Q. I am a 57-year-old federal employee with 11 years creditable service under FERS. Earlier in life, I became disabled as a result of a line-of-service duty incident after 15 years as a California law enforcement officer. I receive a lifetime industrial disability retirement (tax-free) from the California Public Employees’ Retirement System.
I intend on retiring in five years, at 62½. Will I be subject to the windfall elimination provision due to my law enforcement employment outside of the Social Security system? Does my disability retirement play any role in reducing my Social Security entitlement? By my calculations, I will have 26 years of substantial earnings under Social Security.
Also, I’m still trying to figure out the meaning of “bend point.”
A. The windfall elimination provision will apply if you have fewer than 30 years of substantial earnings under Social Security. I’m not aware that your disability retirement benefit will have any effect pro or con on your Social Security benefit.
Social Security benefits are weighted in favor of low-income workers. The bend points you referred to are the points at which the percentages used in the benefit computation change. In 2013, the first $791 of a beneficiary’s average indexed monthly earnings (AIME) would be multiplied by .90, over $791 but less than $4,768 by .32 percent, and everything over $4,768 by .15 percent.