Q. After 38 years of contribution to my retirement fund, of $78,000, why do I have to wait for a full annuity payment? The money is there, and I need my full annuity monthly. Who can I speak to in order to get what I worked for? Also, why do I have to pay taxes on my annuity every month when I paid taxes when I was working for 38 years? I am under CSRS and my retirement date was five months ago.
A. You have to wait because the Office of Personnel Management is both short-staffed and overloaded with retirement applications. I’m sorry to have to tell you that there’s no one you can talk to who will be able to accelerate your full annuity payment.
As for why you have to pay taxes on your annuity, each of your monthly annuity payments is made up of two parts: the tax-free part that is a return of your contributions to the retirement fund, on which you already paid taxes, and the contributions made by the government, which weren’t taxed. Using a formula based on life expectancy tables, a portion of your monthly annuity will be tax-free and the rest will be taxable. You can read more about this provision of law and the method you’ll be required to use to determine the tax-free portion by reading IRS Publication 721, Tax Guide to U.S. Civil Service Retirement Benefits, available online at www.irs.gov/pub/irs-pdf/p721.pdf.