Ask The Experts: Retirement

By Reg Jones

Social Security, CSRS and survivor benefits

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Q. I am a retired CSRS postal worker and have opted for a survivor benefit. I do not qualify for Social Security. My spouse has about 24 years of SS payments from her jobs. If I die, are her benefits, either CSRS survivor benefits or Social Security, affected? If she dies, am I entitled to any of her Social Security benefits?

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CSRS, Social Security and WEP/GPO

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Q. My husband worked for the government for 25 years under CSRS and receives a pension. When he retired, we applied for spousal benefits because I had no qualifying employment. He then went to work in the private sector and will complete his 30 years of substantial earnings for Social Security next year. When he retires, he will receive another pension from his private job. As we understand it, we should not be affected by the windfall elimination provision. However, we are confused by the government pension offset. Will he not be entitled to draw his full Social Security at age 66 or later? How will it affect my half of his Social Security payments? How will it affect my spousal benefit of his federal pension should he die before I do? Am I correct in understanding that the pensions are not considered earned income and should not reduce the Social Security amount?

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Catch-62 questions

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Q. I retired in 2010 with 40 years of service, including four years of military service (1972-1976) that I did not pay back. While I am 62 and don’t qualify for Social Security yet, I recently received a notice that I now qualify for survivor benefits. Will this affect my CSRS annuity? Second, is the one-time Catch 62 check at age 62 in law or process? My concern is that if it is process, then it could easily be changed because of the budget situation to check every year after age 62 or when you start to draw Social Security if you qualify after age 62.

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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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Government pension offset

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Q. I am a CSRS retiree. My husband still works and is under Social Security. When he dies, will I receive anything from his Social Security? I am aware there is something called the government pension offset, but I don’t understand it. Can you explain?

A. Your Social Security spousal or survivor benefit will be reduced by $2 for every $3 you receive in your CSRS annuity. To better understand the government pension offset and the reason it is a matter of law, go to http://ssa.gov/pubs/10007.html.

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Government pension offset

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Q. I am under FERS with a CSRS component (10 years CSRS, 15-year break, FERS for the past 20 years). If my spouse receives Social Security benefits based on my work history and I predecease him, and he begins receiving an annuity, will his Social Security payments be reduced or possibly eliminated under the government pension offset? He has enough quarters to qualify on his own record and is receiving payments now. However, under my records, his payments would be higher. I will retire in a year, at age 66, and would like to know before we request that his payments be based on my work history.

A. If he receives an annuity from a retirement system where he didn’t pay Social Security taxes, such as CSRS, any Social Security spousal or survivor benefit would be subject to the government pension offset.

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CSRS and military service and Social Security

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Q. I retired from the Department of Veterans Affairs after 42 years of CSRS service. I also retired from the U.S. Army Reserve with 31 years of service. In the Reserve, I paid into the Social Security system. I always understood that I would not receive Social Security payments due to the windfall elimination provision or government pension offset. However while I was visiting a Social Security office on another matter, a rep told me that because I paid in for more than 20 years, I would receive a percentage of my Social Security entitlement. Is this true, and if it is, where can I find this information? I will be 66 in 18 months.

A. The windfall elimination provision reduces but doesn’t elimination a Social Security benefit. And it only reduces it if you have fewer than 30 years of substantial earnings under Social Security. You can find out more about the WEP and how it might affect you at http://ssa.gov/pubs/10045.html.

The government pension offset only applies to the spousal Social Security benefit of someone receiving an annuity from a retirement system where he didn’t pay Social Security taxes, such as CSRS. In most cases, it will eliminate that benefit. You can find out more about the GPO at http://ssa.gov/pubs/10007.html.

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CSRS survivor benefits and wife, unmarried daughter

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Q. I retired from federal service under CSRS in 2004 with full survivor benefits provided to my spouse following my death. Will my spouse still be able to receive her Social Security benefits at their full value? If my spouse passes on before I do, are there Social Security survivor benefits that pass on to me or our unmarried daughter, who is dependent on us for support?

A. Your spouse would be able to continue receiving her earned Social Security benefit. If she were to die before you, any spousal or survivor Social Security benefit you would otherwise be entitled to would be affected by the government pension offset provision of law. The GPO would reduce any such benefit by $2 for every $3 you receive in your CSRS annuity. Whether your daughter would be entitled to any Social Security children’s benefit would depend on whether she is either unmarried and under 18 (19 if a full-time secondary school student) or was severely disabled before age 22 and remains disabled.

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WEP

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Q. I retired in 2008 from the Department of the Navy as a civilian with 37 years of service. I also had 33 Social Security credits prior to starting my government service. I have worked in the private sector for the past five years and have met and exceeded my mandated 40 Social Security credits. I have been receiving My most current Social Security statement cites that I will receive $632 at age 62, etc.

I’m somewhat confused about the government pension offset process/impact and was hoping you could help define my situation. I plan to retire from my private-sector job in January 2014. I will be 63½ years old. Will I receive any of the Social Security amount cited in my statements, or will the GPO negate most or all of the Social Security amount noted to me?

A. The government pension offset only applies to the spousal Social Security benefit of someone who is receiving an annuity from a retirement system, such as CSRS, where he didn’t pay Social Security taxes. What you are asking about is the windfall elimination provision. The WEP will reduce but not eliminate your Social Security benefit if you have fewer than 30 years of substantial earnings under Social Security.

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Government pension offset and Social Security

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Q. I need to work three more years of about $4,800 each year to qualify for Social Security benefits. Is this something I need to do? Will my annuity reduce if I never apply for Social Security? Is it more, less or closely the same benefit financially to draw Social Security? How can I generally know this mathematically? Also, is there a site and/or calculator that provides additional help with the government pension offset?

A. If you earn 40 credits under Social Security, you’ll be entitled to a Social Security benefit; however, because you are a CSRS employee who will be receiving an annuity from a retirement system where you didn’t pay Social Security taxes, when you retire you’ll be subject to the windfall elimination provision. The WEP will reduce — but not eliminate — that Social Security benefit. You can read more about it at www.ssa.gov/pubs/10045.html. Like the WEP, the GPO applies to the spousal Social Security benefit of anyone receiving an annuity from a retirement system where he didn’t pay Social Security taxes. In most cases, the GPO eliminates that benefit. For more information, go to www.ssa.gov/pubs/10007.html.

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Pension benefits from different spouses

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Q. Can a widow receive survivor CSRS pension benefits from her first husband and widow’s Social Security benefits from her third husband? She is receiving both without any penalties. The widow is 74 and was collecting her own Social Security benefits before her third husband committed suicide.

A. Yes, as long is she isn’t receiving an annuity based on her own work record from a retirement system where she didn’t pay Social Security taxes. If she is, she’ll be subject to the government pension offset, which will reduce or eliminate her Social Security survivor benefit.

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Government pension offset

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Q. Will I benefit from my husband’s Social Security pension once he applies for benefits at full retirement age? Beginning Jan. 3, I will begin collecting CSRS retirement. My husband (a retired lieutenant colonel) indicated that once he reaches full retirement age, he’ll apply for Social Security benefits and that I will be entitled to a spouse’s pension from his benefit. I think that, because my CSRS pension is so high ($75,000), my benefit will offset any benefit I would be eligible to receive from him.

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 government pension offset. The GPO will reduce your Social Security spousal benefit by $2 for every $3 you receive in your CSRS annuity.

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Social Security and withholding

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Q. I am a married ex-federal employee who transferred from CSRS to FERS in 1998 and retired early under FERS with 18 years’ CSRS and eight years’ FERS in 2005. My spouse worked for the federal government for 16 years under CSRS but did not retire and is not eligible for a pension because she took her retirement contributions out in 1987 and did not return. Both of us have enough qualified work subject to Social Security to be eligible for a Social Security benefit, but just barely.

1. Is either of our Social Security benefits, or are both, subject to the windfall elimination provision or government pension offset? If so, who is affected? 2. If the answer to No. 1 is yes, does the WEP and/or GPO have a different impact on each of our decisions to take our Social Security benefit early (age 62) versus later (66)? Or, to put it another way, should we consider the fact that we are impacted by WEP and/or GPO a factor in each of our decisions to take SS at age 62? 3. Could you explain “spousal benefit” and whether being subject to GPO and/or WEP has an impact on this? 4. Does the decision to take SS early and being subject to WEP and/or GPO have any impact on the spousal benefit?

A. Because you will be receiving part of your annuity from CSRS, 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. On the other hand, because you’ve been covered by FERS for at least five years, you won’t be subject to the government pension offset.

As you noted, your wife took a refund of her retirement contributions; therefore, she won’t be entitled to an annuity. However, she will be able to receive the survivor annuity you elect. As you probably already know, you are required by law to provide her with a full survivor annuity benefit unless she agrees in writing to a lesser amount or none at all.

Because you both have earned Social Security benefits, while you are still living, each of you will be entitled to the larger of the two benefits, the earned benefit or the spousal benefit. If one of you dies, the other would be entitled to a Social Security survivor benefit in addition to his or her own earned benefit.

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Annuity reductions

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Q. My wife is a CSRS Postal Service employee with four years of military time and will retire in February with 36 years total. She did not pay back her military time. She was told by the post office that Social Security would deduct the money from her check when she reaches 62.

1. My wife does not plan on trying to collect Social Security at age 62, so will they still lower her retirement check?

2. I was told during a civil service retirement seminar that if she waited until age 68, she could go back to work and earn Social Security credits without a reduction to her CSRS postal retirement check. Is this true?

3. I will soon be a CSRS retiree (Jan. 3). I paid my military buyback. If I go back to work and earn enough for Social Security and I were to die, would my wife’s retirement check be reduced if she applied for my Social Security benefits?

A. 1. Because your wife is eligible for a Social Security benefit, at age 62 her annuity would be automatically recomputed to eliminate those four years, unless she makes a deposit to get credit for that time before she retires. Note: Unless your wife has 30 years of substantial earnings under Social Security, her Social Security benefit will be affected by the windfall elimination provision. The WEP will reduce but not eliminate that benefit.

2. Yes. Anyone who reaches full retirement age can earn as much as they want without it affecting their Social Security benefit.

3. If you become eligible for a Social Security benefit, that benefit would be affected by the WEP. Any Social Security spousal benefit to which either of you would be entitled would be affected by the government pension offset provision. The GPO would reduce that benefit by $2 for every $3 you receive in your CSRS annuities.

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Spouse’s Social Security after death

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Q. I am a retired CSRS employee. I do not receive Social Security, as I have only 31 quarters paid. My husband is a retired FERS employee, as well as retired military, and receives Social Security payments. If I outlive him, will I be entitled to a portion of his Social Security?

A. Probably not. Because you are receiving an annuity from CSRS, a retirement system where you didn’t pay Social Security taxes, you’ll be subject to the government pension offset. The GPO will reduce that Social Security survivor’s benefit by $2 for every $3 you receive in your CSRS annuity.

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Government pension offset and survivor annuity

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Q. My husband and I are both federal employees. I am CSRS, and he is FERS.

His plan is to retire in December at age 62. My plan is to retire at age 57 in June.

We both had planned on leaving the other with the maximum survivor benefit amount. However, I am rethinking this because part of my husband’s annuity will be made up of Social Security benefits.

Will that affect our ability to get the maximum benefit of each other’s survivor annuity? Or will mine, his or both of ours be subject to the Social Security government pension offset?

A. Here’s how that would play out. He would be entitled to the entire CSRS survivor annuity you provided for him, which would have no effect on either his own FERS annuity or his earned Social Security benefit. You would be entitled to the entire FERS survivor annuity he provided for you. However, any Social Security survivor benefit you were entitled to would be affected by the government pension offset provision. The GPO would reduce that benefit by $2 for every $3 you received in your CSRS annuity.

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Windfall elimination provision

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Q. I worked 30 years under CSRS and when the judge for whom I worked retired, our office was “abolished,” and the law clerk and I lost our jobs. I then worked in the civilian sector for six years. I returned to federal court under CSRS Offset for 1½ years. Because of part-time jobs and the six years I worked in the civilian sector, I was eligible for Social Security. I retired after 31½ years of CSRS and the necessary quarters for SS.

When SS sent projections before I turned 62, it indicated I would receive about $700 a month in SS. However, at age 62, when I applied for SS, I was penalized 25 percent because of age and another 40 percent due to CSRS retirement. Now I get about $400 a month and $97 deducted for Medicare. Since I qualified for my 40 quarters of SS, please explain what is fair about my being penalized 40 percent because of government retirement.

A. You are subject to the government pension offset provision of law, which reduces the Social Security benefit of anyone who receives an annuity, in whole or part, from a retirement system, such as CSRS, where he or she didn’t pay Social Security taxes and has fewer that 30 years of substantial earnings under Social Security.

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Survivor annuity and government pension offset

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Q. I am a recent retiree covered under CSRS who elected a full survivor benefit for my spouse.  She is covered under Social Security and has a significant Social Security benefit that she will qualify for when she reaches full retirement age. If I die before her and she is receiving Social Security based on her own earnings record, will her survivor benefit under CSRS be subject to the Government Pension Offset?

A. No.

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Windfall elimination provision

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Q. I am a 63½-year-old CSRS retiree with more than 32 years’ service. I spent five years with the Navy (1969-74) and paid back my military time before I entered the federal service in 1979. When I retired in 2007, I had 25 Social Security credits. I have been employed in the private sector since January 2008. I have more than 40 credits. My wife started collecting her Social Security benefits last year at age 62.

Will my Social Security benefits be affected by the windfall elimination provision or the government pension offset? Will my CSRS pension and my wife’s SS benefits prevent me from drawing Social Security (if I apply, which I intend to) before my full retirement age of 66? I plan to retire next year at age 64½. My SS statement says I’ll be eligible to collect $809 at age 66. Will I get part of this amount or nothing?

A. The windfall elimination provision reduces — but doesn’t eliminate — the Social Security benefit of anyone who receives an annuity from a retirement system where he didn’t pay Social Security taxes. For the same reason, the government pension offset not only reduces — but often eliminates — any spousal or survivor Social Security benefit.

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Survivor benefit calculations

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Q. My husband is a CSRS employee who will retire in two years. I am a FERS employee who will retire in three years. My question is this: I have always paid into Social Security, and the projected survivor benefit is $2,298. If my husband is a CSRS retiree, would he see any of that survivor benefit if I were to die before he did? If so, how would I calculate that to get a feel for what he could expect?

A. If you were to die before your husband, any Social Security survivor benefit to which he’d be entitled would be affected by the government pension offset provision of law. The GPO would reduce that survivor benefit by $2 for every $3 he received in his CSRS annuity. You’ll find a GPO calculator at www.socialsecurity.gov/retire2/gpo-calc.htm.

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