Q. I retired at the end of December. I received my lump sum annual leave payout in January. I am receiving a FERS annuity in addition to my pension. Will this money be counted toward the earnings test for 2012?
A. No, your lump sum annual leave payment won’t be subject to the Social Security earnings test. That’s because you’ll be covered by the first year rule. See www.socialsecurity.gov/retire2/rule.htm. Note: Only earnings from wages and self-employment are subject to the earnings test, not annuities.