Q. I am a foreign service officer and plan to retire at age 51 under FSPS (similar to FERS). FSOs may retire as early as age 50 if they have at least 20 years of service. I had understood that the Social Security earned income limit (currently $14,160) would be applied to my annuity supplement (like FERS supplement) after my first year of retirement.
However, another FSO who is already retired told me that her tax accountant told her that income over the $14,160 earned income limit does not reduce the FSPS annuity supplement until the retiree reaches 56 years old. In essence, then, a retiree receiving the FSPS annuity supplement should be able to earn as much as he wants in another job without fear of reducing their FSPS annuity supplement, as long as he is under age 56. Is this true? I cannot find confirmation of this information on any State Department or other federal government website. My retirement counselor at the State Department is not aware of this issue.
A. The special retirement supplement isn’t subject to the Social Security earnings limit, which only applies to earnings from wages or self-employment. The 2012 limit is $14,640.