My brother has been in a nursing facility for over 15 years, prior to that he was employed by a state agency. He was recently notified that he was eligible for a retirement benefit from that state agency. If he take the retirement benefit how would this impact his SSI benefit. If he withdraws all of the funds out to pay for funeral/burial planning services how would this impact his SSI benefit.
Supplemental Security Income (SSI) is a needs based program not funded by Social Security taxes (https://www.ssa.gov/ssi/). If your brother is receiving SSI and he begins receiving a state retirement pension, his SSI will be offset essentially dollar for dollar. The first $20 of other income is disregarded, though, so your brother's combined income may be roughly $20 more per month if he gets a state pension in a lesser amount than his SSI.
There is a $2000 asset limit in order to qualify for SSI. Funds set aside for burial expenses can be excluded from counting toward the asset limit, but only up to a maximum of $1500 (https://secure.ssa.gov/apps10/poms.nsf/lnx/0501130410).
I should also mention that as a condition of eligibility for SSI, your brother is required to file for any other benefits for which he qualifies (https://secure.ssa.gov/apps10/poms.nsf/lnx/0500510001) .