Everything You Need to Know About Social Security’s GPO & WEP: In this video, Kurt Czarnowski of Czarnowski Consulting explains everything you need to know about Social Security’s government pension offset (GPO) and windfall elimination provision (WEP). If you’re a government employee, you need to understand Social Security‘s Government Pension Offset. And whether you work in the public or private sector, the Windfall Elimination Provision could surprise you with recued benefits depending on your earnings.
The Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP) are two provisions that affect Social Security benefits for individuals who receive pensions from employment not covered by Social Security, such as some government employees and workers who receive pensions from foreign employers.
- Government Pension Offset (GPO): The GPO affects spousal or survivor benefits received by individuals who also receive a government pension based on work not covered by Social Security. Under the GPO, the spousal or survivor benefits that a person is eligible to receive from Social Security are reduced by two-thirds of the amount of their government pension. This reduction is intended to ensure that individuals who receive both a government pension and spousal or survivor benefits from Social Security do not receive benefits that exceed what they would have received if they had paid into Social Security throughout their working lives.
- Windfall Elimination Provision (WEP): The WEP affects Social Security retirement or disability benefits received by individuals who also receive a pension based on work not covered by Social Security. The WEP modifies the formula used to calculate Social Security benefits for these individuals, resulting in a lower benefit amount than they would otherwise receive if they had paid into Social Security for their entire working lives. The WEP primarily affects individuals who have relatively short careers in jobs covered by Social Security and longer careers in jobs not covered by Social Security, such as certain government employees or workers with pensions from foreign employment.
Both the GPO and the WEP are intended to ensure fairness in the Social Security system by adjusting benefits for individuals who receive pensions from work not covered by Social Security. However, they can also be complex and may result in lower benefits for some individuals. It’s important for those potentially affected by these provisions to understand how they work and how they may impact their Social Security benefits.
In this video, Robert Powell CFP discusses these two lesser-known provisions with financial planner Kurt Czarnowski of Czarnowski Consulting. He offers details on these provisions and what people should know as they plan for their retirement.
Follow this link to learn more about social security on finStream TV: https://www.finstream.tv/videos/social-security/