Hello Larry!

I was born in year 1953 in Czechoslovakia - today a part called Slovak Republic.
I came to USA in 1987.
1/ I am entitled to the minimum Slovak pension of about US $300.00 for work and years of studying there - 1971 -1985. I could start to get this pension when I was 62 years old, I did not yet, but I am considering to start in 2017.

2/ I worked almost 9 years - 1991 -2000 in Denver , CO for Denver Public Schools. At the age of 65 years I am going to start to get pension of about $350.00 from DPS.

I am still working, planning to start SS# benefits at the age of 66. My SS benefits should be around $1100.00-1200.00
How will the 2 other pensions influence (reduce ?) my SS benefits, how will be my SS calculated?
I believe both Slovak pension and DPS pension are a part of the Windfall effect.
I asked a few CPAs, they do not know how to calculate my pension and WFE especially the foreign country one.
I will appreciate your answer or an advice who can help me.

Thank you!

Viera

Hi Viera,

Social Security retirement benefits are calculated using a less generous formula if the person is receiving a pension(s) based on work that was not subject to Social Security taxes. This is referred to as the Windfall Elimination Provision (WEP). For more information on WEP, as well as exceptions to the provision, refer to this pamphlet: https://www.ssa.gov/pubs/EN-05-10045.pdf.

Assuming that you don't meet any of the WEP exceptions, your Social Security retirement benefit rate will be reduced by roughly the lower of a) half of the total amount of your non-covered pensions, or b) around $400. The latter amount is an approximation of the reduction caused by the WEP benefit computation formula, but there is a WEP guarantee provision that limits the reduction to no more than one-half of the total rate of the non-covered pension(s).

Also, you don't mention your marital history, but there is a separate provision that affects spousal, divorcee & widow(er)'s benefit. That is the Government Pension Offset (GPO), which reduces those types of benefits by 2/3rds of the amount of the recipient's non-covered pension from government agencies in the U.S. So, your school pension would count under the GPO provision, but not the Slovak pension. GPO won't matter to you, however, unless you could qualify for Social Security benefits on someone else's record.

There's really nothing you can do to avoid the affects of WEP & GPO short of not taking the outside pensions, but that would almost certainly be disadvantageous overall. What you may want to do is run the maximization software available on this website, which is programmed to handle the effects of both WEP & GPO. That will enable you to explore all of your filing options in order to determine the best strategy.

Best, Jerry