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WEP Impact Calculation Factors

big windfallIn this blog we’ve covered the Windfall Elimination Provision (WEP) from many different angles. Here we’ll go into some more depth on the actual calculation of the WEP, including how some of the factors are determined.

As you are likely aware, the Windfall Elimination Provision or WEP impacts your Social Security benefit when you are receiving a pension based on work where Social Security tax was not applied to the earnings. The point of WEP is ostensibly to act as an offset, since the reason no Social Security tax was applied to the earnings is because the pension is intended to replace Social Security benefits for that worker. WEP impact is applied as a reduction to the first bend point of the calculation of the Primary Insurance Amount. (Calculation of the PIA is explained further here.)  

WEP Impact Calculation

For calculating WEP impact, it is important understand a few things about how Social Security views your pension.

First of all, the pension must be based on your earnings from the non-SS-covered employment, and not simply on your years of service.

The pension must also be your own pension, not the pension of a spouse or someone else. In other words, receiving a survivor pension from a non-SS-covered job in itself will not trigger WEP impact to your benefits.

The pension amount for calculation is considered as a monthly benefit. If the pension is paid on a different schedule such as quarterly or in a lump sum, Social Security will determine a monthly amount based upon the amount you’re receiving (or received) on the alternate schedule.

WEP impact is computed based upon a single-life annuity (unreduced) rather than on an amount of annuity payment that has been reduced to provide a survivor annuity.

When WEP impact is calculated, the amount of the pension is considered first. If 1/2 of the pension (based on the parameters given above) is more than $413 (for 2015), then the maximum WEP impact is limited to $413. Each year this figure is increased with the bend points.

On the other hand, if the pension is less than double the maximum WEP impact ($413 in 2015), then the WEP impact is reduced to half of the amount of your pension (as a monthly amount).

In addition to the factors above, WEP impact is further adjusted if you have had substantial earnings over your lifetime from a job that was subject to Social Security tax. If these substantial earnings were received for 21 or more years, the maximum WEP impact is reduced by 5% for each year more than 20 that you received the substantial earnings.

In all cases using the figure of 50% of your pension amount and/or 50% of the first bend point, the larger of the calculated benefit is the amount you will receive.

Below are a couple examples to help explain how this works.

Example 1. Rick is due to receive a lump sum pension from his work for the state government. This lump sum benefit calculates to a monthly pension amount of $300. Rick also worked part-time for 20 years in a job that was covered by Social Security. He is due (before WEP calculation) a Social Security benefit of $900 per month.

Rick began receiving Social Security benefits earlier this year at his Full Retirement Age. When he receives the lump sum from his state pension, WEP impact will apply to his Social Security benefit.

Using the numbers we referenced above, we calculate two amounts: when we reduce his SS benefit by $413, the amount is $487; reducing his SS benefit by 50% of the pension amount (calculated at $300/month) the resulting amount is $750. The higher of the two figures, $750 is what Rick’s WEP impacted Social Security benefit will be.

Example 2. Brad worked alongside Rick for several years. However, Brad, being a more highly-skilled worker, has a pension coming from the state government in the amount of $1,400 per month. Brad had the same part-time job as Rick, which garnered him a Social Security benefit of $900 per month before WEP impact.

Running the numbers for Brad, reducing his SS benefit by $413 we come up with $487; reducing his SS benefit by 50% of his pension amount ($1,400/month) we come up with $200 ($900 minus $700). So the higher of those two amounts, $487, is what Brad will receive in Social Security benefits after the WEP impact.

Example 3. Freddy worked the exact same job as Brad, earning the monthly pension of $1,400. The difference is that Freddy worked a different part-time job, at which he earned substantial earnings for 24 years, and his Social Security benefit (before WEP impact) will be $1,200 per month.

To run the numbers for Freddy, instead of $413 we’ll have to adjust this figure, since Freddy had substantial earnings for more than 20 years. In fact, the four additional years (above 20) of substantial earnings results in reducing the WEP impact figure by 5% per year. So for the first calculation we reduce Freddy’s Social Security benefit by only 30% of the first bend point, or $248 for 2015, resulting with $952; again, subtract 50% of his non-SS-covered pension ($700) and we get $500.  The higher amount, $952, is what Freddy will receive in Social Security benefits.


  1. Ela Szesz says:

    reporting foreign pension for web purposes should be “Gross pension or Net pension” because it make me confused

    1. jblankenship says:

      I can think of no circumstance where you would use net pension – the gross pension is your compensation, so that’s what would be used to determine WEP impact.

  2. Daniel says:

    I am a US citizen and already have enough credits (i.e. more than 10 years) to qualify for SS. I also worked in Japan for several years and paid pension into their system. Because I left Japan permanently, I am eligible to apply for a “lump-sun withdrawal payment” – basically getting back the pension payments I made during the final 3 years in Japan and also effectively severing my ties with the Japanese pension system.

    (1) Is this type of payment still considered a pension payment from a foreign government and therefore trigger WEP impact on my US SS benefit?

    (2) If so, is it fair to say that since the reduction in my US SS benefit will be capped at 50% of this lump-sum payment, there is really “nothing to lose” on my part for going ahead with this lump-sum pmt from Japan…?

    (3) How is the max 50% reduction with respect to my monthly SS benefit calculated since it is a lump sum (instead of a monthly amount)?

    Thank you very much in advance!

    1. jblankenship says:

      Answering your questions by number:
      1) Yes, this will likely be considered a pension payment that would trigger WEP
      2) Yes, with the 50% limitation, there’s generally no real downside to taking the pension
      3) SSA converts the lump sum into a pension based on your age when you take the lump sum amount. If you live longer than the schedule of imputed monthly pension payments, your WEP impact should be eliminated.

  3. mind2120 says:

    How (and how often) is WEP calculated for foreign currency? Is it a one-time conversion? What if the foreign exchange rate changes drastically from year to year?

    1. jblankenship says:

      I believe it’s a one-time check. You would need to talk to SSA to get more details on how that works when the exchange rate changes significantly.

  4. I get a TRS pension from Illinois and started taking my Social Security benefit in October of 2015, and it was reduced by the WEP formula applied at a 55% rate because I had 23 years of substantial earnings. Recently I found out I am supposed to report to Social Security when my TRS pension increases, My question is, how much will my social security be reduced because of the increase in my TRS pension. Is there an automatic recalculation and if so, does it use my Net TRS monthly pension or my Gross monthly pension? Or is there another formula?

    1. jblankenship says:

      No, the amount of your pension should not have an impact on the SS benefit – assuming it’s more than 50% of your unreduced SS benefit already. Not sure why they request your TRS pension increase amounts… At least from my understanding it shouldn’t make any difference.

  5. 4DWB says:

    I get a state govt. pension of about $4,000/mo for a job I got when I was 21 years old. I only had a few years of part time work before that and retired at 41.

    My wife will receive a decent SS amount (if it’s still around) when she reaches full retirement age.

    At this point, since I have basically no SS years under my belt, it seems unlikely I will get 20 years of earnings in and don’t even plan to try at this point.

    I tried to do some preliminary calculations on a spousal benefit, but it looks like my offset would completely eliminate it due to the size of my pension.

    At this point, if I wanted to go back to work it appears that I’d have to pay in to SS but I wouldn’t really get anything back from it, AND I won’t get anything from a spousal benefit. Is that right?

    1. jblankenship says:

      No, if you develop a 40-credit record with Social Security you will receive *something* back (assuming the rules remain the same). If you have less than 20 years of substantial earnings, the SS benefit may be reduced by WEP, and as you say, any spousal benefit is likely to be eliminated by GPO.

  6. Sharon says:

    First of all, let me thank you for providing this much needed information on the effects of the WEP and GPO. I have been studying this for years, knowing it was going to affect me. Your information is some of the best I’ve seen.
    I am currently receiving retirement benefits from TRS (Teacher Retirement of Texas) and my husband receives Social Security, and this is what we live on monthly. We are saving every bit of his retirement savings and mine (in a SEP and IRAs) in case he predeceases me, as I will need to make up for the loss of his $2000 a month SS benefits. I have SS earnings, but less than 20 years worth, making them subject to the WEP. My original plan was to not file for SS benefits until I absolutely needed them (I.e. my husband passes before me) but now I’m not so sure. Is there a point when it doesn’t pay to wait to file for SS benefits for me?
    Here are the particulars of my situation:
    I receive a teacher retirement annuity of $3,947 a month
    My SS earnings at FRA (at 66 in Jan 2020) would be $994
    My husband’s SS earnings are $2,000 a month
    We have about $600,000 in retirement savings ( SEP and IRAs)
    Thank you for your help!

    1. jblankenship says:

      In order to maximize your Social Security benefit, it’s the same as if the benefit was not impacted by WEP. You have to take into account how long you might live. If you assume you’ll live past approximately age 81 then delaying SS benefits to the latest date is likely going to provide you with the most benefits over your lifetime.

  7. Anthony says:


    Thanks for providing a valuable resource for folks trying to understand this very complicated area of US social security rules and regulations.

    I am currently collecting a pension from a UK private pension plan of about $630 a month. I am also eligible for but have not claimed United Kingdom social security of about $680 a month (my eligibility for this amount is due to the fact that I made my own voluntary contributions for several years, while I was working and subject to SS withholding in the USA, in order to secure this amount of UK state pension).

    I am still working in the USA and have already accumulated (including 2017) a total of 27 years of significant earnings as defined by SSA. I expect to work for another three years which will give me 30 years of significant earnings.

    I plan on drawing USA social security in 2018 at age 66 and 7 months in May 2017 when I will have accumulated 28 years of significant earnings by this date.

    My recent SSA notice indicated my FRA benefit as $1,280. I expect I’ll be subject to the WEP adjustment, but just how much? Also, if I work for another three years will the adjustment disappear completely year by year and be gone by year 2021?
    And do you ever recover previous year WEP adjustments once you get to 30 years of significant earnings?

    I would sincerely appreciate any help in understanding any financial impact of WEP so I can try to make any necessary adjustments to my retirement plans.


    Kind regards,


    1. jblankenship says:

      With 28 years of substantial earnings, your WEP reduction should be no more than approximately $80 per month. Once you have earned the additional 2 years of substantial earnings, the WEP impact will go away.

      Unfortunately there is no retroactivity to recover the WEP impact from prior years – during that period when you were receiving benefits you did not have the requisite 30 years of earnings. It only applies once you have each subsequent year of substantial earnings.

    2. Pete says:

      If you don’t want to pay the WEP, then delay collecting your SS until you have the 30 years in. This will also benefit you by getting a much larger SS check.

  8. Maria says:

    After the WEP adjustment, does a person receive less from social security plus pension (combined) than they would have if they had been contributing to social security instead of accruing a pension? In other words, does the adjustment just bring a person back to where they would have been if the original estimate of monthly social security payment had been based on actual annual income rather than just Social Security income?

    1. jblankenship says:

      To model this, we’d need to know the amount of income received through the years (each year) from the non-SS-covered job, as well as the amount of the pension in relation to that income. Then perhaps we could come up with an estimated SS benefit based on that income. It’s likely that the pension is more generous than the SS benefit, but it really is a difficult thing to determine without going through the exercise I mentioned.

      The end result is that the WEP adjustment can never be more than 50% of the related pension, nor more than 50% of the possible (pre-WEP) SS benefit.

      I hope this helps –

  9. Gregory Barton says:


    I took a job in Australia in my late 40s. My question is this: I pay taxes in Australia for an aged pension and no longer into the US SS system. But I cannot draw the aged pension unless my assets here drop below around 500,000 Australian dollars (around 400,000) Australia dollars. Since I will have more than the minimum asset and thus cannot draw the aged pension here in Australia, does that mean the WEP does not get triggered, and I can have my full SS check from the United States?

    1. jblankenship says:

      You’ll want to confirm it, but according to my understanding if you’re not receiving (or eligible to receive) the foreign pension, WEP is not in effect. So you should be eligible for the unreduced US SS benefit.

  10. Angela says:

    Mr. Blankenship,

    I will begin collecting my Teacher Retirement (early) at 55. That amount will be 556.00 and I did not pay into Social Security for that pension. I have other employment covered by SS with 26 years of earnings that will offset my WEP reduction. How do I calculate the amount of the WEP reduction if I file at 62 or at 67? Is the maximum amount set (or 1/2 of pension not covered whichever is less) at ELY when I turn 62 whether I collect at 62 or 67 (my FRA)? I do understand that I would have more of a reduction if I delay and file for SS at 70.

    Thank you.


    1. jblankenship says:

      When WEP impacts you, the maximum impact is the lesser of 50% of your pension that invokes WEP or 50% of the first bend point for your Primary Insurance Amount. In your case, assuming that your SS benefit will be greater than the Teacher’s Retirement pension, the maximum reduction will be half of the $556 pension amount.

  11. Bob Jennings says:

    2 Questions:

    1) For 2 pensions which could cause a WEP benefits reduction, are the pensions lumped together, or is the reduction figured separately for each?

    2) For a WEP benefits reduction of $360, suppose a person elects to not file for SS benefits at age 66, but instead waits until age 70 to do so. In the meantime he collects his pension (or pensions), say, from age 62 until age 70. At age 70 WEP works to reduce SS benefits, but is it the same amount per month that would have been calculated roughly 4 years earlier at age 66?

    1. jblankenship says:

      1) I believe all pensions being received are added together to determine WEP impact.
      2) This is complicated – Because the WEP reduces your PIA (Primary Insurance Amount), which is the amount of benefit you are eligible to receive at FRA, as your benefit increases, so does the impact of the WEP. If your PIA is $1,000 and your WEP reduction is $200, at FRA your SS benefit would be $800. At age 70 (assuming 66 as FRA) your SS benefit would be $1,056, whereas if there was no WEP the SS benefit would have been $1,320. This is a reduction of $264, rather than $200.

      1. Bob Jennings says:

        This is a bit strange, and maybe you’d have a brief comment on the “50%” issue:

        I used the Social Security site calculator (link below), and using certain data came up with $887/month for SS benefits at age 66, and $1171/month for benefits at age 70, WITHOUT inputting a non-covered pension. WITH a non-covered pension of $720, age 66 benefits were reduced to $527 (a WEP of $360), and age 70 benefits were reduced to $695 (a WEP of $476). The age 66 WEP is thus 50% of the non-covered pension, but the age 70 WEP is about 66%. I thought the WEP was limited to no more than 50% of the monthly pension amount? (Or is this just a calculator error, as the site does note “the WEP calculation could be incorrect”?)

        The more I think about it, the more it’s a ridiculous law, since most of those non-covered pensions are Federally taxable, resulting in less dollars to a retiree.

        Calculator site link:

        1. jblankenship says:

          WEP reduces your PIA. At Full Retirement Age, your benefit is equal to your PIA. If you file at age 70 (assuming FRA is 66) your benefit is 132% of your PIA.

          So, if your PIA is reduced by WEP, the amount of reduction is greater as your benefit increases with delay credits after FRA.

          For example: your PIA before WEP is $1,000, and the WEP reduction is $200, so your reduced PIA is $800. If you file at FRA your WEP reduction is $200.

          However, if you delay to age 70 to file, your PIA is multiplied by 132%, so your benefit is $1,056, which is a reduction of $264 from the $1,320 that your benefit would have been without WEP.

          Apologies for my lack of clarification earlier.

          1. Bob Jennings says:

            No apologies necessary, and thank you very much for the clarification!

  12. Jaime says:

    HELP! Totally confused with WEP (& GOP as well). I’m 59, single, recently retired from County of Honolulu (government pension @ 3K mo), to recieve @ 62yo SSA benefit of $450 (accrued from other employment,)… where do i stand with regards to WEP? Does being single play into it? or irrelevant? Went to a retirement seminar and the speaker said to expect to collect 40% of what the stated SSA# is. So, in my example $450 x 40% = $180 ??? That seems ridiculous but?? I fed the system like a regular person too, yet i’ll be penalized because i collect a government pension? Thanks in advance

    1. jblankenship says:

      The largest reduction to your SS benefit from WEP is 50% of the benefit amount or 50% of your pension amount, whichever is smaller. (This assumes that your SS benefit is less than double the maximum WEP reduction, which is $428 in 2017.) So if your SS benefit at your FRA age is $450, the least your WEP-affected SS benefit would be is $225.

  13. Jenny says:

    Hi. I’ve talked to everyone you can imagine, and received only contradictory information, so I’m wondering if you can help: I am a part-time employee at a California State University. I am arranging for a service credit purchase so that I will be vested in my CalPERS account and thus eventually receive a retirement pension from the State. I’m trying to determine if I’ll be affected by the WEP or not, and everyone I speak to (HR dept., 457 advisor, CalPERS, SSA) has a different answer. The SSA (which unfortunately does not always give out accurate information), says that, since I will not have 20 years of substantial earnings, I will be hit by a 40% WEP reduction to my SS benefits no matter what. Others have said that since, during the years in which my employer paid into the CalPERS account, they also paid social security, I won’t be affected by the WEP. My pension will likely be quite small: 400 a month. But the SSA said this doesn’t matter–it will still be reduced by 40%. Do you know how things actually work? Without 20 years of substantial earnings, will I be stuck with the WEP problem despite the years of paying into the pension also being years when I did pay into social security? (Just not enough, apparently?)

    1. jblankenship says:

      If you were paying Social Security tax on the job that is generating the pension, you should not have WEP impact. This is regardless of how many years of substantial earnings you have – the fact that the SS tax was applied to your income, the same income that’s generating the pension, there should be no WEP. However, if you do a service credit purchase, this will represent a pension that is not based on income that was subject to SS tax – so naturally the waters are muddied with that credit purchase. My guess is that you’ll have a potential WEP impact of something less than 50% of the amount of the pension (50% of the pension is the maximum WEP).

  14. Kevin says:

    I am eligible to receive Canada Pension which has a reduced benefit based on when you first draw it similar to Social Security. The reduction is approximately 30% if you take it at 60 instead of 65. For purposes of the WEP, what number do they use – the value at 60 when I am first entitled to it, the value at 62 when I am first eligible for Social Security or the actual value I receive when I first draw it ie could I avoid WEP until age 70 by not drawing CPP until then?

    1. jblankenship says:

      My understanding is that you don’t have the WEP impact until you start taking the pension that causes WEP. So if you delay taking the Canada pension, you shouldn’t have any WEP impact until you start it.

      1. Mary Connolly says:

        What about doing the opposite? Starting the Canadian pension at 60 (for a reduced monthly amount of $325) and then delaying Social Security until 70? How do they determine the WEP amount? is it still 50% of the Canadian pension? They wouldn’t “backdate” the amount…I guess is what I am asking.

        1. jblankenship says:

          That strategy would play out as you describe – the WEP reduction would be based on the pension amount, reducing your PIA by no more than 50% of the pension.

          1. Mary Connolly says:

            Thanks. And so the WEP reduction would only begin at the time the Social Security pension was started? With no penalty for having collected CPP for 10 years already?

          2. jblankenship says:

            Yes – nothing can happen until you start benefits, and whatever happened before you started benefits has no bearing on the benefits.

  15. Noel says:

    From SSA proration chart, on a lump sum of $86K the sum is factored for WEP purposes by dividing $86K by 137.3, based on age. This gives a monthly pension figure of $626.50 which is totally unrealistic in reality, nowhere can you buy a pension that gives you that amount.
    How do they come up with such a figure?

    1. jblankenship says:

      That’s a good question for SSA. The figures are determined actuaries and don’t represent a pension or annuity, but rather a payout over an expected life-span.

  16. Duane Essex says:

    Hi Jim: I have a pension form the County based on 14.86 years of service. During 13.39 of those years I paid into Social Security, as required by the County. However I did not pay into Social Security for the balance of 1.47 years since those were extra help and part-time work over a span of eight years. But the County allowed me to “buy back” the 1.47 years of service. Both the 13.39 and the 1.47 years carry equal weight in calculating my County pension of $2392.42/mo. The pro-rate amount for the 1.47 years is $237.92/mo.I also have a separate pension of $112/mo. based on other part-time work. So I feel that I receive about $349.92 ($237 + $112) from my non-SS pension. When I applied for Social Security at age 70 the un-WEP-corrected amount was $1738.00. After the WEP correction the SS agent indicated that the amount would be approximately $1250, close to $500 reduction I’m my Social Security check, more than I receive from non-SS benefits.I am waiting for the letter to show the exact amount. The agent said that he had to use the entire amount of the pension for calculation. I will appeal but do you know why they would take more that I earn from my non-SS pension?

    1. jblankenship says:

      You need to take your calculations to them to show what pension is from non-SS work. Otherwise, if the pension is paid in a single amount every month there is no way to know what is covered and what is not.

      Best of luck to you – I think you’re correct (as long as the facts back you up) in your thinking about this.

  17. Donna says:

    I retired from teaching in TX in June 2016. I am getting over $3K a month from my TX teacher retirement. I will turn 66 next month and haven’t applied for social security yet. My 2016 soc. security statement says my full payment would be $843 based on 18 years of employment before coming to TX. The statement says the maximum amount the wep reduction can be for 2016 is $428. I am trying to figure out how much the reduction is now in 2017. Will the reduction amount go up every year even if I ‘m not working? I thought my soc. security payment would go up after 66 but if the wep reduction goes up too there’s no point in waiting to take my soc. security. Is that right? I talked to a rep and she couldn’t give me the amount I would get if I apply at 65 or 66. She said another local rep would call me but that hasn’t happened yet.Thanks for your help.

    1. jblankenship says:

      The $428 figure is the maximum amount for 2017 as well. You need to have the SSA folks work with you to tell you what your WEP reduction will be though, as it’s related to your date of birth.

  18. Kim says:

    Hello, I’m not sure this thread is still active but I figured it was worth a shot.

    I have 19 yrs of substantial earnings and 10+ working in S. Korea where i’m eligible in few months for the national pension for amount of $300. Currently I’m eligible for $700 in the states. So if my calculations are correct, I would be eligible for 550 in the states?

    Also, is there anyway to add those 10 years on to 19 years? or is it just worth it for me to take a lump sum in S.Korea?

    Thank you in advance!

    1. jblankenship says:

      Your calculations seem proper, can’t say for sure without seeing all of your documentation though.

      There is no way to add together working records from SK and US – great thought, but not available.

  19. richard alans says:

    To clarify– 30 years of covered earnings for US social security so that the WEP doesn’t kick in– unless I take my Canadian CPP

    1. Pete says:

      You want to take both pensions if eligible, as the net total amount is more than simply taking one.
      If you have 30 years of “substantial earnings” in SS, then there is zero WEP.

  20. richard alans says:

    Hi Jim,
    I’m a U.S. citizen, age 60 living in Canada for the past 20 plus years. I have 24 years of substantial earnings in the U.S. and about the same in Canada. My question is, I read there’s a way to get my income earned in Canada counted as substantial earnings so that I would reach the magic 30 years of earnings. Do you know if this is true?

    1. jblankenship says:

      I don’t know of a way to do this – in order to do so you’d have to either make your earnings in Canada subject to the US Social Security taxation in some fashion, or perhaps utilize a totalization agreement such that you would not receive credit for your Canadian income against Canadian retirement benefits and apply that credit against your US income.

      I don’t know that such a totalization agreement exists with Canada – I believe that some countries have arrangements with the US, but don’t know if Canada is one. Your best bet is to talk to the SSA and Canadian authorities to determine what the best action will be for you.

    2. Pete says:

      Just collect both pensions, the SS one will be taxed for only 85% of , just like they would do here in the USA.
      There is a Canada-USA tax treaty on Pensions,
      So the SS will not be taxable in the USA , just Canada (since you live there).
      This avoids double taxation.

  21. Suzanne says:

    Hi, I’ve been reading some of the questions posted in order to figure out what is happening with the WEP that I got blasted with back in 2015. I received full retirement from SS and also retired here in Israel after working for a company for 12 years and also receive monthly Pension from the Israeli government plus I received a lump sum pension from the company and in 2015 received the wonderful news that SSA applied the WEP to my benefits. My question is how long will this continue? my amount was (before WEP) $741 a month and after WEP $318…My lump sum pension was approx. $17,000. I’m 69 yrs. old and want to know if I’ll ever see the full retirement from SSA again? I never received an explanation as to the details of the period of time will elapse. Any help with this would be very much appreciated. Shalom

    1. jblankenship says:

      It is likely that this WEP impact will continue for the rest of your life, being based on all of the pension money from the lump sum and the Israeli government pension.

  22. W. Colly says:

    I have a rather complex situation. I worked for a U.S. corporation overseas from 1981 to 1986, paid Social Security taxes on that income, and then left that company for 2 years. I rejoined that company in late 1988. In 1989 that company became a foreign owned company. After that change no Social Security taxes were paid on my income. I took early retirement from that company in 2004. I rolled over a lump sum distribution of what would have been my pension from that company to the company 401K plan. That lump sum pension rollover was based on salary earned from both the period I paid Social Security tax and the period in which I did not. Since 2004 I have been taking regular withdrawals from the 401K plan. To further complicate matters I have rolled over a portion of the 401K into a traditional IRA and a Roth IRA. Do withdrawals from a 401K or a traditional IRA count as being a “pension” for Social Security WEP calculations? Is the lump sum rollover of the original pension what is used for calculating WEP, even if you can’t identify what portion of that was based on income Social Security tax was paid on?

    1. jblankenship says:

      You’re right, this is a rather complex situation. My guess is that the pension that was rolled over should be the only component of your foreign pension that would cause WEP impact. You should gather all of your information together and take it to you nearby SSA office and work through the situation with them in order to know for sure what your impacts will be.


  23. Vivian Mitchell says:

    I have worked for the Fed Gov for 32 years this June 2016. I am 68 years old. I have also worked a second job. My first 19 years of work with the Fed Gov under CSRS. I wasn’t required pay into SS. I quit in 1997 and came back to work for the Fed in 2002 under CSRS Offset. I had substantial earnings from another job prior to starting to work for the FED. I have always paid SS on the second jobs. On 31 Dec. 2015 I have 29 years of substantial earnings with SS. I confirmed with SS that 2015 was my 29th year of substantial earnings. I started getting SS payments in 2015 and I am still paying in to SS every paycheck on both jobs. I am thinking that I will retire from my Fed job 31 July 2016. I will have approximately $23,000 in substantial earnings from my FED job by that date. I will continue to work my second job (I sell real estate and do appraisals) until I am 70 or longer if my health holds up. So from what I have read after I have 30 years of substantial earnings I am out of WEP. Am I correct? When I retire I will get a leave and earnings statement with my total gross and net income. Do I send a copy to SS so they won’t dock me for WEP at 29 years when I will have earned enough in 2016 to cover substantial earnings test even if it is $23,000 to be out of WEP?

    1. jblankenship says:

      In your case, you will be receiving a WEP-triggering pension beginning in August of the year that started with you having 29 years of substantial earnings, so likely there will be some amount of WEP impact due to this fact. This is because you will not have the credit of the 30th year of substantial earnings on your record until the end of 2016. Beginning with your 2017 benefits you will have 30 years of substantial earnings, so your 2017 benefit will not be affected.

      I could have this wrong, so definitely check it with SSA to be certain.


      1. joseph gangloff says:

        Substantial earnings after the first year of eligibility (62) do not count towards the 30 year total. After age 62, you cannot add to the 30 year WEP computation. The writer say he is 68. There is a significant WEP impact.

        1. jblankenship says:

          Interesting. Do you have a reference to back that up?

          My information indicates otherwise – specifically that “… all wages on the earnings record, including military service wage credits, from 1937 to the present…” are used to determine Years of Coverage for the purpose of WEP application (POMS RS 00605.362). I have also confirmed this with a SSA representative.

          1. joseph gangloff says:

            You are correct. Is it possible to delete my misinformed comment? Thank you for clarifying this issue. I apologize for sowing bad information.

          2. jblankenship says:

            Please send an email to with the details of the comment (date/time) and we’ll get it taken care of.

  24. kstinmb says:

    I’m receiving a pension from the German gov’t for 7 year’s work there in the 1980’s for which I did not pay SS tax. I also have 34 years of “substantial earnings” for which I DID pay SS tax according to SSA’s own report of my earnings. Will I have no WEP impact when I file for the retirement beneft? Is it that simple? Thanks,

    1. jblankenship says:

      If you have more than 30 years of substantial earnings, there would be no WEP impact to your benefits.


  25. Kathy says:

    Is a 401a, accumulated under non-covered SS employment, considered a pension for WEP purposes? How is the monthly amount calculated if the withdrawals are self-directed and the amount of the account is subject to fluctuating market conditions? How will delaying receiving SS benefits or making 401a withdrawals affect the amount of WEP reduction? Thank you for assistance. I have not been able to find anyone who can answer these questions.

    1. jblankenship says:

      If the 401a is the “primary” retirement vehicle under this particular employment, then it is considered a pension for WEP. There is a table found at the link here that explains how a lump sum or non-annuitized pension is factored for WEP purposes.


      1. Aloha Jim

        For those with a lump sum pension, will the WEP reduction continue throughout one’s life?

        1. jblankenship says:

          No, when your WEP reduction is calculated against a lump sum, there is an actuarial “length of life” applied to the lump sum to determine the amount that should be considered the annual payment figure. Once that period of time has elapsed if you’re still alive, WEP should no longer apply. SSA will have to provide you with the details on the period of time for your particular situation.

          1. Kathy says:

            Thank you very much.

    2. Kathy says:

      Thank you for your help. One more question. Is the bend point used based on year of eligibility (age 62) or when you actually start receiving benefits? Thank you again.

      1. jblankenship says:

        Bend points are based on the year you reach age 62.


        1. Kathy says:

          Aloha Jim

          Me again…on the SS website on the page entitled: Retirement Planner: How the Windfall Elimination Provision Can Affect Your Social Security Benefit, there is a note above the chart of maximum amounts for WEP reductions. It reads:
          Note: If your retirement benefits start after full retirement age or your non-covered pension starts later than your eligibility year, the WEP reduction may be greater than the maximum shown in the chart.

          Can you give some examples of how this would apply?

          Thank you for your patience.


          1. jblankenship says:

            WEP actually reduces your PIA, not specifically your benefit. So if your PIA is $2000 and WEP reduces it by $400 (just for example purposes) to $1,600, and you have delayed your benefit beyond FRA to age 70 – your benefit without WEP impact would be $2640. With the WEP impact your benefit is $2,112. So the reduction due to WEP is $528, while the maximum WEP reduction to the PIA (as listed in that chart you saw) would be listed as $400.


    3. I just realized I have a second small account that is subject to WEP. I am thinking of rolling over this account into my larger account subject to WEP so that the mess is somewhat consolidated. Any cautions to this approach? Any timeline I should consider? I will be 70 next year. Many thanks

      1. jblankenship says:

        None that I’m aware of. This is probably a good move, as you say, to lessen the complications.

  26. Michael says:

    If the Pension increases (some pensions have COLA options), is WEP recalculated every time the pension increases? Or say, if the pension starts at 70, how would the rule keeping WEP from only affecting up to 50% of the pension work if the person were filing at 67?

    1. jblankenship says:

      That’s an excellent question, Michael.

      The WEP impact is only calculated the first time that it is applied. Annual increases to the pension do not change the impact of WEP.


      1. Michael says:

        Thanks for the answer! :)

      2. Bob Jennings says:

        What about if a pension goes down (as, e.g., when unions have asked retirees to agree to a pension reduction)?

        1. jblankenship says:

          If the pension reduces you can request that SSA re-calculates your SS benefit with the new information.

  27. Wendy says:

    It would be very helpful to see the formula written out. I am trying to duplicate the numbers Freddy’s example. I can’t make it come out with the same numbers. My own WEP numbers are very close to the Freddy’s example.

    1. jblankenship says:

      The full impact of WEP is $413 per month and Freddy has earned 24 years of coverage with substantial earnings. 10% per year is removed from the full impact of WEP for each year over 20. 4 years times 10% = 40%. 40% of $413 is $165.20. The remaining WEP impact is $413 minus $165.20 or $247.80, which I rounded up in the example to $248.

  28. Ian says:

    Do you know how WEP is triggered or is it based on the ‘honor’ system of self reporting?

    1. jblankenship says:

      It will show up when you file your taxes if you don’t self-report.

  29. Ian says:

    At the risk of becoming a squeaky wheel, I wonder if there is clarification for my situation through this website. I will begin receiving a UK state pension in May of 2015. This pension is not earnings related, it is based on number of years of contributions. I began drawing social security in 2003. I became eligible for UK pension before becoming a US citizen, and qualified for Social Security on the accuulation of the necessary ‘quarters’. Does WEP apply to a pension earned as a UK citizen – rather than an American expat or US citizen working for a non contributing entity to Social Security?

    1. Ian says:

      Correction: I began drawing social security in 2013 not 2003.

    2. jblankenship says:

      To the best of my knowledge a UK pension will trigger WEP impact to your US Social Security benefit. For clarification I would suggest discussing this matter with a Social Security Administration representative.

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