Q&A: Understanding pension vs Social Security

Dear Liz: I recently retired as a lifelong federal employee after 40 years of service. I participated under the old Civil Service Retirement System. My pension is about $85,000 per year. I will be 64 this year.

Twenty years ago, my ex-wife and I divorced after 17 years of marriage. Friends of mine have indicated that because we were married more than 10 years, I am eligible for a spousal Social Security benefit. I thought because I was covered under the CSRS, any Social Security received would be offset against the monthly pension payment.

I think this is due to the government pension offset, which has been in effect since 1983. My Social Security benefit would in effect be zero. Is my understanding accurate?

Answer: Yes. If you’re receiving a government pension based on work for which you didn’t pay Social Security taxes, then the pension offset typically reduces the amount of any so-called dependent benefits you might receive by two-thirds of the amount of that pension.

That reduction can wipe out any spousal or survivor benefit you might otherwise get.

Before the offset, people with government pensions that didn’t pay into Social Security could wind up better off than people who had paid into the system their entire working lives.
Those who paid into the system would get the larger of the checks to which they were entitled — either the dependent check or their own — while those who had pensions outside the Social Security system could get both their own benefit and dependent benefits.

There is a way you could have received a spousal benefit, and that’s if you had put off receiving your pension, said Laurence Kotlikoff, coauthor of “Get What’s Yours: The Secrets to Maxing Out Your Social Security.”

If putting off the pension would have increased the amount you received, it could have made sense to do so and take the spousal benefit in the meantime.

There are various other exceptions to these rules, so you should check out the government pension offset information available at the Social Security site, www.ssa.gov.

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  1. My husband & I are paying back my youngest son school loans. They are private loans. I will be retiring soon. Should we set up an account separate from our household account to pay the loans?

  2. i am collecting my deceased husbands social security,I was married to him for 21 years.I am on disability. He had remarried before he died and i am married to my husband who is retired. I will be 60 next year. I have been seperated for 2 1/2 years and i have filed for a divorce. My question is, if i were to remarry in the future and it is a younger man will i loose the social security i get since i’m on disability?

    • Liz Weston says

      I’m a little unclear how you’ve been receiving survivor benefits if you remarried. Those aren’t supposed to be available to survivors who marry before age 60. Also, typically you would receive the larger of two checks, not both. If you can send me the details of your situation using the “contact” form on this site, I’ll try to get you an answer.