Q. I retired as a federal employee in 2007. I took an early-out and am receiving my pension. I was CSRS Offset. I am working full time at a local school district and am 58 years old. The way I understand what I’ve read so far is that when I turn 62, using the formula that has been in your other responses, Social Security will be paying about $550 of my annuity payment.
I will have 28 years of Social Security payments when I reach 62. My Social Security benefit at that point, should I retire, will be 20 percent less than full payment minus the $550 that goes toward my annuity, plus I would be hit with a percentage for the windfall elimination provision? If that’s correct, it sounds as though it would be to my advantage to work until at least age 64, when I’ll have 30 years of paid Social Security, so as to not have to pay the windfall, or until full retirement at 66. Is that right?
A. There’s a calculator at www.ssa.gov/retire2/anyPiaWepjs04.htm that can help you determine the amount of the offset in your CSRS annuity that will occur when you are eligible for a Social Security benefit at age 62.
Three things to keep in mind: First, that reduction will happen even if you don’t apply for a Social Security benefit.
Second, the reduction will be based solely on the Social Security benefit you earned while a CSRS Offset employee.
Third, if you are still working and under full Social Security retirement age, your Social Security benefit will be subject to the annual earnings limit. If you exceed that amount, your Social Security benefit will be reduced by $1 for every $2 above the limit. In 2012, that limit is $14,640.
