Q. I’m trying to understand how my retirement income will be affected by the government pension offset and windfall elimination provision.
I’m a CSRS Offset employee (55 years old) contemplating retirement in the next year with more than 32 years’ service. I also receive a monthly spousal annuity from my deceased wife’s CSRS service. I understand that when I turn 62, my own CSRS pension will be reduced by whatever Social Security amount I’m eligible for (should be more than 30 years of Social Security earnings), but I just read something indicating that my spousal annuity also might be reduced at age 62 due to the windfall elimination provision. Can you shed light on how this will unfold?
A. Because you are a CSRS offset retiree, at age 62 your CSRS annuity would be reduced by the amount of Social Security benefit you earned while a CSRS offset employee. You’d get the same amount, but it would come from two places: OPM and the Social Security Administration. If you have fewer than 30 years of substantial earnings under Social Security, that benefit would be subject to the windfall elimination provision. The WEP would then reduce — but not eliminate — that benefit.
Because you would be receiving an annuity from CSRS, a retirement system where at one point you didn’t pay Social Security taxes, any spousal Social Security benefit to which you would otherwise be entitled would be subject to the government pension offset. The GPO would reduce that benefit by $2 for every $3 you receive in your annuity.