Q. I have about 15 years under CSRS Offset and I am 55 years old. Since part of my annuity is funded through Social Security contributions, what happens to my annuity (besides a reduction in my total time in service) if I retire at say 60 or 62 before I reach full Social Security retirement age (66 and four months)? Do I receive the full CSRS calculated annuity or is it reduced by some fraction to adjust for the Social Security portion? If so, how is that calculated?
A. If you are already retired, at age 62 your CSRS annuity will be reduced by the amount of Social Security benefit you earned while a CSRS Offset employee. If you retire on or after reaching age 62, the reduction will occur on the day you retire. You’ll still get the same amount of money, it will just come from two different places. However, if you have fewer than 30 years of substantial earnings under Social Security, you will be subject to the windfall elimination provision. Although it’s unlikely to affect the portion you earned while covered by CSRS Offset, it could reduce any additional Social Security benefit to which you may be entitled based on nonfederal work. Note: Just because your CSRS annuity will be offset doesn’t mean that you have to apply for a Social Security benefit at that time. You can, if you prefer, defer applying for that benefit to a later date to lessen or eliminate the reduction that automatically occurs when you begin receiving a Social Security benefit before reaching your full retirement age.