivor benefit may be reduced by two-thirds of your government pension (some exceptions apply).

The windfall elimination provision (WEP) affects how your Social Security retirement or disability benefit is figured if you receive a pension from work not covered by Social Security. The formula used to figure your benefit is modified, resulting in a reduced monthly Social Security benefit.

The WEP reduction is limited to one-half of your pension from noncovered employment, and won’t apply if you paid Social Security tax on 30 years of substantial earnings.

For more information on the GPO and the WEP, visit the Social Security Administration’s website at ssa.gov.

IMPORTANT DISCLOSURES

Broadridge Investor Communication Solutions, Inc. and Westwood Holdings Group, Inc. do not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual’s personal circumstances.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.