By Reg Jones
Q. I am 47 years old with 25 years and one month of service under FERS. If I accept Voluntary Early Retirement Authority, my understanding is that my monthly annuity will not be eligible for cost-of-living adjustments. Is that correct?
Also, once I reach 56 years and four months of age, the special retirement supplement would then be added until I’m age 62. Is that correct?
After age 56 years and four months, would COLAs then be applied to the annuity?
Finally, if I’m working in the private sector earning a salary above the current $14,000 Social Security limit for earnings, would the supplement be reduced $1 for every $2 I earn over the limit?
A. Unless you are a special category employee, such as a law enforcement officer, you won’t receive any cost-of-living adjustments until you reach age 62, regardless of whether you retire early or at the usual time. You’d begin receiving the special retirement supplement when you reach your MRA. Since you mention 56 years and four months, I assume that you were born in 1966. If you have earnings from wages or self-employment that exceed the annual Social Security limit, your SRS will be reduced or suspended. The limit in 2013 is $15,120. You are correct that if you exceeded the earnings limit your SRS would be reduced by $1 for every $2 you earned about that year’s limit.
Note: Special category employees who retire before their MRA can earn as much as they want without affecting their SRS. However, when they reach their MRA, they are treated the same as every other FERS retiree.