By Russell Gloor, National Social Security Advisor at the AMAC Foundation, the non-profit arm of the Association of Mature American Citizens
Dear Rusty: My wife, born in 1960, was a Texas school teacher for about 10 years and receives a $1,000 per month pension from that work. She didn’t pay into Social Security while teaching, but she paid into it for about 23 years while working elsewhere. I paid into Social Security my entire life, the maximum in most years, so my SS benefit will be much greater than hers.
I understand there are some sort of penalties or restrictions on my wife’s Social Security benefits and also for spousal benefits due to her school pension. Please share the process I can use to estimate my wife’s Social Security and tell me if she can file for spousal benefits. Signed: Planning for the Future
Dear Planning: Because your wife has a Texas school teacher pension earned without contributing to Social Security, any SS benefits she is entitled to will be affected by two rules – first, by the Windfall Elimination Provision (WEP) which will reduce her personally earned Social Security retirement benefit and, second, by the Government Pension Offset (GPO) which will reduce any spousal boost (if she is entitled to one) to her own benefit.
The amount of the WEP reduction to your wife’s personal SS retirement benefit will be computed using a special formula which considers the number of years she has contributed to Social Security through other (non-state) work. Since your wife became eligible for Social Security benefits in 2022 the maximum WEP reduction with 23 years contributing to SS will be $358.
If your wife has already obtained an estimate of her Social Security retirement benefit, deduct $358 from that estimate and that will be pretty close to her actual SS retirement benefit when she claims. Social Security will figure out the exact amount of her WEP reduction when your wife applies, but you can also use Social Security’s “WEP Calculator” for an estimate, which you can find at this link: www.ssa.gov/benefits/calculators/.
Whether your wife will be entitled to a “spousal boost” to her own Social Security retirement benefit depends on how your respective FRA entitlements compare, and the GPO. The base amount of your wife’s spousal boost will be the difference between her pre-WEP FRA entitlement and 50% of your FRA entitlement. If your wife’s normal FRA entitlement is less than 50% of your FRA entitlement, the difference is a “spousal boost” added to your wife’s personal SS retirement benefit.
However, that base spousal boost will be reduced if taken before your wife reaches her FRA, and even further reduced by the GPO (the GPO reduction will be 2/3rds your wife’s State of Texas pension, e.g., about $667). Any remainder left after these reductions to your wife’s spousal boost will be added to her own WEP-reduced SS retirement amount, but if the remainder is $0 then no spousal boost will be given, and your wife will get only her WEP-reduced Social Security retirement amount.
FYI, Social Security’s WEP and GPO provisions apply to anyone who has a pension earned without contributing to Social Security, including many public service retirees in the 26 states which do not participate in the federal Social Security program. I’ve published numerous articles about how these rules affect benefits, and also about the rationale behind both provisions, which you are welcome to review at this AMAC Foundation website: www.SocialSecurityReport.org.
This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (amacfoundation.org/programs/social-security-advisory) or email us at ssadvisor@amacfoundation.org.
