Q. Will the Social Security Administration withhold payments into the CSRS Offset portion of a federal annuity if the annuitant is between the ages of 62 and 66 (in 2013) and earns more than $15,120 per year? Or is Offset separate from the Social Security benefits that are discussed in SSA publication 05-10069?
A. Here’s how the game is played. First, as a retiree, at age 62, your CSRS annuity will be offset (reduced) by the amount of Social Security benefit you earned while a CSRS Offset employee. That reduction is automatic.
Second, if you exceed the Social Security earnings limit, your Social Security benefit will be reduced by $1 for every $2 you earn above the limit ($15,120 in 2013). In the year you reach your full retirement age, the reduction is $1 for every $3 above a different limit ($40,080). There is no reduction beginning in the month in which you reach your full retirement age.