Q: I retired at age 57 as a Civil Service Retirement System Offset employee. I’ve enjoyed a private industry position but have learned that at age 62, my CSRS annuity will be reduced. I can retire through the Social Security Administration to recoup the reduced amount, but will be subject to an earnings limit which wipes out the entire SSA pension. Am I missing something? Are offset retirees subject to the SSA earnings limits?
A: Yes, they are. The earnings test will reduce your Social Security benefit by $1 for every $2 you earn above the limit, which is $14,160 in 2010. In the year you reach full retirement age, the reduction will $1 for every $3 over a different limit, which is $37,680 in 2011. The limit no longer applies in the month in which you reach full retirement age.