Q. I am hoping to retire under CSRS Offset soon with about 33 years of service. I am 59 years old. However, I will need to continue working full time in the private sector. I have been told that I will receive my full pension until I turn 62 years of age, at which time I will have my pension decreased by the amount I would receive from Social Security. However, I will be working full time outside of the government probably for the rest of my life. Since I will be working under the Social Security system after I turn 62, what happens to my pension? Will most of it go away at that point? Also, is it best for me to not retire and work for the Veterans Affairs Department until age 66? I have been told that at age 66, I can work in the private sector and collect my full pension. Is this true? Can you please explain this process and explain approximately what percentage deduction I will have from my pension if I retire at age 59?
A. Because you’ll be a CSRS Offset retiree, your CSRS annuity will be reduced at age 62 by the amount of Social Security benefit you earned while a CSRS Offset employee. That reduction is both automatic and permanent, whether or not you apply for a Social Security benefit.
Taking a private-sector job will have no effect on the CSRS annuity that’s left after the reduction. Besides the salary you’ll be earning, you’ll be earning additional Social Security credits that will increase the amount of that benefit when you apply for it. If you wait until you reach your full Social Security retirement age, you can continue working and receive an unreduced Social Security benefit.