Ask The Experts: Retirement

By Reg Jones

Retirement date

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Q. I am 59 and a CSRS Offset employee with 33+ years of CSRS coverage and am at the top of the GS-15 payscale. About 21 of those years were under CSRS Offset, so I know the deduction will be somewhere around 52.5 percent of my Social Security earnings. I am exempt from windfall elimination provision because of more than 30 years of Social Security coverage.

I am concerned that if I retire Jan. 3, 2014, my final paycheck and my lump sum for leave will add another year to my number of years covered by Social Security and raise the deduction amount to 55 percent. That equals about $3,750 per year. Even though I could get this back in Social Security, I don’t plan to claim Social Security until I am at least 66.

Am I correct in my estimation that waiting to retire in January will add another year to my Social Security earnings? If it does, will this mean my federal pension will be reduced by $3,750 per year with no corresponding payment of Social Security? This works out to a reduction in benefits of about $22,500 if I don’t claim Social Security until 68. If I am correct, would Dec. 3 be the best date to retire to ensure that Social Security is not reduced for earnings in 2014, or should it be earlier to ensure the lump-sum payment for leave occurs in 2013?

A. Here are the rules. Take your total years of CSRS Offset service — with partial years rounded up to the next higher year — and divide it by 40.

Take the product and multiply it by your estimated Social Security benefit at age 62. That will be the amount by which your CSRS annuity will be reduced. Doing the arithmetic is up to you. After you’ve done it, you can make a decision about when to retire.

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