Hi Larry,
I will be eligible for Social Security Benefit and my wife works for community college and retirement benefits will be through CALSTRS which is not administered by SSA. We need to make a survivor benefit option on CALSTRS with a choice of 0, 50, 75, 100 percent survivor benefit. Member benefit reduces to 95, 90, 85 percent of member only benefit. I am thinking of electing 100% survivor benefit at the cost of member benefit at 85% to keep the income stream same when the member passes away, as the expenses might reduce a bit but other expenses may come into play with only one person. Appreciate your guidance.
Second question I have is, would me receiving a survivor benefit from CALSTRS effect my SS benefit with windfall elimination. Also when I pass away, would my wife's CALSTRS benefit impact she receiving SS survivor benefit similarly due to windfall elimination?

Appreciate your response.
Regards
-Raj

Hi Raj,

My expertise is limited to Social Security benefits, so I can't give you any advice with regard to handling your wife's CALSTRS options.

What I can tell you is that if you receive a survivor pension from your wife's CALSTRS pension plan, that won't in any way affect your Social Security benefits. But, if you die before your wife and if she is receiving a CALSTRS pension that's based on her earnings that weren't subject to Social Security taxes, her Social Security survivor benefits will almost certainly be subject to at least a partial offset due to the Government Pension Offset (GPO) provision. By the way, GPO applies to both survivor and spousal benefits, so if your wife files for Social Security spousal benefits while you're living then those benefits would also almost certainly be subject to GPO offset.

The GPO provision states that if a person receives a government pension based on their work for a U.S. governmental agency (e.g. federal, state, local) where their earnings were exempt from Social Security taxes, then any Social Security spousal or survivor benefits for which they qualify must be offset by 2/3rds of the amount of their government pension (https://www.ssa.gov/pubs/EN-05-10007.pdf). Therefore, if 2/3rds of the amount of your wife's CALSTRS pension exceeds her potential spousal/widow's rate, then her spousal/widow's payment would be reduced to zero. But, if 2/3rds of your wife's CALSTRS pension is less than her spousal/widow's rate, then she would be able to collect a partial spousal/widow's benefit.

Our software (https://maximizemysocialsecurity.com/purchase) is programmed to handle computations involving GPO, so you and your wife may want to strongly consider using our software to fully analyze your options so that you can determine the best strategy for maximizing your benefits.

Best, Jerry