Benefit Offset

Dictionary Says

Definition of 'Benefit Offset'

A reduction in the amount of benefit payments received by a member of a retirement plan which may result when the member owes money to the plan.



Investopedia Says

Investopedia explains 'Benefit Offset'

A benefit offset is intended to adjust the retirement benefits the plan member receives, given the overdue contributions the member should have paid in the past. Essentially, the overdue contributions owed by the member are deducted from his or her retirement payments to ensure they are paid to the plan. This type of offset can also occur if the member is receiving retirement benefits from sources other than the plan. The U.S. Social Security Act provides for the withholding of up to 10% of a plan member's benefits to compensate for funds owed to the plan.

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Articles Of Interest

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  4. Can You Deduct Your IRA Contributions?

    We help you answer this important question, which is determined by whether you are considered an "active participant".
  5. Are the distribution rules for 401(k) and 403(b) plans the same as those for IRA plans?

  6. Retirement Savings Tips For 35- To 44-Year-Olds

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  7. 6 Retirement Savings Tips For 45- To 54-Year-Olds

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  8. 5 Ways To Stretch Your Retirement Budget

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  9. Saver's Tax Credit: A Retirement Savings Incentive

    Here's another reason to put money toward your retirement nest egg.
  10. Retirement Plan Tax Form 5329: When To File

    Read this if you've taken early distributions or owe excess-contribution or excess-accumulation penalties.

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