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LawTalk, Attorney
Category: Social Security
Satisfied Customers: 37855
Experience:  I have 30 years of legal and litigation experience, including representing clients before the U.S. Social Security Administration.
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My wife wants to take a lump sum distribution of her PERA

Customer Question

My wife wants to take a lump sum distribution of her PERA benefits of about $30,000.00, $10,000.00 of it will be rolled over into an IRA. How much will her spousal SS benefits be reduced? I just started receiving full benefits now, and I am 68. Paul Popoff
Submitted: 1 year ago.
Category: Social Security
Expert:  LawTalk replied 1 year ago.

Good afternoon Paul,

I'm Doug, and I'm sorry to hear of the confusion. My goal is to provide you with excellent service today.

When a person who is receiving, or eligible to receive, a social security benefit and they also have a government pension, social security will reduce benefit based on the amount paid by the pension. In the event that a lump sum is received, social security averages that distribution over the expected lifespan of the beneficiary.

In your wife's situation the $30,000 will be divided by the estimated life expectancy. Let's say that she is 66 now and the estimated life expectancy is to age 79---a total of 13 years. Social security divides the $30,000 by 13 years and then that number by 12 months in a year to get an average monthly PERA benefit of about $192. Social security will deduct about 50% of that from any social security benefit she would be entitled to.

So, if you wife takes a spouse benefit and receives half of your full retirement age benefits, social security will deduct about 50% of the $192, or $96, each month from her social security benefit.

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I wish you and yours the best in 2016,