Q. I am 56, was hired in April 1982, and have worked for the federal government (CSRS Offset) for 30 years, including two years and four months of active-duty service. I did not repay my military deposit. However, I would like to retire in August. I read that I would have a reduced annuity of 1/8 of 1 percent per month. If this is correct, would I still be able to retire as planned in August?
A. Because you were hired before Oct. 1, 1982, you have a choice. You can either make a deposit for your period of military service or not make one. If you don’t, you’ll still get credit for that time in determining your eligibility to retire and in your annuity computation. However, if you are retired, when you become eligible for a Social Security benefit at age 62, that period of active-duty service will be eliminated and your CSRS annuity recomputed without it.
Because you are a CSRS Offset employee, there is one more step. At age 62, your CSRS annuity will be reduced by the amount of Social Security benefit you earned while covered by CSRS Offset. The offset will occur whether or not you apply for a Social Security benefit.
P.S. The reduction of 1/6 of 1 percent per month (not 1/8) applies to CSRS employees who take early retirement before reaching age 55.