Both my husband and I are past FRA. He turns 70 in July and is waiting until then to claim in order to maximize his benefit amount. I am 67 and 3 months. I just filed my application for benefits, retroactive to 6 months ago (9/2021). I had 6 years of public employment in the 1980's and received a lump sum payout of my public employee pension in 2001, so I answered "no" to the questions about whether or not I am receiving a pension or expect to receive a pension for non-covered work, but "yes" to the question about receiving a lump sum payment for non-covered work. I understand that my benefit will be reduced due to this payment received 20+ years ago by some yet-to-be determined amount. I have a statement from the public employee retirement fund indicating the amount of the lump sum payment as well as what my monthly amount would have been at the earliest date I could have begun receiving benefits (2015) had I chosen to leave my money in the fund; I am assuming Social Security will contact me shortly requesting this information. My question is, although my monthly benefit will be reduced, will this affect my spousal benefit when I apply in July for spousal benefits on my husband's account? With or without the reduction in benefits from my lump sum payment, my FRA benefit is less than half of my husband's. My assumption has been that although I will have a reduction in my own benefit amount, it will only "matter" for the months that I am only claiming on my own and that once I claim spousal benefits on his account, my total benefit will equal 50% of his FRA benefit. Can you confirm?

Hi. No, I can't. Pensions or lump sum payments in lieu of pensions that are based on non-Social Security covered earnings from a governmental agency in the U.S. (e.g. federal, state, city, county) can cause a person's Social Security spousal or survivor benefits to be offset. That's due to the Government Pension Offset (GPO) provision (https://www.ssa.gov/pubs/EN-05-10007.pdf).

GPO can cause a person's spousal or survivor benefit rate to be offset by 2/3rds of the amount of their government pension. In the case of lump sum payments, Social Security prorates the lump sum amount into a monthly rate based on a statutory formula (https://secure.ssa.gov/apps10/poms.nsf/lnx/0202608400#d4c). Our software (https://maximizemysocialsecurity.com/purchase) is programmed to handle lump sum prorations, so you may want to consider using the software to determine how much, if any, your spousal rate will be affected by your lump sum payment.

Best, Jerry