Ask The Experts: Retirement

By Reg Jones

Taking benefits retroactively

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Q. As a younger federal employee with seven years in, I’m left wondering how I can plan for retirement with Congress constantly threatening to not only change contribution amounts, but benefit payouts. What, if any, limits does Congress face in reducing pensions? Since I’ve already worked 7 years and both I and my employer made contributions during that time, isn’t there an account somewhere with money deposited in my name? Or can Congress come in when I’m 61 and decide to vacate entirely the pension I’ve already earned? I understand changes in calculation of payout growth like what the military has faced, but the Simpson-Bowles Commission, for instance, proposed changing from 1 to 0.7 percent salary payout per year worked. Would that only be for new employees, new years worked, or retroactive? Put simply, is anything in my pension statement legally guaranteed, or can it all be taken away after the work is done? Read the rest of this entry »

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State to federal

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Q. I’m considering moving from a state job in New Jersey to a federal job. Will any of the state pension deductibles be transferable to the federal government?

A: No.

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Retiring at 30 years with FERS

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Q. I am a FERS employee with 22 years of service. I will have 30 years of service in eight more years and will also be 50. Can I retire with 30 years of service and collect (i.e., request an early retirement package)? I’ve read the deferred retirement, but my understanding is I would not be able to receive a pension until my MRA, 57.

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Pension for working at VA hospital

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Q. I worked for the VA hospital in San Francisco for six years as a registered nurse from 1991 to 1997.

I was vested, but how do I find out if I have a pension and how and when I may be able to collect it if I am eligible?

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Retirement and insurance with more than 30 years in CSRS

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Q. I am 55 with 36 years of federal employment, including two one-year breaks in service. The last break was in 1985. I withdrew the funds I had paid into CSRS each time I broke service and have repaid a minimal amount of it. I thought I would be one of those people who worked forever; however, I have a progressively degenerative medical condition and likely will not be able to work more than another year at the most. I am totally ignorant about retirement and to what benefits I am entitled. For example, will my pension benefits be reduced because I am retiring early? Do I continue to pay the same health insurance rates once I retire until I become eligible for Medicare? Will my health benefits remain the same until I become eligible for Medicare? I used the pension calculator and am more confused. For example, I calculated using the percentage for the first five years and the different percentage for the next five years, and then the 2 percent for the remaining years past 10. Is this the amount plus interest, plus matching funds what I pay into CSRS from my paycheck, or do I have to do yet other calculations? I have requested a meeting with my HR department, but it has to wait until it receives information for payroll and tells me it will be weeks before I can get a meeting. My neurosurgeon and neurologist are telling me I should consider retiring immediately, but I need to make this major decision as knowledgeably as possible.

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Pension amount

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Q. I retired from the military after 22 years of active duty and receive a VA pension and 10 percent disability pension. Since then, I have been in the federal government for 10 years, and I hope to retire at 20 years and 62 years old. What will my retirement look like?

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MRA retirement and pension, health insurance

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Q. I am 50, have 20 years under FERS and am thinking of retiring in six years when I reach my MRA of 56. If I do this, will I get health insurance coverage right away? Also, can I retire at 56 but delay retirement payments until 60 (or is it 62?) so I can avoid the 5 percent-per-year reduction in the payout? My main concern is keeping health insurance in place as soon as I retire at 56 — I can afford to delay the payout.

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High-3 and locality pay

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Q. I am a FERS GS-11 step 10 employee planning to retire at 66 with 25 years of federal service in 2016. Pensions are based on the high-3. Is the high-3 based on base pay for the grade and step or base plus locality percentage? The 2012 GS Base table shows 11 step 10 as $65,371. Base plus locality equals $77,138, or an addition of 14.16 percent or $11,767 over base.

There is a large difference when calculating retirement figures using $65,371 versus $77,137.

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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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Credit for part-time service deposit

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Q. From 1983 to 1985, I worked part time for the USDA. I was a student at the time, so when I graduated, I left for a job in the private sector, and my retirement deductions were paid back to me. I was later hired by the Department of the Army, where I have been ever since.

I recently made a service deposit for my USDA time. I served with USDA for 25 months, but the part-time hours add up to 15 months full-time equivalent. Will this add 15 months or 25 months to my FERS pension?

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Deferred annuity receipt age and formula

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Q. I resigned from federal service in July 2011. I have 15 years of service and am 53. I was a FERS employee. I’m trying to figure out what my retirement will be. My understanding is that I can start drawing my pension when I’m 56. I also understand there is a 5 percent penalty for each year under 62, meaning if I started taking my pension at 56, it would be reduced by 30 percent.

It is also my understanding that the way to figure out what my pension would be is to use .01 x high-3 x years and months of service. Am I right?

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Pension eligibility

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Q. I worked for the National Security Agency from 1961 to 1968. Am I eligible for a pension?

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Pension payout increase

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Q. If I retire before age 62 but do not claim my pension (FERS) until I am 62, do I receive the 10 percent increase in pension payout for those 62 or older?

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Retirement and disability benefits with private contract

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Q. My father is receiving both a disability benefit and a monthly federal pension from CSRS. His wife is in a nursing home and has been on Medicaid since June 2011. Her Social Security is paid directly to the nursing home. She is given only a small amount and the nursing home keeps the remainder.

If my father should pass before her, will the CSRS survivor annuity amount go directly to the nursing home, as well?

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Two pensions?

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Q. I retired from the Marine Corps after 21 years of service in 2002 and I’m receiving retirement pay. I began working with the State Department and will be eligible to retire at age 59 with 20 years of service. Will I be able to retire from the State Department and receive a pension and still receive my pension from the Marine Corps?

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Step increases during disability

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Q. I am a veteran of the armed forces and a civilian federal firefighter of Hawaii and have about 13 years government time under FERS.

While on duty in 2010, we were in route in the fire engine and an oncoming vehicle lost control and collided with the fire engine, causing substantial injuries to myself and the crew. The majority of the kinetic energy was absorbed by me because the point of impact was where I was seated.

I sustained injuries to my lumbar area in my lower back and injuries to my left limb, for which I’ve undergone a major back surgery, countless doctors’ visits and therapies, etc. I am still recovering from the injuries and presently on modified light duty at four hours a day, five days a week. I was on total disability for about 2 years and noticed that my retirement investment into my Thrift Savings Plan was at a freeze or standstill, where an injured employee could not invest into their TSP while on leave without pay. I also noticed that while on total disability, an injured employee goes into LWOP status, which human resources said affects your within-grade increases to where you are not entitled to move up in step increases.

Is there a new law that helps with retirement benefits for workers hurt on the job? After intensive research, I stumbled across an article by Stephen Barr dated Oct. 10, 2003, informing that President Bush signed legislation that will help make up any shortfall in retirement benefits for federal employees who are disabled or injured while on the job. It mentions the new law will change the way a federal employee’s benefits are calculated during a disability by increasing the pension benefit provided under FERS to cover any shortfall.

Is there also any new law or standard act that helps with entitlements for step increases for workers hurt on the job? Ever since I was injured on the job in 2010, and because of the injuries I sustained I was on total disability in LWOP status not by choice, the opportunity to move up in step increase passed me over twice. As co-workers who were hired the same day as me moved up in step increase, I was denied. Can you advise?

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CSRS annuity, other income and taxes

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Q. I plan to retire this year and start my own business. I am CSRS Offset and 55 years old. How will any income I make from my business affect my pension and taxes?

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Resignation and pension

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Q. I am 45 years old with 13 years of service under FERS and will be resigning this month to pursue other activities. I understand that I would eligible for a full pension (computed on my high-3) at age 62. That is 17 years away and, in the meantime, my defined benefit pension would remain static and thus be seriously eroded by inflation. Is there a way to protect myself against this within the pension system, or can I take a lump sum on separation and roll that into an IRA? If I take the lump sum, must I do it as of my separation, how is it computed, and does it represent only my contributions to the basic pension, or also those of the government? I have a separate Thrift Savings Plan, which I plan to roll into an IRA.

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WEP

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Q. I retired in 2011 with 30 years and three months employment with the Postal Service at the age of 56 years and six months with a CSRS pension. I had 32 quarters of paying in to Social Security when I retired. I worked part time from June 2012 to October 2012 for an insurance company and earned about $6,200. How many more quarters do I have to go to receive a supplemental Social Security pension, and is it also true that I will only receive about one-third of what I would normally be entitled to?

A. You have already earned four credits in 2012. If you earn $4,640 in 2013, you’d get four more credits and be eligible for a Social Security benefit.

Yes, it’s true that your Social Security benefit would be less than it would have been if you didn’t receive an annuity from a retirement system where you didn’t pay Social Security taxes. Because you do — and because you’ll have fewer than 30 years of substantial earnings under Social Security — you’ll be subject to the windfall elimination provision.

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CSRS Offset

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Q. I worked for an independent federal agency from 1977 to 1989, which had its own retirement system that was neither CSRS nor FERS. I had a break in service for one year then returned to work for the federal government (Transportation Department), where I was erroneously placed in FERS by human resources. In 2006, following a FERCCA ruling that took over 2½ years, I chose to be placed in CSRS Offset rather than FERS. I paid Social Security as a federal employee (plus through part-time jobs dating back to 1970) until I retired in 2010 with 32 years of service. I was told I would receive a reduction to my pension and/or Social Security at age 62 due to the offset. I have also read that there will be no reduction because I have more than 30 quarters of Social Security. Should I file for Social Security at age 62 since I will receive a possible reduction, or will I receive no reduction in Social Security benefits?

A. Because you are a CSRS Offset retiree, at age 62, your annuity will automatically be reduced by the amount of Social Security benefit you earned while a CSRS Offset employee. Further, you may be subject to the windfall elimination provision, which reduces the Social Security benefit of anyone receiving an annuity in whole or part from a retirement system where he didn’t pay Social Security taxes and has fewer than 30 years (not 30 quarters) of substantial earnings under Social Security. To see how that might apply to you, go to http://ssa.gov/pubs/10045.html.

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