Ask The Experts: Retirement

By Reg Jones

Special retirement supplement and earnings test

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Q. I am retiring at 57, the mandatory retirement under FERS for law enforcement. I know there is something called the first year rule; will the special retirement supplement I receive for approximately five years be subject to the earnings limit? I heard the supplement is not subject to it, but when I reach age 62 and the supplement ends, any Social Security I receive will be subject to it. Can you clarify if the supplement law enforcement officers receive under FERS if retiring at the mandatory retirement age is subject to earnings test? If so, when?

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CSRS offset and Social Security

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Q. I am in CSRS offset, and I am eligible to retire now.

I expect to be working past age 66, when I can collect full Social Security benefits. If I collect the benefits and continue to work, how will my retirement calculation change when I retire? Most, but not all, of the Social Security benefits were earned while I was under CSRS offset.

Also, how would my retirement be affected if I collect the Social Security before age 66?

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Earnings test for FERS retiree

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Q. For a FERS retiree at 50, working air traffic controller, so no earnings test applies to FERS supplement until MRA of 56:

Assuming the retiree earns significant income, and birthday is June 1, when does the earnings test apply? There is some confusion about Social Security earnings test beginning at the end of the year in which they turn 56, and others say it would apply at the end of the month in which they were born.

A. The answer is at www.opm/gov/retire/pubs/handbook/C051. Scroll to Section 51A3.1-1D.

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CSRS Offset and Social Security eligibility payments

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Q. My husband is employed and is a CSRS Offset employee. He is retiring in December 2013 at the age of 66½. Friends have told us he can apply for Social Security now, while he is just 65, and start earning a Social Security retirement benefit check. When he retires from the government, the SS retirement benefit will stop because he is CSRS Offset. Is this correct? Is there any reason an individual would not want to apply for Social Security retirement benefits while still working? I don’t know how much it would be, but for 16 months, it would be extra income every month that he wouldn’t normally get and won’t get after he retired next year.

A. Since he was born between 1943 and 1954, his full Social Security retirement age is 66. If he were to apply for a Social Security benefit while still working and not yet 66, he would be subject to the Social Security earnings test. That would reduce his Social Security benefit by $1 for every $2 in earnings about the annual limit. In 2012, that limit is $14,640.

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FERS supplement earnings test

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Q: I retired at age 52 under a Federal Employees Retirement System law enforcement (1811) retirement. I am now 55 and am employed. I generally understand the earnings test that will apply to my FERS supplement beginning the year I reach my minimum retirement age, but I am not clear how it is calculated the first year. I will reach my MRA in 2011 at the age of 56. Are my earnings for the entire year of 2011 calculated, or do they only calculate the earnings after I turn 56? I have not been able to get an answer from the Office of Personnel Management on this.  

A: There’s a special rule for the first year you retire. How your income will be treated is spelled out in a Social Security Administration publication. You’ll find it here.

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