Q: As a federal firefighter covered under the Federal Employees Retirement System, I have to retire at age 57. I have been told that that under FERS, we get a Social Security supplement and as such we are limited in what we can earn after retirement. Is this true? I know that when one retires and draws Social Security, one is limited to $14,160 per year in earnings from other sources. Is this the case when we are forced to retire at 57? A: Yes, it is. In 2010, if you were to earn more than $14,160 from wages or…
Q: Could you tell me if the payout on Base Closure and Realignment Leave and the payout for annual leave is the same? I was told that the BRAC payout is taxed at a higher rate. A. Both are taxed at the same rate. The IRS considers lump-sum payments to be regular income, with deductions being taken out for federal taxes and, where applicable, state taxes and Social Security.
Q: If I retire Dec. 31, a Friday, my first annuity check would begin on Feb 1, 2011. However, I would lose credit for any leave accumulated in that last pay period because I did not work the full pay period, which ends Jan. 1, 2011. Is this correct? A: If Friday, Dec. 31, would be the last day of a pay period and you retire at the close of business, you would get credit for any annual and sick leave you earned during that pay period.
Q: I a Civil Service Retirement System Offset employee and I am trying to decide whether to retire Dec. 31, 2010, or Jan. 1 2011. I am in the Senior Executive Service and will have over 800 hours of annual leave for a lump-sum payout. If I retire Dec. 31, is that lump sum considered part of 2010 income or 2011? I believe I will not pay Social Security tax on the lump sum if it falls in 2010, since I usually have this covered by September of each year. A: Your lump-sum payment is considered to be earned income…
Q: Is the $14,160 earning limit on early retirement gross, or net? I am self-employed and have expenses. I do not net more than $14,000. A: The earning limit is the gross amount of your income, not the net.
Q: What advantages, if any, are there for a retired federal employee whose primary residence is Thailand to enroll in Medicare? I am 68 years old, receiving Social Security benefits, and I am enrolled in the Blue Cross federal employee plan. A: Because Medicare generally does not cover health services you get outside the United States, it depends on whether you will be a permanent resident of another country or will be returning periodically to the U.S. At a minimum, you should enroll in Medicare Part A (hospital) because that coverage is free. You already paid for it through payroll…
Q: Do biweekly or yearly pay cap limits apply to restored Base Closure and Realignment Leave? A: No, they don’t.
Q: I am considering retiring, but need to know whether there is a specific form I must complete in order to continue my Blue Cross and Blue Shield insurance after retirement? I have had BCBS for over 5 years. A: No special form is required. Your coverage will continue seamlessly without your doing anything other than your checking the box confirming your eligibility on the Application for Immediate retirement: Standard Form 2801 (Civil Service Retirement System) or 3107 (Federal Employees Retirement System).
Q: Is the Special Retirement Supplement check taxable each month? A: The Special Retirement Supplement is included in your annuity payment and is taxed at the same rate.
Q: In your Jan. 25 article “New year, same COLA,” you say that the Social Security withholding stays at $106,800, and that “if you are a Federal Employees Retirement System or Civil Service Retirement System Offset employee, any amount you earn above that amount won’t be subject to the 6.2 percent Social Security deduction.” However, I am a GS-810-14, Step 10, Forest Service employee under CSRS Offset and the National Finance Center withholds Social Security from my paycheck for the entire year. Withholding from my paycheck doesn’t cease at the $106,800 limit. This seems contradictory to what the article states.…