How does the Windfall Elimination Provision work?
The WEP reduces the factor by which average earnings are multiplied to determine Social Security benefits. How much the factor is reduced depends on when the individual becomes eligible to retire and how many years of earnings he or she has accumulated. For example: Bob — a retired educator, who is currently 71 years old — worked for 17 years in the private sector and paid into in the Social Security system. Bob then decided to become a teacher and contributed to the California State Teachers’ Retirement System (CalSTRS). Bob worked for 14 more years as a teacher contributing to CalSTRS. According to the Social Security Administration, he earned monthly benefits of $540 per month for contributions paid into the Social Security system while he worked in the private sector. However, because of the WEP, his actual monthly benefits will be cut by $296 a month. Bob will receive only $244 per month from Social Security instead of the $540 he earned. The Government Pension Offset (GPO) — redu
