Hi, I worked for state government and a non profit in the 1980's and 1990's. When I left state government, I ultimately took a lump sum retirement plan payout that was invested in an IRA that I still own. I'd have to do some digging to come up with exact timing, but I left my state job in 1990, payout was several years after that, probably mid-1990's. Am I subject to a WEP reduction in SS benefits? I'm midway into my benefit application, I've checked the "no" boxes for pension or annuity from non covered employment, and checked the "yes" box for having received a lump sum payment, even though it was 25+ years ago.

Hi. Possibly. If you worked for an employer where your earnings were exempt from Social Security taxes and if you receive either a pension or lump sum payment in lieu of a pension that's based on those earnings, then your Social Security retirement or disability benefits can be subject to a reduction due to the Windfall Elimination Provision (WEP).

So, unless you meet an exception that exempts you from WEP (https://www.ssa.gov/pubs/EN-05-10045.pdf), then it sounds like Social Security would prorate your lump sum amount into a monthly amount for purposes of applying the WEP provision (https://secure.ssa.gov/apps10/poms.nsf/lnx/0300605364#c5). However, many variables go into determining whether or not your benefits will be subject to a WEP reduction, and how much if any reduction may apply. Our software (https://maximizemysocialsecurity.com/purchase) is programmed to handle WEP computations, so you may want to strongly consider using the software to fully analyze all of your options so that you can determine your best strategy for maximizing your benefits.

Best, Jerry