Only earned income, your wages, or net income from self-employment is covered by Social Security. If money was withheld from your wages for “Social Security” or “FICA,” your wages are covered by Social Security. This means you are paying into the Social Security system that protects you for retirement, disability, survivors, and Medicare benefits.
Pension payments, annuities, and the interest or dividends from your savings and investments are not earnings for Social Security purposes. You may need to pay income tax, but you do not pay Social Security taxes.
Work you do for a state or local government agency, including a school system, college or university, is covered by Social Security in certain cases.
If you are covered by both your state or local pension plan and Social Security, you pay Social Security and Medicare taxes just as you would for any other Social Security covered job. You will see your earnings on your Social Security Statement record.
If you are covered only by your state or local pension plan:
- You don't pay Social Security taxes and your earnings won't be on your Social Security record. (Your record will show your Medicare wages if you pay into that program.)
- Your pension from noncovered state or local government employment may affect the amount of your:
Planning is the key to creating your best retirement. You’ll need to plan and save for years to achieve your retirement goals. While many factors affect retirement planning, we want you to understand what Social Security can mean to you and your family’s financial future.
Social Security Should Be Just One Part of Your Retirement Plan
On average, retirement beneficiaries receive a portion of their pre-retirement income from Social Security. As you make your retirement plan, knowing the approximate amount you will receive in Social Security benefits can help you determine how much other retirement income you’ll need to reach your goals.
Are You Eligible?
When you work and pay Social Security taxes, you earn “credits” toward Social Security benefits. The number of credits you need to get retirement benefits depends on when you were born. If you were born in 1929 or later, you need 40 credits (usually, this is 10 years of work).
If you stop working before you have enough credits to qualify for benefits, the credits will remain on your Social Security record. If you return to work later, more credits may be added. We can’t pay any retirement benefits until you have 40 credits. Visit our retirement benefits webpage for more information on how Social Security Credits work.
Verify Your Earnings History
The amount of the Social Security benefits you or your family receives depends on the amount of earnings shown on your record. Regularly checking your Social Security earnings history can help ensure there are no surprises when it’s time for you to start receiving benefits. You can find your earnings history with a personal my Social Security account. Create your account now to check your earnings history online.
Estimate Your Benefits
Knowing what you will get every month in retirement benefits helps you plan for your retirement. If you have a personal my Social Security account, you can get an estimate of your personalized retirement benefits and see the effects of different retirement age scenarios. If you don’t have a personal my Social Security account, create one at www.ssa.gov/myaccount.
The Government Pension Offset, or GPO, affects spouses, widows, and widowers with pensions from a federal, state, or local government job. It reduces their Social Security benefits in some cases.
If you receive a pension from a government job but did not pay Social Security taxes while you had the job, we’ll reduce your Social Security spouse, widow, or widower benefits by two-thirds of the amount of your government pension. This offset is known as the GPO.
Exemptions to the Government Pension Offset
Generally, we won’t reduce your Social Security benefits as a spouse, widow, or widower if:
- Your government pension is not based on your earnings.
- Your government pension is from a federal, Civil Service Offset, state, or local government job where you paid Social Security taxes; and at least one of the following applies:
- You filed for and were entitled to spouse, widow, or widower benefits before April 1, 2004.
- Your last day of employment at the job was before July 1, 2004.
- You paid Social Security taxes on your earnings during the last 60 months of government service. (Under certain conditions, fewer than 60 months may be required for people whose last day of employment falls after June 30, 2004, and before March 2, 2009.)
There are other cases where the GPO does not apply. If you need more information, please read our "Government Pension Offset" factsheet.
Information You Need to Calculate Your Benefits If You Are Affected by the GPO
To estimate your future spouse's, widow's, or widower's benefits under the GPO, you need two things:
- The estimated "gross" monthly amount of your pension from your government job not covered by Social Security.
- The estimated monthly amount of your Social Security benefit as a spouse, widow, or widower before the effect of GPO.
If you will be eligible for spouse's benefits and have access to your spouse's estimate:
- Find the estimated amount of the retirement benefit your spouse would be eligible to receive at full retirement age. If your spouse already receives benefits, ask them what their benefit would be if it started at their full retirement age.
- Divide this amount in half and round down to the nearest dollar. This is your estimated spouse's benefit if you retire at full retirement age.
If you will be eligible for a Social Security retirement benefit based on your own earnings:
As well as a higher benefit based on your spouse's earnings, it will also affect your benefits as a spouse, widow, or widower.
To get a more accurate estimate of how the government pension you receive will affect your benefit based on your spouse's work:
- Using the calculator below, enter the estimated "gross" monthly amount of the government pension (in today's dollars) you will receive for work not covered by Social Security in Step #1 of "Calculate Your Benefits."
- Use your most recent estimate to determine your estimated retirement benefit based on your own earnings.
- Subtract the estimated amount of your retirement benefit from the estimated amount of your spouse's, widow's, or widower's benefit before GPO. Enter that amount in Step #2 of "Calculate Your Benefits" and select "Compute."
- The amount in #3 of "Calculate Your Benefits" is your estimated spouse's, widow's, or widower's benefit after GPO is applied. Add that figure to the estimated amount of your retirement benefit to find your total estimated monthly benefit.
Your retirement benefit based on your own earnings may be reduced due to another provision of the law, the Windfall Elimination Provision.
If you retire before full retirement age:
Your benefit amount as a spouse will be reduced. (The reduction will vary based on your date of birth.)
Calculate Your Benefits
1. Enter the estimated "gross" monthly amount of the government pension (in today's dollars) you will receive for work not covered by Social Security:$
2. Enter the estimated monthly amount of spouse's, widow's, or widower's benefits you will receive before GPO (see above):
$
3. Your estimated monthly spouse's, widow's, or widower's benefit amount, after GPO, is:
$
Retirement Planning
If you have an estimate of your monthly Social Security retirement benefit (in future, inflated dollars), you can use the Employee Benefit Research Institute (EBRI), Ballpark E$timate Online, to get a basic idea of how much you need to save before you retire.