Q: My spouse is a civil service employee and is planning to retire within the next eight months. He is 64 years old and will be 65 in March. He could have retired at age 55 but did not because of personal reasons. His health is beginning to fail him now, and he cannot continue to work in his current capacity.
He worked more than 10 years at other companies before joining the civil service. He can receive full retirement benefits from the Civil Service Retirement System, but he is also eligible for a very small Social Security check, they say. I work for the State Department and plan on retiring at age 62; I previously worked for a local government and took early retirement in 2006. My spouse also has an annuity on me so when he retires, he will receive his full amount less the annuity. Should he file for Social Security now, or should he wait and file for it at the same time he files for retirement, which will be three months before he actually retires?
I have paid into Social Security for more than 30 years, and I can receive my Social Security payment at 62. There is some new law that came out recently about windfall which we really do not understand. Can he apply under my Social Security when I retire for more benefits? If he does not, will it affect my benefits in any way or reduce his?
A: Because your husband will be receiving an annuity from CSRS, a retirement system into which he didn’t pay Social Security taxes, any Social Security benefit to which he might be entitled will be affected by 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. Also, if he were to still be working and applied for a Social Security benefit before reaching his full retirement age of 66, his Social Security benefit would be reduced by $1 for every $2 he received in his CSRS annuity that exceeded the earning limit. In 2010, the limit is $14,160. Finally, any Social Security spousal benefit to which he might be entitled based on your work record would be affected by the government pension offset. The GPO would reduce that benefit by $2 for every $3 he received in his CSRS annuity. What I’ve written so far applies to Social Security benefits: None of this will have any effect on his CSRS annuity. What he earned is what he’ll receive, minus the survivor annuity.
As for you, assuming that all your employment was covered by Social Security, you’ll be able to receive both your earned Social Security benefit and, if he were to die before you, a CSRS survivor annuity. On the other hand, if you will be receiving an annuity in whole or part from a retirement system in which you didn’t pay Social Security taxes, your Social Security benefit also would be subject to the WEP.