How much do you understand your Social Security Benefits
Many customers often ask varied questions though unable to receive precise answers. For instance, a client asked if it's possible to recoup reduced early retirement benefit benefits by taking a spouse's benefit later along with a lump-sum pension payment not covered by Social Security. The answer explains the effects of the Government Pension Offset and the Windfall Elimination Provision and suggests resources to get more information and assistance.
Miss X, a municipal employee asked, 'My municipal employer was in a Public Employees Retirement Association (PERA) then switched to a self-directed plan. I do not get a pension, but I have a lump sum saved in the employer plan. I am a double dipper. I am one-and-a-half years older than my husband and taking my Social Security at age 62, getting $465 instead of the $780 that I would get at 66?'
I am also planning on taking half of my husband's Social Security when he reaches 66 and claims his Social Security. If the same ratio as above applies, I will receive about the same amount that I would have received on my Social Security if I had waited until 66. Can you please verify that I am correct?
Clearly, not all individuals have fully comprehended social security benefits information. To answer the above question, Miss X is incorrect. When her husband retires she will be eligible to collect an excess spousal benefit based on his earnings record, which will then be reduced, due to the Government Pension Offset (GPO) provision, by two-thirds of the imputed pension from your non-covered employment, but only once you apply for your pension or take your pension in a lump sum. If the excess spousal benefit is positive, the GPO may wipe it out.
But the excess spousal benefit may be zero if her full retirement benefit, calculated subject to the Windfall Elimination Provision (which also is applied only after you take your pension) surpasses half of his full retirement benefit.
However, there are softwares available to help many people determine precisely what they will receive under such circumstances. Nevertheless, the Social Security office has all the appropriate answers to this question, provided you talk to one of their specialists called technical experts since they are the only people from Social Security one can truly trust to get the system's details right.
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