Hi Larry!

I was a public servant for 10 years and now work for a state-level hospital system, both of which have pension programs. I do not pay into Social Security. This seems typical for some states (Massachusetts, Colorado) but my understanding is it may not be the same for all states. I'm curious what, if any, implications there might be when I reach retirement age? Thanks for your insight!

Hi. My expertise is limited to Social Security benefits, so that's all I can tell you about. If you receive a pension based on your work for governmental agency here in the U.S. and if you didn't pay Social Security taxes on those earnings, then any Social Security benefits for which you qualify would likely be reduced. There are two separate Social Security provisions that could affect your Social Security benefits. One is the Windfall Elimination Provision (WEP), which can reduce the benefit rate of Social Security retirement or disability benefits that you qualify for based on your own Social Security covered earnings (https://www.ssa.gov/pubs/EN-05-10045.pdf).

The other provision is called Government Pension Offset (GPO). The GPO provision can result in an offset of any Social Security spousal or survivor benefits for which you'd otherwise qualify by 2/3rds of the amount of any pension you receive that's based on your non-Social Security covered earnings from working for a governmental agency (https://www.ssa.gov/pubs/EN-05-10007.pdf).

If you believe that you may qualify for any Social Security benefits, then you should strongly consider using our software (https://maximizemysocialsecurity.com/purchase) to fully analyze all of your options so that you can determine your best strategy for maximizing your benefits. Our software is fully programmed to handle computations involving WEP and/or GPO.

Best, Jerry