Phil Moeller, the author of Get What’s Yours for Medicare: Maximize Your Coverage, Minimize Your Costs and co-author of the updated edition of How to Get What’s Yours: The Revised Secrets to Maxing Out Your Social Security, addresses how a company pension might affect your Social Security payout.



Dear Phil,
I read with great interest one of your recent columns on Social Security benefits. I have a few questions, though, that weren’t covered in the article and wondered if you would be willing to provide some guidance.

I am 64, working for the federal government and have an “old” type of pension plan in which I do not have payroll taxes paid to Social Security.

At my agency, we have mandatory retirement at 65, and I will likely retire early next year. I do have earlier work history that includes payroll taxes, but I’ve accumulated only 36 hours of credits — four short of being eligible for Social Security benefits.

My ex-spouse is 66 and filed for Social Security several years ago as soon as he was eligible, in part because he suffers from a terminal illness. We were married 26 years, have been divorced seven years, and I have not remarried. When I mentioned to him the possibility of collecting Social Security as an ex-spouse he raised the following concerns:

1)  My future government pension could be reduced by any Social Security payments I receive. Is this correct?

2)  Am I likely to do better by waiting to work four quarters after retirement to collect Social Security on my own?

3)  Would my eligibility to collect under this provision end when he passes if I don’t apply while he is still alive?

Thanks very much for your guidance. Best wishes — Amy 


Dear Amy,
In order:

1) Yes. The Government Pension Offset (GPO) program would affect your ex-spousal benefits. It is necessarily not dollar-for-dollar, so filing for this Social Security benefit is usually still a good idea. If you can hold off filing until your own full retirement age, your benefits will reach their maximum amount. And should you go back to work for a while to earn those four credits, any earnings made once you’ve reached FRA are not subject to reductions from Social Security’s earnings test.

Lastly, because you’ve not worked enough to file for your own benefit, filing for an ex-spousal benefit will not trigger the simultaneous filing for your own benefit.

2) It depends on the size of your ex-spousal benefit. With only 40 quarters of covered earnings, your own Social Security benefit is likely to be quite modest. In addition, it would be affected by another Social Security program for people with non-Social Security pensions who claim Social Security as well.

This is called the Windfall Elimination Provision (WEP). It’s could take you some time to figure out which approach is better, but one way or another your Social Security is either going to be WEP’d or GPO’d! 

3) When your ex-husband dies, your right to an ex-spousal benefit would be replaced with your right to an ex-spousal survivor benefit. This benefit is much larger than the ex-spousal benefit. 

Welcome to the world of confusing Social Security benefits and terms!

See more Social Security questions and answers here.