Social Security Choices

Government Pension Offset

If you receive a pension from an employer (usually a government employer) who did not withhold Social Security taxes from your salary, your Social Security spousal, ex-spousal, or widow(er)'s benefits may be reduced or eliminated by the Government Pension Offset (GPO). (Note that IRAs and pensions from employment where you paid SS taxes do not fall under the GPO provision.)

The GPO provision reduces your spousal, ex-spousal, or widow(er)'s benefits by $2 for every $3 of non-SS pension benefit. Unlike the Windfall Elimination Provision, you cannot escape the GPO reduction by accumulating more years of "substantial earnings" through employment taxed by Social Security. For many people with substantial non-SS pensions, the GPO completely wipes out any potential spousal or ex-spousal benefit. Since widow(er)'s benefits are larger than spousal or ex-spousal benefits, the GPO is less likely to eliminate them completely.

Currently, our custom analyses incorporate the impact of GPO on the Social Security claiming strategies for married couples. GPO effects will soon be incorporated into the analyses for divorced persons and for widow(er)s. Single people are not affected by the GPO since, by definition, they are not eligible for any spousal-related benefit.