QUESTION:

I will be receiving a pension from my employer when I retire in three years. I've heard that when my Social Security benefits kick in (in twelve years) they will be lowered because of my pension. This seems unfair, since I paid into both of these plans.

ANSWER:

The reductions mainly affect people who didn't pay in to the Social Security system for a time, usually because they were working for government or other employers who weren't required to pay Social Security taxes. You may be able to settle into retirement with no pension reductions -- depending on whom you worked for.

If you worked only for private employers, you have no worries. You will get your full pension and Social Security benefits.

If you have worked for the U.S. government's civil service, for some state or local governments, or for an employer who wasn't required to pay in to the system, such as a foreign employer, your Social Security benefits could be reduced. The formula to calculate how big a bite will be taken is complicated. But the Social Security Administration attempts to explain it in SSA Publication No. 05-10045, online at www.socialsecurity.gov/pubs/10045.html.