By Reg Jones
Social Security offset
February 27th, 2012 | SOCIAL SECURITY
Q: I know if a FERS employee retires before age 62, he would receive a Social Security offset payment under the same rules as if receiving Social Security. Under this rule, the maximum that could be earned without a payment reduction is a little more than $14,000. If I get a job that is not in the Social Security system, such as many teachers do, will the over-14K income rule still apply?
A: Yes, the limit will apply regardless of the source of the earnings from wages or self employment.
Tags: FERS, SOCIAL SECURITY
Windfall elimination
February 21st, 2012 | Windfall elimination provision
Q: I have been unable to identify if there is an exception to the windfall elimination provisions that will allow me simultaneous entitlement to a CSRS annuity and to full or non-reduced Social Security benefits. I assume
that Social Security benefits are not subject to reduction under the windfall elimination provisions if the credits earned were earned as a
federal employee and during the time period (15 years) in which the credits were earned, I made no payments into any other retirement system. I think that benefits earned under the CSRS system were earned during a time period (20 years) when I made no contributions to the Social Security trust fund. The facts are that I am a CSRS annuitant, I also earned 60 Social Security credit hours employed by the federal government in which both the federal government and I paid into the Social Security
trust fund for the hours earned and during which I was paying into no other retirement system other than Social Security. There were two separate periods of time associated with his situation: 20 years payment into the CSRS system and approximately 15 years paying into Social Security as a federal employee. Can Social Security payments be reduced where the Social Security credits earned were earned as a federal employee and no payments were made into the CSRS system, or any other retirement system, during the time the payments made?
A. No. To see how and why the windfall elimination provision is applied and what the exceptions are to it, go to www.socialsecurity.gov/pubs/10045.html.
Tags: CSRS, SOCIAL SECURITY
GPO and WEP
February 20th, 2012 | SOCIAL SECURITY
Q: I retired under CSRS in 2005 after 23 years with the Secret Service as an 1811 LEO. Private employment has permitted me to acquire enough earned SS credits to qualify for $1,028 per month at 62 years of age. My wife has also been privately employed for 35 years and has earned Social Security credits to qualify for $923 per month at 62. What impact will GPO and WEP have on my Social Security benefits? Does it make a difference if I apply for Social Security benefits before my wife (I’m six months older) with respect to survivor benefits?
A: The government pension offset will likely eliminate any Social Security spousal benefit to which you would otherwise be entitled. That’s because it will reduce that benefit by $2 for every $3 you receive in your CSRS annuity. On the other hand, the windfall elimination provision will reduce but not eliminate your earned Social Security benefit. As for who applies first for a Social Security benefit, I’m not aware that it would make any difference. Neither the GPO or the WEP will apply to your wife. And while your earned Social Security will be reduced, any Social Security spousal benefit to which she would be entitled would not. However, she would only get the larger of the two benefits.
Subject to WEP
February 17th, 2012 | Windfall elimination provision
Q: I am a 55-year-old recently retired postal employee and I receive a CSRS annuity every month. I plan to collect Social Security benefits when I reach age 62. I have been working part time and paying into Social Security as well as working my full-time position for approximately 30 years. What will the reduction to my Social Security be because I am a CSRS retiree?
A: Because you are receiving an annuity from a retirement system where you didn’t pay Social Security taxes, you’ll be subject to the windfall elimination provision. The WEP will reduce your Social Security benefit if you have fewer than 30 years of “substantial earnings” under Social Security. Substantial earnings are greater than those required to earn Social Security credits. To see what substantial earnings are by year and to estimate the reduction in a Social Security benefit, go to www.socialsecurity/pubs/10045.html.
Tags: CSRS
CSRS return to work
February 17th, 2012 | SOCIAL SECURITY
Q: I worked under CSRS for 18 1/2 years, ending in 1987, and withdrew my contributions at the time.I have worked in private industry paying full Social Security for 29-30 years (work totally separate than my CSRS work.)
I have recently rejoined the government and was placed in CSRS-Offset retirement.I am 62 and plan to work another three to five years under the CSRS-Offset system (time frame somewhat relative on whether I buy back my previous retirement credit.) I am deciding on redeposit (with interest, of course) to obtain the 18 1/2 years of CSRS retirement credit I formerly had. If I redeposit, will my ultimate CSRS retirement related to those years be reduced by Social Security even though my Social Security income is from separate private employment combined with a relatively short time under the CSRS-Offset system and those 18 1/2 years of income are not counted in determining OASDI benefit? (Or will that time be included as a result of my redeposit? I don’t believe that the redeposit amount includes anything contributed to OSADI, correct?)
A: Because you took a refund of your retirement contributions before March 1, 1991, you can either repay the refund, plus interest, or not do so. If you don’t, you’ll still get credit for that time in determining your years of service but your annuity will be actuarially reduced based on the amount you owe and your age when you retire. If you retire before age 62, at age 62, your CSRS annuity will be offset only by the amount of Social Security benefit you earned while covered by CSRS Offset. If you retire on or after reaching age 62, the offset will occur on the day you retire. The amount of Social Security benefit you are entitled to based on your entire employment record won’t change.
Tags: CSRS, CSRS offset, re-employment
WEP and taxes
February 16th, 2012 | Windfall elimination provision
Q: I worked four years in a supermarket and another 20 years in the U.S. Air Force, bringing my U.S. Social Security years worked up to 24.I returned to Spain and began working and now have 20 years in the Spanish Social Security system which gives me another retirement. I paid taxes on my U.S. earnings at the time and now pay taxes on my Spanish earnings. If you are paying taxes does the WEP come into play?
A: Yes, you will be subject to the windfall elimination provision if you have fewer than 30 years of substantial earnings under Social Security.
Tags: SOCIAL SECURITY
Social Security calculation
February 15th, 2012 | SOCIAL SECURITY
Q: I will have to retire (age 57) in January 2014 as a federal
law enforcement officer with 29 1/2 years of service under FERS. If I am
correct, the Social Security Supplement will be calculated by multiplying my Social Security estimate of $1,792 per month (obtained from their website) times 29.5 divided by 40 (40 quarters). This will equate to $1,321 per month at retirement or $15,859 per annum. Did I calculate this correctly?
A: Close. However, the formula you used needs one minor adjustment. Your FERS-covered years should be rounded up to the next higher whole number, which would be 30. The answer then would be $1,344. Just remember that the Social Security estimate you received will have changed by the time you retire. Also that the amount you receive will vary according to your Average Indexed Monthly Earnings, just as it is true with any Social Security benefit.
Tags: FERS, RETIREMENT
Pension offset
February 15th, 2012 | Government pension offset
Q: My wife began working for the post office in 1977 and retired in 2010 with 33 years of service under the CSRS Offset retirement system. During all these years Social Security was deducted from her check. She will turn 62 in October 2014, and as I understand the rules, her civil service pension will be offset a calculated amount based on the Social Security that she will be eligible to draw when she turns 62. I can understand this being the case had she not paid into Social Security. Since she paid into Social Security all those years, it doesn’t seem right that her civil service pension should be offset. If an individual worked for a non civil service company and retired, their pension is not offset by the amount of Social Security they would draw. The Social Security would be in addition to their regular pension check.
A: Your analogy doesn’t hold water. Regular CSRS employees contribute 7 percent of their salaries to the civilian retirement fund, in return for which they receive a full CSRS annuity. CSRS Offset employees contribute 0.08 percent of salary to the civilian retirement fund and 6.2 percent to Social Security, in return for which they receive the same amount of annuity benefit as their full CSRS colleagues. It just comes from two different places, the Civil Service Retirement and Disability Fund and the Social Security Administration.
Tags: annuity, CSRS offset, SOCIAL SECURITY
Borrowing quarters
February 14th, 2012 | SOCIAL SECURITY
Q: I retired in 2010 from the Defense Department with 40 years, four months and 13 days of service under CSRS. I”am 62 and have 23 Social Security quarters, so I need 17. My wife of 23 years is 59 and getting Social Security Disability. Could I borrow the remaining quarters from her?
A: No, you cannot. You’ll have to earn them yourself.
Tags: CSRS, retired, SOCIAL SECURITY
Retirement and spouse Social Security
February 14th, 2012 | Coverage
Q: I plan to retire this year. I am under CSRS. I understand the WEP for me but have some doubts about the Social Security benefits of my wife. She has been paying Social Security all her life and never worked for a government with another type of pension. Is her Social Security retirement affected because of me? If I choose a survivor benefit, how is that going to affect her Social Security?
A: The fact that you will receive a benefit from a retirement system where you didn’t pay Social Security taxes will have no affect on her own earned Social Security benefit or on the survivor benefit you elect for her.
Tags: retire, SOCIAL SECURITY, taxes