Q: I was married to a military person for 10 years while he was on active duty. I will be eligible for Civil Service Retirement System retirement and understand the Social Security offset concept. I believe I will be eligible for Social Security benefits based on my ex-husband’s Social Security benefits (I never remarried). Will it be worth it to apply for Social Security benefits despite the offset due to my CSRS annuity?
Also, I withdrew three years of deposit in 1980 and was told by a co-worker that it wouldn’t be worth it to pay this back as the amount of annuity reduction will be insignificant. I currently have 32 years of CSRS time and will work another three years. Is my co-worker correct?
A: In answer to your first question, any Social Security spousal benefit will be impacted by the government pension offset. It reduces the spousal Social Security benefit of anyone receiving an annuity from a retirement system where he didn’t pay Social Security taxes, such as CSRS. The reduction would be $2 for every $3 you receive in your CSRS annuity. In most cases that eliminates the benefit.
As to your second question, if you don’t redeposit the money plus accrued interest, you’ll still get credit for it in determining your years of service; however, your annuity will be actuarially reduced based on the amount your owe, plus accrued interest, and your age at retirement. Considering how long ago you got the refund, and how much interest has accrued since then, not making a redeposit might be the better option.