Advanced Underwriting Consultants

Question of the Day – March 16

Ask the Experts!

The professionals at Advanced Underwriting Consultants (AUC) answer the tax questions posed by producers.  Here’s the question of the day.

Question: One of my clients is a retired employee of a state government.  She is collecting a pension from that employer that was designed as a replacement for social security benefits.  Can she also collect social security retirement benefits based on her spouse’s account?

Answer: Yes, but the benefit will usually be reduced.

Here’s what the Social Security Administration says about his kind of situation:

If you receive a pension from a federal, state or local government based on work where you did not pay Social Security taxes, your Social Security spouse’s or widow’s or widower’s benefits may be reduced….

Your Social Security benefits will be reduced by two-thirds of your government pension. In other words, if you get a monthly civil service pension of $600, two-thirds of that, or $400, must be deducted from your Social Security benefits. For example, if you are eligible for a $500 spouse’s, widow’s or widower’s benefit from Social Security, you will receive $100 per month from Social Security ($500 – $400 = $100).

For more information, visit the Social Security Administration’s website.

Have a question for the professionals at AUC?  Feel welcome to submit it by email.  We may post your question and the answer as the question of the day.