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Social Security: Will the Government Pension Offset Cut Your Benefits?

Social Security provides essential benefits for millions of retirees. But those who receive government pensions that weren't funded by Social Security could lose some of their spousal benefits, due to a little-known Social Security provision called the government pension offset.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, explains the government pension offset and how it affects you. In general, if you get an outside pension, your Social Security survivors' or spousal benefits can be reduced by two-thirds of what you receive from the pension. Dan notes, though, that if you were paying Social Security taxes on the wages from that government job, you can be exempt from the government pension offset. Dan concludes that the purpose of the rule is to avoid double-dipping, but it can still come as a huge shock to many retirees.

Be smart about your Social Security
You need to be prepared for the threats to your Social Security benefits. In our brand-new free report, "Make Social Security Work Harder for You," our retirement experts give their insight on making the key decisions that will help ensure a more comfortable retirement for you and your family. Click here to get your copy today.


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Dan Caplinger
TMFGalagan

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on Fool.com. With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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