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How Pensions May Impact Your Social Security Benefits

Windfall Elimination Period (WEP)

The Windfall Elimination Provision can affect how the Social Security Administration calculates your retirement income benefit. If you are eligible for a pension based on work you did for a federal, state, or local government, a nonprofit organization, or in another country and you did not pay Social Security taxes, this pension can affect the amount of your Social Security benefits. This reduction is referred to as the Windfall Elimination Provision, or WEP.

If you paid Social Security taxes on 30 years of substantial earnings, WEP does not apply to you.

In order to calculate your WEP, you need to gather the following information:

  • Primary Insurance Amount (PIA) from SSA Statement.
  • Projected Monthly Pension Benefits from Uncovered Employment.
  • Years of Credits (YOCs) – In order to calculate your YOCs, you need your earning credits on your social security statement. There is a YOC table, and you must manually go through each year you have worked and determine how many YOCs you have.

If you think you are subject to the WEP, we can calculate the amount your PIA will be permanently reduced as a result of the WEP.

Government Pension Offset (GPO): This policy affects benefits as a spouse, widow, or widower if you have a pension from a government job for which you didn’t pay Social Security taxes.