Will taking teacher pension as lump sum eliminate WEP/GPO Social Security benefit reduction?

Unfortunately, this isn't a viable workaround. The SSA is well aware of this potential loophole and has specific rules to address it. When your wife takes a lump sum from her non-covered pension system instead of monthly payments, the SSA will calculate what's called a "Lump Sum Equivalent Benefit" (LSEB). Essentially, they'll convert that lump sum into a theoretical monthly amount and still apply the GPO reduction to her spousal benefits based on that calculated amount. The formula they use takes into account her age, life expectancy, and other factors to determine what the monthly pension would have been. This calculated monthly amount is then used to apply the standard GPO reduction (2/3 of the pension amount gets deducted from Social Security benefits). This applies even if she rolls the lump sum into an IRA - the SSA looks at the origin of the funds, not what you do with them afterward.

my freind did this last year and it DIDNT WORK!!! social security figured it out and they still reduced her check. she thought she was being smart too lol

The whole WEP/GPO system is INFURIATING!!!! I worked 20 years in private sector paying into SS and then 15 as a teacher in Illinois, and now my SS benefit is slashed to almost NOTHING because of these unfair penalties!!! I tried EVERYTHING to get around it - lump sum, delayed filing, you name it. SSA has ALL the loopholes covered. It's like they're PUNISHING us for choosing to be teachers. They call it "double dipping" but it's OUR MONEY that WE EARNED!!! The system is BROKEN!!!

Have you considered if your wife might be eligible for her own Social Security benefit based on any work she did where she paid into Social Security? Sometimes if you have enough quarters of coverage from other jobs, you might qualify for a benefit on your own record. The WEP would still apply, but it might be better than the GPO reduction on spousal benefits in some cases.

I worked with this exact situation for many clients as a financial advisor specializing in educator retirement. There's no way around the GPO through lump sum distributions - SSA will calculate an equivalent monthly amount regardless. However, your decision about lump sum vs. monthly pension should be based on other factors: 1) Income security - monthly pension provides guaranteed lifetime income 2) Investment control - lump sum gives you control but also all the risk 3) Survivor benefits - does the pension offer good survivor options for you? 4) Health/longevity - family history of longevity might favor the pension 5) Other income sources - how much of your retirement income needs to be guaranteed? The GPO will apply either way, so make the pension decision based on your broader financial situation, not as a Social Security strategy.

Has anyone here actually used Claimyr to get through to SS about WEP/GPO questions? I spent THREE DAYS trying to get a human at SSA to explain my specific GPO situation. Finally found this service at claimyr.com and they got me through to a live person at SSA in under 10 minutes! They have a video showing how it works: https://youtu.be/Z-BRbJw3puU Totally worth it to get actual answers from SSA about my situation - the rep I spoke with was knowledgeable about the lump sum pension conversion rules and explained everything clearly. Way better than trying to figure this out online.

My sister works for SSA and says ppl try this lump sum thing ALL THE TIME and it never works lol. They're trained to look for it specifically.

Thanks everyone for the responses. Sounds like there's no magical solution here - we'll just have to accept the GPO reduction and make the best decision on lump sum vs. monthly payments based on our overall retirement plan. I appreciate all the insights and will probably try that Claimyr service mentioned to speak directly with SSA about our specific situation before my wife makes her final decision next year.

One thing nobody mentioned - if your wife goes back to work in a job covered by Social Security after retiring from teaching, those additional earnings won't eliminate the GPO but could help her qualify for her own benefit eventually. Just something to consider if she's planning any post-retirement work.

wait i just rememebred my cousin's husband did something with his pension and military time??? i think he got some kind of exception because he was in the military before being a firefighter? maybe theres exceptions for some people??