A pension provides a reliable source of income in your retirement years, making it easier to manage your expenses and enjoy the life youve always dreamed of. For most retirees, receiving a pension wont affect the amount of your Social Security payouts. You can enjoy both.
However, if your pension comes from a certain type of job, your benefits could be impacted. If youre retiring with a pension and Social Security, its important to determine whether your benefits are affected so you can plan for a solid financial future.
If you’re wondering if you can get both your pension and Social Security when you retire, I have good news: you can! But there are some important things you need to know, especially since big changes happened in late 2024.
As someone who has spent years helping people figure out how to pay for retirement, I want to explain everything in simple terms about getting both Social Security and a pension at the same time. Let’s dive in!.
The Basics: Social Security and Pensions Working Together
First, let’s make sure we’re on the same page about what these benefits actually are:
Social Security is a federal program that gives you money when you retire based on the jobs you had and the FICA taxes you paid. Most Americans can get in after getting 40 “credits,” which is usually 10 years of work.
Pensions are retirement plans that provide monthly income, usually offered by employers. Traditional pensions (defined benefit plans) guarantee specific monthly payments based on your salary history and years of service.
The short answer Yes you can generally receive both Social Security benefits and pension payments at the same time. However until recently, certain types of pensions could reduce your Social Security benefits.
Great News: The Windfall Elimination Provision (WEP) Has Been Repealed!
Here’s the big update you need to know: In December 2024, Congress passed the Social Security Fairness Act, which repealed the Windfall Elimination Provision (WEP). This is HUGE news for government workers and others with “non-covered” pensions!
What Was the WEP?
Before, if you got a pension from a job where FICA taxes weren’t taken out (called “non-covered” employment) and also got Social Security from other work, your pension amount could be cut by up to half of your Social Security benefit.
This primarily affected:
- Federal workers hired before 1984
- State and local government employees in non-participating systems
- Teachers in some states
- People who worked abroad
What’s Changed?
- The WEP reduction has been eliminated!
- The change is retroactive to benefits paid for 2024
- Affected beneficiaries will receive a lump-sum repayment for 2024’s withholding
- Most people should receive their retroactive payment by end of March 2025
- Regular monthly benefits at the new, higher amount should start in April 2025
The Social Security Administration is using an automated process to expedite these adjustments, though some complex cases might take longer to resolve.
Different Types of Pensions and How They Interact With Social Security
Not all pensions are created equal when it comes to Social Security. Here’s what you need to know:
Private Sector Pensions
If you worked for a private company where you paid Social Security taxes, your pension will NOT reduce your Social Security benefits. This includes pensions from companies like General Motors, AT&T, IBM, and most other private employers.
Government Pensions
For government employees, the rules depend on when you were hired and whether your agency participated in Social Security:
Federal Government Employees:
- Hired before January 1, 1984: You were likely covered by the Civil Service Retirement System (CSRS) and didn’t pay Social Security taxes. Previously, the WEP could reduce your benefits, but that’s no longer the case after the 2024 law change.
- Hired after December 31, 1983: You’re covered by the Federal Employees Retirement System (FERS) and paid Social Security taxes. Your Social Security benefits were never reduced by your pension.
State and Local Government Employees:
- Some state/local governments participate in Social Security, and employees who paid Social Security taxes won’t face reductions.
- Other state/local governments don’t participate. Previously, workers in these systems could face WEP reductions, but that’s been eliminated now.
Military Pensions
If you receive a military pension, you can also collect full Social Security benefits. Military service has been covered by Social Security since 1957, so service members pay Social Security taxes on their earnings.
Teachers’ Pensions
Teachers’ situations vary by state:
- Teachers in states where schools participate in Social Security (like New York) can receive both their full teacher’s pension and Social Security benefits.
- Teachers in states where schools don’t participate (like California, Texas, and Illinois) previously faced WEP reductions if they qualified for Social Security from other work, but that’s no longer the case.
The Government Pension Offset (GPO) Has Also Been Repealed!
The Social Security Fairness Act also eliminated the Government Pension Offset (GPO), which affected about 750,000 people who collected Social Security spousal or survivor benefits while also receiving a pension from government jobs that didn’t withhold Social Security taxes.
Previously, these spousal/survivor benefits could be reduced by up to two-thirds of the pension amount and could be eliminated entirely if that two-thirds exceeded the Social Security payment. That’s no longer the case!
Strategies to Maximize Your Benefits
Now that these major restrictions have been lifted, here are some strategies to make the most of your combined benefits:
1. Timing Your Benefits
You don’t have to start your pension and Social Security at the same time. Consider:
- Pension rules: Some allow collection as early as age 55
- Social Security rules: You can start collecting reduced benefits at 62, full benefits at your full retirement age (66-67 depending on birth year), or increased benefits if you wait until 70
If your pension provides enough income, you might want to delay claiming Social Security until age 70 to maximize those benefits (they increase by about 8% per year you delay).
2. Tax Considerations
Both pension income and Social Security benefits may be subject to federal income tax:
- Pension income is typically fully taxable as ordinary income (though a portion may be tax-free if you made after-tax contributions)
- Social Security benefits may be partially taxable depending on your “combined income”
| Filing Status | Combined Income | Taxable Portion of Social Security |
|---|---|---|
| Individual | $25,000-$34,000 | Up to 50% |
| Individual | Above $34,000 | Up to 85% |
| Joint filers | $32,000-$44,000 | Up to 50% |
| Joint filers | Above $44,000 | Up to 85% |
Receiving both pension and Social Security could push you into a higher tax bracket, so consider working with a tax professional to manage your tax liability.
3. Consider Working While Collecting Benefits
If you’re below full retirement age and earn above certain limits ($19,560 in 2023), your Social Security benefits may be temporarily reduced. Once you reach full retirement age, there’s no reduction regardless of how much you earn.
Your pension payments typically won’t be affected by continued work unless your pension plan has specific rules about returning to work for the same employer.
Common Questions About Social Security and Pensions
Does military retirement pay affect my Social Security benefits?
No, you can receive both your military pension and Social Security without reduction.
Does pension income count toward the Social Security earnings test?
No! Pension income does NOT count toward the Social Security earnings test, which can reduce your payments if you continue to work. Only actual wages or self-employment income count.
Do pensions affect Social Security taxation?
Yes. Pensions do count as income when determining whether your Social Security benefits are taxable.
Can I receive my pension and Social Security at the same age?
Not necessarily. Pension eligibility ages vary by employer and plan, while Social Security benefits can begin as early as age 62. You’ll need to check your specific pension rules.
Will my Social Security cost-of-living adjustments (COLAs) be affected by my pension?
No. If you’re eligible for Social Security COLAs, you’ll receive them regardless of any pension you collect.
Wrapping It Up
The biggest takeaway? You CAN collect both Social Security and a pension at the same time, and thanks to the Social Security Fairness Act passed in December 2024, the rules have become much more favorable for government workers and others with non-covered pensions.
Here are my final tips:
- Contact the Social Security Administration to understand your specific situation
- Ask your pension administrator about your options and timing
- Consider consulting with a financial advisor to optimize your claiming strategy
- Stay informed about any future legislative changes
Remember, retirement planning isn’t one-size-fits-all. Your best strategy depends on your unique financial situation, health, and retirement goals. But now, with the elimination of the WEP and GPO, many retirees will enjoy more income in their golden years than they previously expected!
Have you started planning how you’ll coordinate your pension and Social Security benefits? What questions do you still have? I’d love to hear from you in the comments!
Note: This information is current as of October 2025. While we strive for accuracy, retirement rules can change. Always verify details with official sources like the Social Security Administration.
Social Security reduction from GPO
If you receive Social Security benefits based on your spouses or widows earnings record, the SSA will reduce your benefits by two-thirds of your government pension. For instance, if you receive a pension of $2,400, youll see a $1,600 reduction in your monthly Social Security payout.
In cases where two-thirds of your noncovered pension is greater than your Social Security benefit, the SSA would decrease your benefit to zero. The SSA calculator can help you determine the amount of the Social Security reduction based on your monthly pension benefit. Why timing your Social Security matters Wondering when you should start collecting Social Security? Its one of the most important decisions retirees face. Consider these factors, including age, health, marital status and taxes.
How much will a noncovered pension reduce my Social Security benefit?
The Social Security Administration (SSA) figures out how much you should get each month by looking at your average monthly earnings from the 35 years when you made the most money, as long as you worked in “covered” jobs that paid FICA taxes. It then adjusts that amount based on specific percentages, or “factors. ” The result is your primary insurance amount (PIA).
Depending on how old you are when you file for Social Security, the amount you get may be more or less than your PIA. The Social Security Administration lets you set up an online account so you can see your past earnings and get an idea of how much your benefit will be based on when you start getting Social Security.
If you worked in a noncovered job, your Social Security amount can be reduced by the WEP or the GPO, regardless of when you first file for benefits: