By Reg Jones
January 11th, 2013 | Uncategorized
Q. I understand that if you exceed the special retirement supplement earnings limit for the year you retire, you will not be eligible for the special retirement supplement for the rest of that year. Is this correct?
I will be eligible to retire Jan. 22, 2015. I would like to carry into the 2015 year 240 hours of annual leave. There are two pay days in 2015 prior to Jan. 22. Most likely, the lump-sum payment for 240 hours of annual leave and January wage earnings will exceed the special retirement supplement earnings limit for 2015. If I put all of my January 2015 earnings into the Thrift Savings Plan and only collect the lump-sum payment, which by itself is less than the earnings limit, would I be eligible to get the special retirement supplement for the rest of 2015?
A. Relax. You’ll be covered by the so-called “first year rule.” That’s a special rule that applies to earnings during the first year of retirement.
This special rule lets the Social Security Administration pay a full Social Security check for any whole month they consider you retired, regardless of your yearly earnings. If you will be under full retirement age for all of that year, you are considered retired in any month that your earnings are $1,220 or less and you didn’t perform substantial services in self-employment. It also applies to those who have reached full retirement age and are considered retired in any month that your earnings are $3,240 or less and you did not perform substantial services in self-employment.
Note: The dollar amounts cited above are for 2012. They will likely be higher when you retire.