Q. I’m a Postal Service employee under FERS, eligible for the Voluntary Early Retirement Authority. If I take the early-out, I’ll have 26 years and nine months of service and I’ll be 55 years of age at the time of last day of service. I’ll be 56 in June.
I understand that if I take the early-out, I don’t have to have 30 years of service to get a percentage of the special retirement supplement, based on 26 years of service (that would put me at about 65 percent of what I would get from Social Security at age 62, if I don’t work another job until then).
1. Because I would be turning 56 four months after retirement, wouldn’t my postal salary of $54,257 from my last year of service eliminate my getting any of the special retirement supplement for another six months?
2. I understand that because I’d be 55 years old at the time of retirement, I’d be able to take out all of my Thrift Savings Plan money without the 10 percent penalty for early withdrawal (I would just be taxed on it), but would that lump sum be considered earned income and come under the special retirement supplement/Social Security earning cap?
A. You would be entitled to the special retirement supplement as soon as you reach your minimum retirement age, regardless of the amount of money you earned before retiring.