How To Avoid Government Pension Offset

The Government Pension Offset (GPO) is a rule that affects public employees who are eligible for both a government pension and Social Security benefits. It reduces Social Security spousal or survivor benefits if the person also receives a government pension from work where they did not pay Social Security taxes. If you’re concerned about the GPO and want to avoid or minimize its impact, here are some steps you can take:

✅ 1. Understand the GPO

Before trying to avoid the GPO, it’s important to fully understand how it works. The GPO reduces your Social Security spousal or survivor benefits if you receive a government pension from work that was not covered by Social Security. Specifically, the GPO reduces your Social Security spousal benefit by two-thirds of the amount of your government pension.

Example: If you receive a $1,500/month government pension from a non-Social Security-covered job, two-thirds of that ($1,000) would be deducted from your Social Security spousal or survivor benefits.

✅ 2. Work in a Job Covered by Social Security

The best way to avoid the GPO is to ensure that you work in a job that is covered by Social Security for a significant portion of your career.

If you work in a non-Social Security-covered job, such as some state or local government jobs, and you do not pay into Social Security, you may be subject to the GPO.
If possible, consider switching to a position that participates in Social Security. This will help you avoid the GPO’s impact because you will be paying into the system and will be entitled to full Social Security benefits.

✅ 3. Minimize Your Government Pension

If you cannot switch to a Social Security-covered job, consider ways to minimize your government pension to reduce the impact of the GPO:

Opt for a smaller pension: Some government jobs allow you to choose the size of your pension benefits. If possible, selecting a smaller pension could reduce the amount by which your Social Security benefits are offset under the GPO.
Consider contributing to a supplemental retirement plan (like a 401(k) or 457(b)) if your employer allows it. This can help supplement your income in retirement without affecting your Social Security benefits.

✅ 4. Work for 30 Years in a Social Security-Covered Job

If you have worked for a minimum of 30 years in a Social Security-covered job (and paid Social Security taxes), the GPO may not apply to your Social Security benefits.
Having 30 years of Social Security-covered earnings (in jobs where Social Security taxes are withheld) helps you avoid the offset, as the amount deducted will be lower or potentially not applicable at all.

✅ 5. Delay Taking Your Social Security Benefits

If you are still working, you might choose to delay claiming your Social Security benefits until after you retire, as waiting until your full retirement age or beyond can increase your monthly benefits.
By delaying your Social Security claim, you may have more time to reduce or eliminate the impact of the GPO by either reducing your government pension or increasing your work history in Social Security-covered employment.

✅ 6. Check for a Windfall Elimination Provision (WEP) Adjustment

In addition to the GPO, you may also be subject to the Windfall Elimination Provision (WEP), which reduces your Social Security benefits if you also receive a pension from a job that didn’t pay into Social Security.
However, the WEP and GPO are two different rules. If the GPO applies, it will offset your Social Security spousal or survivor benefits, while the WEP applies to your own earned Social Security benefits. You cannot avoid the WEP by working in a Social Security-covered job, but the GPO is specifically tied to pension income.

✅ 7. Consult with a Financial Advisor

A financial advisor can help you explore strategies for maximizing retirement income while minimizing the impact of the GPO. They can guide you on how to balance your pension, Social Security, and any additional retirement savings or benefits.
If you are nearing retirement and the GPO will significantly affect your income, a professional advisor can also help you assess whether buying additional Social Security credits or making adjustments to your pension will help.

Summary: How to Avoid the Government Pension Offset (GPO)

✅ DO This	🚫 AVOID This
Work in a job that is covered by Social Security	Work in jobs that don’t pay into Social Security
Minimize your government pension, if possible	Accumulate a large government pension without considering Social Security
Work for at least 30 years in a Social Security-covered job	Delay working in Social Security-covered employment until later in life
Delay taking Social Security benefits if possible	Claim Social Security early without considering the impact of GPO
Consult a financial advisor for personalized advice	Ignore the long-term impact of pension and Social Security coordination