Ask The Experts: Retirement

By Reg Jones

Social Security quarters and CSRS benefits

Bookmark and Share

Q. If I retired with 34 years of CSRS benefits and have now earned 40 quarters Social Security, will I be able to draw Social Security benefits?

Read the rest of this entry »

Tags: , , ,

WEP

Bookmark and Share

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.

Tags: , , , , ,

Military buyback

Bookmark and Share

Q. I will have 39 years of total service as of May 12, of which four years are military service and 35 years civilian service. I have my 40 quarters paid in. Will I have to buy back my military time to achieve my 80 percent at retirement (41 years, 11 months)?

A. Yes, you will. Otherwise, when you retire, those years of active-duty service for which you haven’t made a deposit will be eliminated and your annuity recomputed without them. That will happen at age 62, if you are retired, or when you retire if it’s after that.

Tags: , , , ,

Social Security and CSRS

Bookmark and Share

Q. I am not eligible for Social Security retirement. I have 35 quarters of coverage and need 40. I was told if I waited until after age 62 and then earned my 40 quarters and became entitled to Social Security retirement, I would not receive a reduction to my CSRS retirement check. Is this true?

A. As a CSRS retiree, you would not have your annuity reduced if you were eligible for a Social Security benefit. However, because you are receiving an annuity from a retirement system where you didn’t pay Social Security taxes, you’d be subject to the windfall elimination provision. The WEP would reduce your Social Security benefit if you had fewer than 30 years of substantial earnings under Social Security.

Tags: , , , ,

CSRS Offset

Bookmark and Share

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.

Tags: , , , , , , , , ,

Buying back retirement credits

Bookmark and Share

Q. I worked for the Postal Service from late 1979 until about 1991. I had a lot of personal and work-related problems and was also given a letter of termination. I decided to quit. I also tried to pursue a disability, but I dropped that because of stress and depression.

I withdrew my retirement to pay an accumulation of four months of bills and rent that I was behind in. I vaguely recall reading that there was a buyback of retirement. Is this true? I am applying for Social Security benefits. I am only 58, but, due to health concerns, am not able to work. I have 31 Social Security credits and need 40 for full benefits. If I could buy back those years of retirement, I would have the full number of credits.  I honestly don’t know how all this works.

A. If you took a refund of your retirement contributions when you left, you wouldn’t be entitled to any retirement benefit nor could you redeposit that money, plus interest, to get credit for that service unless you returned to work for the government. If you left your contributions in the retirement fund, you’d be eligible for a deferred annuity at age 62.

Tags: , , , , , , , , , ,

CSRS retirement and no military payback

Bookmark and Share

Q. I have 38 years under CSRS and have not paid back my four years of military service. I am 63 years old and am thinking about retiring this year. I have 40 quarters under Social Security. When I retire, am I eligible for a partial Social Security annuity, along with my federal retirement pension?

A. You’ll get full credit for your active-duty service in determining your length of service. However, when you reach age 62, your annuity will be recomputed without those four years, which will reduce your annuity. While you’ll be eligible for a Social Security benefit, it will be affected by the windfall elimination provision. The WEP will reduce that benefit if you have fewer than 30 years of substantial earnings under Social Security.

Tags: , , , , , ,

WEP

Bookmark and Share

Q. I am retired under CSRS, and have more than 40 credits of Social Security accrued. I am almost 62, and want to apply for Social Security benefits. How much will the windfall elimination provision hit me for? I spoke to several other CSRS retirees, and only a few said they took a 60 percent reduction, while some took no reduction. I can’t figure why each case appears to take a different amount off due to WEP.

A. Anyone who receives an annuity in whole or part from a retirement system where he didn’t pay Social Security taxes is subject to the windfall elimination provision. The WEP reduces but doesn’t eliminate the Social Security benefit of anyone who has fewer than 30 years of substantial earnings under Social Security. For more information about the WEP and how it works, go to http://ssa.gov/pubs/10045.html.

Tags: , , , , , ,

Retirement and reinstatement

Bookmark and Share

Q. I am 64 and plan on retiring out of civil service so that I can move back home. Even though I am not ready to retire, can I leave in my FERS annuity so, if and when I can find another position with another government agency and get reinstated, I can continue with my retirement fund? I plan on working part time, since I have over 40 credits in Social Security to help out.

A. If you simply resigned, left your contributions in the retirement fund, and found another job at a later date, you could be reinstated. However, if you retired, you couldn’t be reinstated. Instead, if you found a job, you would be a re-employed annuitant. As such, with rare exception, the salary of your new position would be offset by the amount of your annuity.

Tags: , , , , ,

WEP

Bookmark and Share

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.

Tags: , ,

Social Security quarters and annual leave lump sum

Bookmark and Share

Q. I will retire this year under CSRS. I lack three quarters to qualify for Social Security benefits. Will Social Security taxes be deducted from my lump-sum payment for annual leave?

A. If you are a regular CSRS employee, you haven’t had any Social Security taxes deducted from your pay and you won’t have any deducted from your lump-sum payment.

Tags: , , , ,

Social Security quarters

Bookmark and Share

Q. I worked for the Department of Corrections as an officer for 18 years. I had a private retirement plan, so the department didn’t pay into Social Security. Then I had a medical retirement. Will I still receive any benefits? Prior to working for the department, I had worked and accumulated 38 quarters, which didn’t amount to much money. Do I still also have to get to 40 quarters?

A. No, you won’t receive any Social Security benefit unless you have 40 credits. To get the additional two credits you need, you’d have to earn $2,260 in wages or self-employment in 2012. Next year, that amount will be a little higher.

Tags: , ,

Social Security quarters

Bookmark and Share

Q. I’m 59 years old and have 38 years government service under CSRS. I have 39 quarters Social Security paid in. Do I only have to work one more quarter to qualify for Social Security by the time I’m 62? Someone told me I had to work so many quarters in the last 10 years.

A. You only have to have 40 credits under Social Security to qualify for a Social Security benefit at age 62. Just be aware that if you are still working when you apply for that benefit, it will be affected by the annual earnings limit, which will reduce that benefit by $2 for every $3 you earn above the limit. In 2012, that limit is $14,640. If you are retired, you’ll be subject to the windfall elimination provision, which will reduce but not eliminate your Social Security benefit if you have fewer that 30 years of substantial earnings under Social Security.

Tags: , , , ,

CSRS vs. disability retirement

Bookmark and Share

Q. I am a CSRS employee with 33 years of federal service and I am 54 years old. My agency (the Postal Service) is offering a Voluntary Early Retirement Authority at the end of January. I am a disabled vet with 80 percent rating. Should I take the VERA or apply for medical retirement? I have paid all required quarters for Social Security, and have a daughter still in school. Which method is more beneficial? I plan to apply for 100 percent Veterans Affairs compensation as service-connected injuries are more disabling.

A. Based on your years of service, the only advantage of retiring on disability rather than taking voluntary early retirement is that in the latter case, your annuity would be reduced by 1/6 percent for every month you were under age 55. On the other hand, retiring under the VERA would be trouble-free, while applying for disability retirement not only requires a lot of time and effort, but there’s no guarantee that your application will be approved.

No matter which way you go, the fact that you will be receiving an annuity from a retirement system where you didn’t pay Social Security taxes will mean that 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. Your VA compensation won’t be affected under either scenario.

Tags: , , , , , , , , ,

Social Security and CSRS Offset service

Bookmark and Share

Q. I worked for an independent federal agency from 1977 to 1989 that had its own retirement system. I had a break in service for one year, then returned to work for the Transportation Department, where I was erroneously placed in FERS by HR. In 2006, following a FERCCA ruling that took more than 2½ years, I chose to be placed in the CSRS Offset program 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 that 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 since I have more than 30 quarters of SS. Should I file for SS at age 62, since I will receive a possible reduction, or will I receive no reduction in SS benefits?

A. Your CSRS Offset annuity will be reduced at age 62 by the amount of Social Security benefit you earned while covered by CSRS Offset. The reduction is automatic. In addition, you may be subject to the windfall elimination provision. The WEP will reduce your Social Security benefit if you have fewer than 30 years (not 30 quarters) of coverage under Social Security.

Tags: , , , , ,

Social Security quarters

Bookmark and Share

Q. I am a 65-year-old federal employee on the CSRS retirement plan. I plan to retire next month after 39 years in the government. I have earned 20 quarters of Social Security credits but need 20 more to qualify for any benefits. Would it be worth my while to work for five more years (20 quarters) in private industry to qualify for these benefits, or will it all be offset by the CSRS retirement? If I choose to work, what is the minimum amount of money I have to make each year or what is the minimum number of hours I have to work each year to qualify for Social Security benefits after five more years (20 quarters) of work?

A. The windfall elimination provision reduces but doesn’t eliminate the Social Security benefit of anyone who receives an annuity from a retirement system, such as CSRS, where he didn’t pay Social Security taxes. Therefore, if you worked in the private sector and earned enough additional credits to be eligible for a benefit, you’d get something. To get one credit in 2012, you’d have to earn $1,130. To get four, your have to earn $4,520, and you could do that all at once or over time. The amount needed to get one credit is adjusted each year by the amount of the annual cost-of-living adjustment.

Tags: , , , , , ,

WEP

Bookmark and Share

Q. I worked in high school and through college paying into Social Security and earned 28 quarters. From 1974 to 2009, I worked under CSRS and paid no Social Security. Upon retirement, I collected my monthly annuity from CSRS, then started working in private sector and will get my 40 quarters in January. I turned 62 in October. How is the reduction computed for my monthly Social Security payments? My monthly retirement is around $6,500 from CSRS.

A. Your Social Security benefit will be affected by the windfall elimination provision. The WEP reduces the benefit of anyone who is receiving 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 your Social Security benefit would be affected, go to www.ssa.gov/pubs/10045.html.

Tags: , , , , , ,

WEP

Bookmark and Share

Q. I retired from civil service March 31 after 45 years and nine months under CSRS. Before that, I served three years in the military (1962-65), and other private industry jobs throughout the years went to Social Security to earn 40 quarters. At age 65, I started drawing a Social Security pension. Now, Social Security says it is reducing that check by half and I have to repay half of what was paid to me since April 1 unless I can prove it was not my fault I received the money. What? This all because I retired and started drawing my CSRS pension. What did they expect me to do, work until I drop dead? Why am I being penalized for working for the government?

A. Because you are receiving an annuity from a CSRS, a retirement system where you didn’t pay Social Security taxes, you are subject to the windfall elimination provision. The WEP reduces the Social Security benefit of anyone who has fewer than 30 years of substantial earnings under Social Security.

Tags: , , , , , , , ,

Military buyback, Social Security, high-3 and TSP

Bookmark and Share

Q. I have 33 years in and am under CSRS. I will be 60 years old in May. I served less than two years in the Army in my 20s. I am a WG-8 making almost $25 an hour. I receive correspondence statements from Social Security that if I retire at age 62, I would be eligible for approximately $300 based on a second job 12 years ago and jobs before joining the government in the 1980s.

1. Should I buy back the time I have in the Army?

2. Will the buyback help increase my Social Security? Or will the money from Social Security lower my pension?

3. Should I get a part-time job to increase my Social Security benefit? I know I am not eligible for disability based on not having 40 quarters, but will the small amount of time I have paid into Social Security help or hurt me when I want to retire at 62?

4. Is there anything current on whether the top three years will be changed to top five? And, if it gets changed, should I retire before it is implemented?

5. Are there any ways to increase my pension other than saving with the Thrift Savings Plan or getting a second job (see above question)? I have reservations with TSP because of the taxes. I have money in it but am not saving. My understanding is I can’t touch it without penalty until age 62. Is this correct?

A. Reg: Because you were first employed before Oct. 1, 1982, you’ll get credit for your active-duty service in determining your eligibility to retire and in your annuity computation. If you aren’t eligible for a Social Security benefit at age 62, your annuity won’t be affected. The Office of Personnel Management only checks once, at age 62, if you are already retired, or when you retire if it’s at age 62 or later.

If you take a job after retirement and earn enough credits to be eligible for a Social Security benefit, it will be affected by the windfall elimination provision. The WEP reduces 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.

Mike: You’ll have access to your TSP money, without any early withdrawal penalty, as soon as you retire from federal service.

Tags: , , , , , , , , , , , ,

Military service, Social Security and retirement

Bookmark and Share

Q. I plan to retire at 32 years of federal service under CSRS. I have six months of military service that have not been paid off. Is that going to affect my 40 quarters of Social Security?

A. If you don’t make a deposit for those six months of active-duty service, your CSRS annuity will be actuarially reduced by 10 percent of the amount you owe, plus accrued interest. Because you will be 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 because you have fewer than 30 years of substantial earnings under Social Security.

Tags: , , , , ,