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Does a pension reduce my Social Security benefits?

En español | In the vast majority of cases, no. If the pension is from an employer that withheld Social Security taxes from your paychecks, it won’t affect your Social Security benefits.

But if there was no such withholding, you may be subject to the Windfall Elimination Provision (WEP), which covers people who earned pensions from jobs that did not withhold Social Security taxes but who also qualify for Social Security due to other work. Social Security uses a modified formula to calculate the full-retirement-age benefit amount for people covered by the WEP. This formula results in a lower Social Security benefit but never reduces the benefit to $0.

A similar rule, the Government Pension Offset (GPO), affects spouses, widows and widowers who collect spousal or survivor benefits from Social Security and also receive pensions from federal, state or local government jobs that did not withhold Social Security taxes. Their spousal or survivor benefits are reduced by two-thirds of their government pension — and can be eliminated entirely if that two-thirds exceeds the Social Security payment. 

The GPO primarily applies to federal employees hired before 1984, some state or local government employees and some employees of state university systems.

Keep in mind

Pensions, regardless of their source, do not count against the Social Security earnings limits.

Published October 10, 2018

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