Nov
11
2011
By Guest (not verified)
Hi All .... I am seriously considering retiring in June of 2012. I am currently recieving a pension from Illinois Municipal Retirement Fund. When I retire, I will also recieve a pension from Arizona State Retirement System. I heard that a pension that is pre-tax will decrease my SSI benefit. Can anyone shed some light on this??? How do I determine if these pensions will decrease my benefit??? As stated, I plan to retire, but if my benefits are decreased, I don't think I will be able to. Thanks for your input. Timm ...
Forums:
Effect of state / local government pension on Social Security
First, I suspect you mean "Social Security retirement benefit" and not "SSI benefit" as SSI is intended for folks with low incomes.
If you worked in a job not covered under Social Security; e.g., some federal, state, or local government employment, the pension you get based on that work may reduce your Social Security benefits. Your benefit can be reduced based on one of two provisions.
The first provision, called the Government Pension Offset (GPO), applies only if you receive a government pension and are eligible for Social Security benefits as a spouse or widow(er). Under this provision, we may reduce your Social Security benefit as a spouse or widow(er) by two-thirds of the amount of your government pension. There are several exceptions to this rule.
The second provision, called the Windfall Elimination Provision (WEP), affects how the SSA calculates your Social Security retirement or disability benefits if you receive a pension from work not covered by Social Security. The SSA modifies the formula used to calculate your benefit amount, giving you a lower Social Security benefit.
http://ssa-custhelp.ssa.gov/app/answers/detail/a_id/177
http://www.socialsecurity.gov/retire2/gpo-calc.htm
http://www.socialsecurity.gov/retire2/anyPiaWepjs04.htm