Monthly Archives: August, 2010

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…

Q: I’m retired Army chief warrant officer 3 and worked 13 years as an Army contractor. I’ve been in civil service for nine months as a logistics management specialist. Can my 13 years of contracting time in a job similar to what I do presently be counted toward pay and leave time for the civil service? If so, what forms do I need to submit? I am getting conflicting information. A: No, it can’t.

Q: I am an employee with U.S. Customs and Border Protection in a covered 6(c) law enforcement position. I have 19 6(c) law enforcement years for retirement purposes. I am also in the National Guard. If I enter the active-duty Army and take leave without pay for the next five years, which years would be included to make up my “high 3” for retirement purposes under the Federal Employees Retirement System? Is the high-3 calculation based on actual money earned (i.e., the three years prior to entering active duty with the military), or is it based on my paygrade and…

Q: I am need to clarify whether disability retirement becomes nontaxable once a person reaches retirement age. I cannot get a clear answer from the Office of Personnel Management or the Internal Revenue Service. I have gone over IRS Publications 721 and 525. My father left the Post Office on disability in 1972. He is now 78 years old, and I am trying to file his tax returns. He is not eligible for Social Security. A: There isn’t a tax break for a federal disability retiree unless he is totally disabled for all gainful employment. The retiree’s age has no…

Q: There are several of us around the office who are close to retirement (i.e., the next three or four years), and we’ve heard rumors that lump-sum settlements will change starting in 2013 and that the calculation will result in reduced lump-sum payment amounts. Are there any changes coming in 2012 and beyond that will affect our lump-sum payments? When I go to my Fidelity website and look at my projected lump-sum payments in 2012, 2013 and 2014, I don’t see any reductions. I’m wondering whether it has something to do with taxes changing on the lump-sum amounts starting in…

Q: My husband is retiring with 40 years in the Civil Service Retirement System. We chose a survivor annuity. At age 62, I am eligible for a reduced Social Security benefit on my own earnings. If he dies, is my CSRS survivor annuity affected by my Social Security benefit, or vice versa? A: As long as you aren’t receiving an earned annuity from a retirement system where you didn’t pay Social Security taxes, neither your CSRS survivor annuity nor your earned Social Security benefit will be affected.

Q: I am helping with my sister’s income taxes. On her 1099-R, Box 2A, the taxable amount is unknown. I don’t know how to report whether her survival annuity is taxable or nontaxable. A: While most of her annuity will be taxable, a portion will not. To find out how much of it will be tax-free, download a copy of IRS Publication 721, Tax Guide to U.S. Civil Service Retirement Benefits.

Q: Can my time as a nonappropriated fund employee be used toward retirement now that I work in a GS position? I worked twice as a NAF employee with a break in service, and I have been trying to get credit for that time. I received an e-mail today saying that because there was a service break of more than three days, my time will not count. A: Your agency is correct. Your NAF time isn’t creditable if you had a break in service of more than three calendar days.

Q: My wife is a government employee who was reinstated from former government service (she resigned in 1993). She entered government service in 1980 and was under the old retirement service. She resigned to have a child in 1984 and withdrew her retirement. She was reinstated in 1986 and came under the new retirement system. She again resigned and was reinstated in 2009. She has more than 13 years of government service. Can she pay back the retirement she received plus contributions she would have made over the years to fall back into the old retirement system? A: She may…

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