You may be eligible for a pension based on work you did for a federal, state, or local government, a nonprofit organization, or in another country. If you did not pay Social Security taxes on your earnings, this pension can affect the amount of your Social Security benefits. We refer to this reduction as the Windfall Elimination Provision, or WEP.
If you paid Social Security taxes on 30 years of substantial earnings, WEP does not apply to you.
Our WEP fact sheet explains if WEP may affect you.
How WEP Can Affect Your Benefit
If you think your pension will affect your Social Security benefit, you can:
The Windfall Elimination Provision reduces your Eligibility Year (ELY) benefit amount before it is reduced or increased due to certain factors. These may include early retirement, delayed retirement credits, cost-of-living adjustments (COLA), or other factors. The following examples show how the WEP reduction changes when other factors affect the ELY benefit.
The monthly retirement benefits are increased or reduced based on your age after WEP reduces your ELY benefit.
If you turn 62 in 2023 (ELY 2023) and you have 20 years of substantial earnings, WEP reduces your monthly benefit by $557. (Refer to the chart below.)
Your full retirement age is 67. If your full retirement benefit is $1,396, your ELY benefit after the WEP reduction would be $839 ($1,396 - $557).*
If You Choose Early Retirement
If you decide to start retirement benefits the month you turn 62, you will get benefits before you reach full retirement age. We reduce your monthly benefit to 70% because you will get benefits for 60 additional months.
Your age 62 retirement benefit is $587 ($839 x 70% = $587) per month. If your full retirement benefit had not been reduced by WEP, your age 62 retirement benefit would have been $977.
If You Choose Delayed Retirement
If you decide to wait until age 70 to receive benefits you can get Delayed Retirement Credits.
Your eligibility year is still 2023.
If your retirement benefits start after your full retirement age (67), the benefit increases 8% for each year before age 70 that you delay retirement. If your benefits start at age 70, you get credit for the 36 additional months when you did not get benefits and your monthly benefit will be 24% higher.
Your age 70 retirement benefit is $1,040* ($839 x 1.24 = $1,040). If your full retirement benefit had not been reduced by WEP, your age 70 retirement benefit would have been $1,731.*
The COLA is added to your monthly benefit amount after WEP reduces your ELY benefit.
How To Use The WEP Chart
The chart is easy to use.
- Go to the ELY column to find the year you reach age 62 or developed a qualifying disability (if earlier). If your birthday is on January 1st, use the year before you reach age 62.
- Go to the column that shows the number of years you paid Social Security tax on substantial earnings. The amount shown is the maximum your benefit can be reduced in your ELY because of the WEP.