Under the Windfall Elimination Provision, your Social Security retirement or disability benefit is figured using a modified formula when you are also entitled to a pension from a job where you did not pay Social Security tax. As a result, you will receive a lower Social Security benefit than if you were not entitled to a pension from another job. This provision can greatly reduce your Social Security benefits -- as much as 40%. And can unfairly impact those (particularly women) who started working for a public sector employer later in life. For additional information, please refer to Social Security Publication, “Windfall Elimination Provision.”
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