Advisor Insights

Accounting for Social Security's Windfall Elimination Provision and Government Pension Offset

Helen Modly, CFP, CPWA

The Estimate of Benefits report, which is the baseline most planners use to project Social Security benefits in retirement, has several important embedded assumptions that can affect what any given worker will actually receive. For example, the amount shown on the report at various retirement dates assumes the worker will continue working at the same covered income from now until that retirement date. Should the worker leave the labor force, or work at a higher or lower wage before collecting benefits, the estimate could be off.

Windfall Elimination Provision
Social Security benefits are based on your Average Indexed Monthly Earnings, which is calculated by averaging your highest 35 years of earnings up to age 60, indexing them for inflation, and dividing by 12.