Public employees and Social Security | Lifestyles | #retirement | #elderly | #seniors
If you have many years of work in which you paid FICA taxes, the windfall elimination provision’s impact may be reduced or eliminated. It has less effect if you have 21 to 29 years of “substantial earnings” that were taxed for Social Security and does not apply at all if you have 30 years of such work. In 2020, the substantial level was $25,575.
The government pension offset
A government pension also reduces or offsets Social Security spousal or widow(er) benefits. The amount of the reduction is two-thirds of the government pension. The government pension offset is often enough to eliminate any spousal benefits.
Example: Mary has a government pension from work not covered by Social Security. She receives $270 per month. Her husband receives $2,000 per month in Social Security benefits based on his job. Normally Mary would be entitled to $1,000 per month as a spousal benefit upon reaching her full retirement age. Because of her pension, her spousal benefit would be reduced by two-thirds of $270, or $180 per month. She would be entitled to $820 per month as a spousal benefit. If her husband predeceases her, at full retirement age she would be entitled to a survivor benefit of $1,820 per month ($2,000 minus $180).
For more information on the offset, see Social Security Administration Factsheet “GPO” at www.ssa.gov/pubs/EN-05-10007.pdf. A government pension offset calculator is at www.ssa.gov/planners/retire/gpo-calc.html.
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