By Reg Jones
Q. If I meet my MRA+10, which will be age 56 and 24 years at the Postal Service, and defer my annuity until age 60, would I be able to keep my health benefits at age 56? If not, could I start receiving them when I hit 60? Also, can I receive Supplemental Security Income at age 60? If yes, how long until regular SSI kicked in?
Q. I am a CSRS annuitant over 65 with Blue Cross/Blue Shield Service Benefit Plan as my Federal Employees Health Benefits insurer. My wife, who is turning 65 next month, and is covered under my FEHB has been served a notice that she will have $104.90 per month deducted from her Social Security benefit to pay for Part B. Is there something in the laws governing the FEHB program that requires covered spouses of retired federal employees to pay for Part B or forfeit benefits under the FEHB program?
Q. I am looking at retiring in about a year. At that time, I will be 53 with 26 years of 6(c) coverage under FERS. I know I can retire right now, but will I be penalized for not waiting until I am 57 (mandatory retirement age)? Also, I understand I can earn as much as I can after retirement, but until what age? I had an officer tell me it was 57 and another said it was 62, the age when regular Social Security benefits are paid. I also believe that the Social Security benefits at 62 would be reduced but by how much?
Q. I am a retired federal employee on CSRS Offset. Law enforcement with mandatory retirement at age 57. My wife is older than I am and is drawing on her own Social Security. Until I am 62, all of the money is CSRS. When I turn 62, I will start to draw Social Security and my CSRS annuity will be reduced. Would my wife then be able to draw the spouse one-half amount of my Social Security (or whichever is the larger amount between us), or is there any language in which she would be restricted from my Social Security due to the fact that it is tied to my CSRS amount? She is having to sign up for Medicare because she is 65. We pay a lot of money for our federal health insurance. They will take $104. This would protect us with the Blue Cross secondary. Do you recommend signing up for Medicare even though it will decrease her benefits with Blue Cross health insurance?
Q. I am a CSRS employee, age 57, and don’t have enough credits to qualify for Social Security and never will. I have 4½ years in Air Force and 34 years of federal service. I have not bought my military time back. If I retire this year, how many years would my annuity be based on, 34 or 38½ years?
October 30th, 2013 | Benefits COLA Creditable service: CSRS Creditable service: FERS CSRS annuity computation Disability retirement FERS annuity computation PAY RETIREMENT SOCIAL SECURITY spouse benefits SURVIVOR BENEFITS
Every fall, readers ask me what the cost-of-living adjustment will be for CSRS and FERS retirees and Social Security beneficiaries. And they want to know where the numbers come from, who is eligible for a COLA, when are they effective, if they are prorated, and why they are sometimes different for CSRS and FERS retirees.
Because of the government shutdown, it took a little longer than usual to find out that the what the 2014 COLA will be. It’s 1.5 percent. Not great, but better than a poke in the eye with a sharp stick.
Where do the numbers come from? COLAs are a byproduct of data collected by the Bureau of Labor Statistics, which it uses to produce the Consumer Price Index for Urban Consumers. The CPI-U covers about 87 percent of the population. However, to more closely match the spending patterns of federal beneficiaries, BLS uses a subset made up of Urban Wage Earners and Clerical Workers — the CPI-W.
The CPI-W is based on the spending patterns of households where more than half of the income comes from clerical or wage occupations and where at least one of the household’s earners has been employed for at least 37 weeks during the previous 12 months. The COLA amount is determined by the difference in the CPI-W from one year to the next. The arithmetical mean of the CPI-W for the third quarter of the current year — July, August and September — is compared with the arithmetical mean from the base quarter in the previous year.
Who is eligible for a COLA? If you are a CSRS retiree, when you’ve been on the annuity roll long enough, you’ll receive a COLA regardless of your age. With certain exceptions, if you are a FERS retiree, you won’t receive your first COLA until you reach age 62. If you are a FERS employee who retired under the special provisions for law enforcement officers, firefighters or air traffic controllers, you’ll begin receiving your COLA regardless of your age. The same is true for military reserve technicians whose separation from technician service resulted from a loss of military membership or rank because they became disabled after reaching age 50 and completing 25 years of service. Also entitled to non-age-restricted COLAs are survivor spouses, former spouses and insurable interest survivor annuitants.
COLAs are effective Dec. 1 of the year in which a retiree, survivor or Social Security beneficiary becomes eligible. The increases are reflected in the January payments.
When and how are COLAs prorated? For those of you who are eligible and have been retired for an entire year, you’ll receive the full amount of the COLA. If you’ve been retired for less than a year, it will be prorated. The proration will be based on the number of months that have elapsed between the date your annuity began and the effective date of the first COLA after that date. For example, if you retired after Nov. 30, 2012, (FERS) or Dec. 3, 2012, (CSRS), your 2014 COLA would be reduced by 1/12th for each month that you were still employed.
Why are COLAs different for CSRS and FERS retirees? While the 2014 COLA will be the same for CSRS and FERS retirees, it isn’t always that way. That’s because the FERS law states that if the CPI/W increases by 3 percent or more in any year, FERS-covered retirees and survivors will receive 1 percent less than that number. That happened in 2012, when CSRS retirees received 3.6 percent and FERS retirees 2.6 percent. If the CPI/W increases by 2 percent to 3 percent, the adjustment will be 2 percent. If the CPI/W increases by less than 2 percent, the adjustment will equal the CPI/W. That is happening this year.
Q. My husband is 63 and wants to retire Jan. 3, 2014. He has only 29 credits for Social Security, so he is not eligible for benefits. He started his CSRS career before October 1982. He stated paying into CSRS in February 1977. He was in Air Force for four years from 1972 to 1976. Does he have to pay back his military deposit? From what I have been reading, he doesn’t need to pay his military deposit since he is 63 and not eligible for Social Security benefits.
Q. I retired from the Department of Transportation (Federal Aviation Administration) about seven years ago. I retired under CSRS Offset with about 35 years of service. I will be turning 62 in a few months and have applied for my Social Security benefits. I selected some Federal Employees Group Life Insurance coverage, so I am still enrolled. Since my CSRS benefits will be reduced at age 62, can I make changes to my FEGLI coverage to increase my survivor benefits?
Q. My wife and I will not be eligible for Social Security, so when we reach 65 and apply for Medicare, can I have our premiums deducted from my federal retirement payment in addition to my health insurance premium?
Q. I have 34 years of service in CSRS and still work. I have 17 years of substantial payments in Social Security and starting collecting at age 66. Is there a maximum amount that my Social Security can be reduced by the windfall elimination provision, or is it possible to lose my entire Social Security payment upon retirement from government?
Q. I will be retiring Feb. 28, 2014. When can I sign up for my Social Security offset. I am a federal employee under FERS. I started work in August 1984.
Q. 1. If I delay drawing my Social Security until age 65, can I still receive the special retirement supplement past age 62?
2. When my spouse becomes eligible for Medicare (six years before me), how does my federal health insurance work in regard to his medical bills? Will Social Security be primary and my insurance pick up the difference in full?
Q. I am a CSRS federal law enforcement retiree (age 50 with 20 years of service). Other than having paid into FICA taxes, I never paid into Social Security like present FERS employees. When I turn 65, am I eligible for both Medicare parts A and B? If not, how do you suggest I proceed to supplement my coverage?
Q. I will be 65 on Dec. 2 and will then be eligible for Medicare. I have Blue Cross/Blue Shield now, and premiums are taken out of my FERS annuity check. I would like to continue to carry BC/BS via Part B when I am eligible for Medicare. Do I need to contact BC/BS to let them know this? Can you help me with a contact phone number? Also, I understand my insurance premiums will come out of my Social Security payment rather than my FERS annuity payment. This should cause my FERS annuity to go up (since insurance premiums are no longer taken out) and my Social Security payment to go down (because insurance premiums will now be taken out). Am I understanding this correctly?
Q. My husband will be retiring for the Postal Service in November. Should he get a spousal annuity for me, a CSRS employee who will be retiring in 2016? Will I be eligible to draw Social Security benefit from his retirement and my CSRS retirement upon his death?
Q. I have been on Social Security disability for the past 10 years. I have Medicare Part A now. Part B was dropped because I needed the money. If I add back Part B, how much will it cost me each month? It was about $100 a month back then.
Q. My husband passed away two years ago and, because I retired with a California Public Employees’ Retirement System pension, I am not eligible to receive his Social Security benefit because of the government pension offset. When I reach full retirement age (66), does the GPO still apply?
Q. Husband, age 54, is retiring under Voluntary Early Retirement Authority on Dec. 31. He has 31 years with the Postal Service under CSRS and three years with the military and did not pay back his military time. He has 19 quarters earned for Social Security. He does not intend to earn the full 40 quarters of Social Security prior to age 62. If he earns the full 40 quarters after age 62 — say, at age 64 — what will happen?
Q. I am a government worker under CSRS Offset. I was told that I cannot keep working as a government worker full time and draw Social Security at age 66. Is this correct?
Q. I retired from the Postal Service on Jan. 31. I will reach my minimum retirement age next year. I am also a widow. Will my special retirement supplement be based on my deceased husband’s Social Security? I will not be drawing off of mine.