Q. How much will I be penalized at age 62 if I am collecting a retirement from a state program. I will collect $2,000 per month from PERS in the state of Nevada. I will be entitled to $300 from Social Security at age 62. What is the penalty?
A. The Social Security Act’s Windfall Elimination Provision reduces a Social Security benefit by half of the first calculation bracket (a maximum reduction of 55 ½ percent of the regular amount calculated from the first bracket). If your regular benefit at age 62 was estimated at $300, your reduced benefit would be approximately $133. The maximum Windfall reduction for a wage earner reaching age 62 in 2011 would be $375 per month if benefits began at full retirement age (i.e. half of the $749 first calculation bracket for 2011).