Ask The Experts: Retirement

By Reg Jones

Former CSRS employee’s retirement options

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Q. I am a former federal CSRS employee who lost employment when the Philadelphia Naval Shipyard was closed in 1995. I had about 15 years of service and left my contributions in the system. I was born in July 1956 and am 56. When can I apply for a pension, and what can I expect? Would I take a deferred pension? Also, I have met my 40 quarters for Social Security and have been employed for about 17 years with the School District of Philadelphia. I am thinking about retiring when I am 62 but would like to know my options as far as the WEP and such. Can you help?

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Re-employment and WEP

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Q. I started receiving Social Security benefits when I was 65 (my eligibility age would have been 66). I am now 68 and contemplating going back to work at a job that pays into Social Security. Will that have any effect on the windfall elimination provision that is not deducted from my benefits? I had 38 credits in Social Security when I retired.

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Windfall elimination provision

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Q. Last week in your column, someone wrote that the windfall elimination provision was going to reduce their Social Security by over $1,000 per month. From my understanding, I thought that the maximum Social Security reduction for this year is around $390 per month related to the WEP. As this is going to affect my Social Security when I apply in a couple of years, am I missing something here, or can the WEP reduce someone’s benefit at a higher amount such as $1,000 per month?

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CSRS, Social Security and the windfall elimination provision

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Q. I started work at 16 during the summer to help pay for college.

From 1966 to 1974, I made very low incomes but contributed to Social Security. Then I worked for the Forest Service and became a CSRS employee for five years. I resigned and got a refund on my retirement because I did not think I would work there again. But because I had five years in, the Forest Service says I still have a vested interest in CSRS and will pay me $202/month for that vested service when I retire.

Between 1990 and 1999, I stayed home with my children and occasionally worked as a substitute teacher — once again, low wages that contributed to Social Security. That means I have only about 11 years of substantial earnings toward Social Security. The windfall elimination provision states that my Social Security benefits cannot be reduced more than half of my pension. What pension? The $202 I get from CSRS, the $901 combined pension from the government or the $647 from Social Security? Can’t government brochures be more specific?

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Government pension offset and windfall elimination provision

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Q. I’m trying to understand how my retirement income will be affected by the government pension offset and windfall elimination provision.

I’m a CSRS Offset employee (55 years old) contemplating retirement in the next year with more than 32 years’ service. I also receive a monthly spousal annuity from my deceased wife’s CSRS service. I understand that when I turn 62, my own CSRS pension will be reduced by whatever Social Security amount I’m eligible for (should be more than 30 years of Social Security earnings), but I just read something indicating that my spousal annuity also might be reduced at age 62 due to the windfall elimination provision. Can you shed light on how this will unfold?

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Windfall elimination

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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.

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Subject to WEP

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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.

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WEP and taxes

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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.

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Benefits, CSRS Offset and WEP

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Q. I’m a Civil Service Retirement System Offset employee with 18 years, 6½ months, under straight CSRS; 12 years, 7 months, at retirement (April 30, 2012); and with at least 40 quarters earned under Social Security before federal service. I had an appointment the other day at the Social Security Administration to see what my benefits, offset amount and windfall amounts would be. The person who I talked to had no idea about the CSRS Offset and kept calling the windfall elimination provision (WEP) an offset. She insisted she never had to consider/calculate the offset amount for the Office of Personnel Management, and that OPM would do the calculations and she just had to do the WEP calculations.

My first question: At the time of retirement, does OPM notify a Social Security office where there are people who have dealt with CSRS Offset and WEP and will calculate my benefits properly and correctly?

My second question: What figures and formula do I use to figure out my benefit amount at 64, my offset amount and the WEP amount?

My third question: My full retirement age is 66; retiring at 64 will reduce my full retirement benefit. The offset amount is calculated against the total amount I’m due at 64; that amount reduces the CSRS annuity, not the Social Security amount, and the combination of the two amounts will total the same as the original CSRS benefit. Is the WEP also calculated against the amount I’m due at 64?

A. For a primer on CSRS Offset and how and why your annuity would be offset, read OPM’s Retirement Fact 13 at http://www.opm/forms/pdfimage/RI83-19.pdf. For the full story on how the offset will be calculated, go to http://www.opm.gov/retire/pubs/handbook/C050.pdf and scroll down to Section 50A3.1.1-4.

For a primer on the WEP and how and why your annuity might be affected, read the Social Security Administration’s WEP Fact Sheet at http://www.socialsecurity.gov/pubs/10045.html. Then use the calculator at http://www.socialsecurity.gov/retire2/andPiaWepjs04.htm to determine what effect the WEP would have on your Social Security benefit.

Retirement benefits depend on retirement system

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Q. My wife started working under the Civil Service Retirement System in July 1982 and continued to work under CSRS until August 1989. She is re-entering the government workforce. She plans to stop working in eight years when she will be 57, and will have 15 years of government service. It appears she would be  eligible for deferred retirement benefits at age 62. How will her benefits be calculated?

A: It all depends. When she returns to work for the federal government, she’ll be covered by CSRS Offset (CSRS and Social Security), with the option of transferring to the Federal Employees Retirement System (FERS and Social Security). If she stays in CSRS Offset, her entire annuity will be calculated under the CSRS formula. When she applies for deferred annuity at age 62, her CSRS annuity would be offset by the amount of Social Security benefit she earned while covered by CSRS Offset. The dollar value would be the same but the money would come from two different sources. If she transferred to FERS when she applied for a deferred annuity at age 62, her CSRS time would be calculated under the CSRS formula and her FERS time under the FERS formula. Note: Because in both cases, she would be receiving part of her annuity from CSRS, a retirement system where she didn’t pay Social Security taxes, her Social Security benefit would be subject to the windfall elimination provision. The WEP reduces the Social Security benefit of anyone who doesn’t have at least 30 years of coverage under Social Security.

Double negative?

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Q: I am a GS-13 planning to retire at 70 with 19 years in CSRS, 11 years in CSRS Offset, and 19+ other substantial years under Social Security. No matter how many times I read the other questions and answers, I keep thinking they say my total retirement will be the sum of my CSRS retirement reduced by the net Social Security benefit after WEP reduction, PLUS the net Social Security benefit after WEP reduction. In other words, Total = (CSRS – (SS-WEP)) + (SS-WEP) = CSRS as if Social Security doesn’t exist. Am I confused? Can you straighten me out?

A: When you retire, the CSRS Offset portion of your total annuity will be offset by the amount of Social Security benefit you earned while a CSRS Offset employee. The net result will be the same. The payments will just come from two places, OPM and the Social Security Administration. Because you will have 30 years of substantial earnings under Social Security, the windfall elimination provision won’t apply. As  a result, neither the portion of your Social Security benefit earned under CSRS Offset nor the additional benefit earned elsewhere will be affected.

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CSRS offset

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Q. Does the windfall elimination provision apply to anyone in CSRS Offset who is 55 or older and has 30-plus  years of service upon retirement?
 
A. The windfall elimination provision applies to anyone who is receiving an annuity — in whole or part — from a retirement system where he didn’t pay Social Security taxes and has fewer tha 30 years of substantial earnings under Social Security.

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Offset years

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Q: I had 13 years of Social Security employment (max contribution) before entering CSRS Offset in 1991. My salary was always maximum Social Security contribution. I am 64 and considering retirement at age 66. Do CSRS Offset years count in meeting the 30 year requirement to avoid WEP?

A: All years of Social Security-covered employment in which you had substantial earnings count toward the 30 years needed to avoid the windfall elimination provision.

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CSRS Offset and Social Security

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Q: I am getting ready to retire. I worked for the government from 1968 to 1972, then worked in the private sector and earned my 40 quarters in Social Security. I returned to work for the federal government in 1984 as a Civil Service Retirement System Offset employee. I was told that because I earned my 40 quarters from the private sector that my government annuity would not be reduced: I will get a full government annuity and a full Social Security check. Is that right?

A: By law, your CSRS annuity will be reduced at age 62 by the amount of Social Security benefit you earned while covered by CSRS Offset. Whether you will be affected by the windfall elimination provision depends on how many years of substantial earnings you have under Social Security. If you have 30 or more years, there won’t be any reduction in your Social Security benefit. If not, your Social Security benefit will be reduced. You won’t be subject to the government pension offset.

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CSRS Offset and the WEP

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Q: I had 13 years of Social Security employment (max contribution) before entering the Civil Service Retirement System Offset in 1991. I am 64 years old and considering retirement at age 66. Do CSRS Offset years count in meeting the 30-year requirement to avoid the windfall elimination provision?

A: All years of Social Security-covered employment in which you had substantial earnings count toward the 30 years needed to avoid the windfall elimination provision.

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WEP question

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Q: I am a 63 and ready to retire. I am from Romania where I worked for 15 years and paid for the corresponding Romanian Social Security, so I got a small pension (about $250) from there. I moved to the U.S. in 1985 and became a U.S. citizen. I’ve worked here for 25 years and pay for U.S. Social Security. I never worked again in Romania after I came to the U.S. I applied for Social Security in the U.S. and it seems that my U.S. Social Security benefits will be reduced because I get a pension from Romania. Some of the Social Security employees are saying that the Windfall Elimination Provision applies to me, some are saying that it does not. My question is: Does the Windfall Elimination Provision apply to me?

A: Yes, it does.

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CSRS Offset, redeposits and the WEP

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Q: I just received notice from Social Security that my benefits check may be reduced because of the windfall elimination provision. I retired under the Civil Service Retirement System Offset program Oct. 31, 2010. My time in service under CSRS was approximately five years, nine months. I withdrew the money that I put in after each job because at the time I did not expect to retire from civil service. My last withdrawal from CSRS was from the period of May 1981 to December 1982. I returned to government work in May 1984 and was placed in the CSRS Offset category. Because I did not pay back the redeposits I withdrew, my government annuity is reduced each month.

Will Social Security reduce my benefits under the WEP even though my government annuity is already reduced because I did not pay back the redeposits?

A: Because you took those refunds before March 1, 1991, your annuity was actuarially reduced based on the amount you owed and your age when you retired. Because a portion of your CSRS Offset annuity is based on pure CSRS service where you weren’t covered by Social Security, you are subject to the windfall elimination provision. If you had fewer than 30 years of substantial earnings under Social Security, your Social Security benefit will be reduced.

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Social Security benefits alongside CSRS

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Q: I requested retirement calculations for mid-2014 and recently learned that after I left the government in September 1984, the retirement money I withdrew would have to be repaid in order to receive the benefits for that money. I withdrew $3,700; repayment with accumulated interest would be more than $22,000. I returned to the government in March 1987 under the Civil Service Retirement System Offset program. I thought I read that if a person who receives money under CSRS can also receive full Social Security benefits (no windfall) if that person has enough credits with Social Security (approximately 30 years). Is this true?

A: Yes, if you have at least 30 years of substantial earnings under Social Security. For more information about the Windfall Elimination Provision and what constitutes “substantial earnings,” visit the Social Security Administration’s WEP page here and click on “How does it work?”

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Social Security and WEP

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Q: My latest Social Security estimate pamphlet says the maximum monthly reduction for WEP in 2010 is $381. Does that mean I would take whatever amount they estimate my monthly amount will be and can count on having no more than $381 deducted from that amount for the WEP penalty?

A: The windfall elimination provision reduces but does not eliminate the Social Security benefit of anyone who receives an annuity from a retirement system where he didn’t pay Social Security taxes, such as CSRS, and has fewer than 30 years of substantial earnings under Social Security. To find out how the WEP might affect you, go to www.socialsecurity.gov/retire2/anyPiaWepjs04.htm.

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Windfall elimination

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Q: In calculating the effect of WEP, how do the years I work between age 66 and 70 count? I plan to keep working and apply for Social Security when I am 70. At age 66, I will only have 18 years of substantial contributions under Social Security. If I continue to work until I am 70, will the additional four years of substantial contributions count in calculating the WEP when I apply for Social Security? Or will the WEP be based only on my years of substantial contributions as of age 66?

A: The windfall elimination provision is applied when you have the age and service needed to receive an annuity, whether or not you continue to work after that point.

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