Impact of PERA on Social Security Benefits

Chloe worked for the state and gets PERA.  Her Social Security report says she would get $746/mo benefit at age 62.   John will get $,2011/mo at age 62.  When we run Social Security Timing, the suggested timing is for John to take his social security at age 70 and Chloe as well. It says she would get $0. Wouldn’t Chloe’s benefit be reduced to a maximum of half her benefit due to PERA? Also, if John predeceases Chloe, does Chloe get John’s social security in addition to her PERA benefit?

If you retire on May 31, 2023, with a total earned income of $150,000 by that date, and elect to begin Social Security benefits on June 1, 2023, your benefits should not be reduced due to your earned income prior to retirement. The Social Security Administration (SSA) allows for the use of a monthly earnings test in the year you retire, rather than the annual earnings test, which is particularly useful when retiring mid-year.

The monthly earnings test for 2023 allows you to earn up to $1,770 per month after you begin receiving Social Security benefits without impacting your benefit amount. Since you will have no earned income after May 31, 2023, you can report this to SSA when you apply for benefits. This ensures that the income earned before June will not affect your Social Security benefits from June onward.

When you apply for Social Security benefits, the application process will prompt you to provide information about your monthly earnings. You will need to indicate that your earnings will be zero from June through December. SSA will use this information to determine that your benefits should not be reduced due to the earnings test.

The content on this blog is for informational purposes only and is not legal, financial, or professional advice. Social Security rules change periodically, so some information may become outdated. For the most accurate advice, consult a certified National Social Security Advisor (NSSA®). Social Security Professionals, LLC, and NSSA® are not responsible for any errors, omissions, or actions taken based on this blog's content. Use of this blog does not create a client relationship, and all information is provided "as is" without guarantees. By using this blog, you agree to hold Social Security Professionals, LLC, and NSSA® harmless from any claims or liabilities arising from its content. For personalized guidance, contact an NSSA® professional.