Tips for getting your Full Social Security Benefit

Once we become vested in the social security system we start receiving annual statements that “estimate” our benefit. For a lot of us, these statements accurately illustrate the present value of your benefit. But for some, when the often overlooked, small-print, on the estimate applies, it could mean some or all of your Social Security benefit will not be paid. The statement usually reads: “Your benefit amount may be affected by military service, railroad employment or pensions earned through work on which you did not pay Social Security tax.”

This statement is referring to “offsets” that your benefit can be adjusted by. They are known as the Windfall Elimination Provision (WEP), Government Pension Offset (GPO), and the Pension Disability Offset (PDO). The Social Security Administration does not have specific information regarding pension benefits that are due to you from other entities, so the estimated benefit on your annual statement cannot be accurately adjusted for these offsets.

Windfall Elimination Provision (WEP)
Let’s discuss the Windfall Elimination Provision first. The WEP offset will apply to you if you reached 62 or became disabled after 1985, and you first became eligible for a monthly pension based on work where you did not pay Social Security taxes after 1985, even if you are still working. This includes wages from a federal, state or local government agency, a nonprofit organization or wages earned in another country. Refer to the social security website on WEP reductions to estimate your specific reduction: .

The Windfall Elimination Provision does not apply to survivor’s benefits. It also does not apply if: You are a federal worker first hired after December 31, 1983; You were employed on December 31, 1983, by a nonprofit organization that did not withhold Social Security taxes from your pay at first, but then began withholding Social Security taxes from your pay; Your only pension is based on railroad employment; The only work you did where you did not pay Social Security taxes was before 1957; or You have 30 or more years of substantial earnings under Social Security.

For complete information on WEP go to .

Government Pension Offset (GPO)
The Government Pension Offset applies to spousal or widow/widower benefits. If you receive a government pension, your spousal or widow/widower social security benefit will be reduced by $2 for every $3 of your Government pension. For example, if you receive a government pension of $900/month and your spousal social security benefit is $800/month then your SS benefit will be reduced by ($900 x 2/3) = $600. So instead of the $800 SS benefit, you will receive ($800-600) = $200. Overall, your monthly benefits will be reduced from $1700 to $1100, a significant reduction. For complete information on GPO go to . And in case you are now wondering, you can be affected by both WEP and GPO. WEP is calculated first, then GPO. Under GPO all of your SS benefit could be eliminated.

Pension Disability Offset (PDO)
The Pension Disability Offset applies if you are receiving a disability pension from non-covered employment at the same time you are receiving a SS disability benefit. The two combined benefits cannot exceed 80% of average monthly earnings based on Social Security covered earnings. For example, if your average, pre-disability, social security covered wages were $3000, your combined disability payments cannot exceed $2400 before the SS disability is reduced. Exceptions to this are disability received from VA, disability from SS covered employment, private disability insurance, or SSI. For complete information on PDO go to .

Military or Railroad Service
If you worked for the Military or the Railroad your statement may not accurately reflect your earnings history. If you have 10 or more years of railroad work or at least 5 years after 1995, SSA will not use those earnings in determining your Social Security credits or benefit amount. They do not include them with your other earnings on your statement. You should contact a Railroad Retirement Board office for information about railroad pension benefits based on those earnings.

By learning this info early you can avoid any surprises and properly plan your retirement. The Social Security Administration has a very good online reference at or . For the specific information regarding your statement go to .