Q. Hi, I have just retired under FERS after 34.5 years at the U.S. Postal Service. I understand that Social Security will penalize me if I earn more than $17,640 per year. I know they take $1 for every $3 that I earn over that amount. Do I just lose that money?
A. The Social Security earnings test will only apply to the special retirement supplement you are receiving, not your basic annuity. And, yes, any reduction in the SRS for a given year will be permanent. The same is true when you become eligible for a Social Security benefit at age 62.