Q. I retired from the Postal Service on Jan. 31. I am 60 years old and I took the Voluntary Early Retirement Authority. I received an $11,000 annual leave payment, and the $10,000 buyout. I also receive a widow’s benefit from Social Security of $9,000. Will this money be counted as earned income on my income taxes against the $15,120 limit? I also receive the special retirement supplement.
A. The annual leave and buyout money are considered earnings. The widow’s benefit and special retirement supplement aren’t. Under normal circumstances, the $21,000 and the salary you earned during your last month would put you over the earnings limit. However, there is a first-year rule that may protect you from that. Learn more about it and how it applies to you at www.ssa.gov/retire2/rule.htm.