In a recent post we mentioned Government Pension Offset (GPO) and gave a definition with the promise of giving more details in a later post. This time is as good as any to continue the dialogue. There is a wealth of information available to you on the website at the Social Security Administration. It is our intent to provide that information in an abbreviated and comprehensive version and make it part of our discussion on retiring well.
Under the Government Pension Offset, your Social Security benefits will be reduced by approximately two-thirds of your government annuity check. For example, if your monthly annuity check is $1400, then about $933 would be deducted from your Social Security payment. So if you were entitled to a $1200 spouse’s, widow or widower’s benefit from Social Security, you would receive $267 per month from Social Security ($1200 – $933 = $267).
You might ask, why can’t I collect both the $1400 from my annuity and the $1200 as spouse, widow or widower’s benefit?
The answer in brevity is because the amount you receive as a spouse, widow or widowers is considered dependent benefits. In our country’s history, many spouses in past times did not work but stayed home to take care of their families. The system was trying to make provisions to compensate those spouses who were financially dependent on the working spouse. As times changed, both spouses began to work and each earned their own Social Security retirement benefit.
The law requires that benefits as a spouse, widow or widower be offset dollar for dollar by the amount earned by his or her own retirement benefits.
P. S. Always Remember to Share What You Know.
You may also want to know about Windfall Elimination Provisions (WEP)
