Q: I am a retired FERS law enforcement officer collecting the FERS supplement. I am also an independent contractor for the State Department conducting security background investigations. Am I bound by the annual limit you can make from earned wages? The 2010 limit is $14,160. I made almost $19,800. I thought that when I retired FERS law enforcement supplemental pay had no limit. Please advise, and what happens now?
A: You were mistaken. The Social Security earnings limit applies to everyone who is receiving a Social Security benefit and hasn’t reached full retirement age (65-67, depending on the year of birth). It also applies to the special retirement supplement, which automatically eands at age 62. Your benefit will be reduced by $1 for every $2 in earnings above the limit ($14,160 in 2011). That reduction will occur when the excess earnings are detected and continue until they once more fall below the limit.