Ask The Experts: Retirement

By Reg Jones

Post-1956 deposit

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Q. The following statement was made in an answer to a question ask about post-1956 deposit: “You can’t get a refund of the deposit you made for your active-duty service. What’s done is done. If you retire at age 62 and aren’t eligible for a Social Security benefit at that time, you’ll never have to worry about losing those years and having your annuity recomputed.”

I will retire at age 60 and have paid in a post-1956 deposit. I am in CSRS and will have 41 years and eight months with the post-56 deposit (eight years, six months of military service). I have worked for 40 quarters and am eligible for Social Security (military service and work prior to the military). However, due to the windfall elimination provision, I do not plan to ask for Social Security benefits until I am 65 or older. Will my annuity be recomputed after I reach 62 even though I have no intention of requesting my Social Security benefit until 65 or 70? Can I expect some kind of reduction in my annuity? I understand my Social Security benefit will be reduced by two-thirds once I apply for it.

A. Because you made a deposit for your active-duty service, you’ll not only get credit for that time in your annuity computation but your CSRS annuity won’t be affected no matter when you apply for a Social Security benefit. However, as you noted, your Social Security benefit will be reduced because of the windfall elimination provision. That’s because you will be receiving an annuity from a retirement system where you didn’t pay Social Security taxes and have fewer than 30 years of substantial earnings under Social Security.

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