Q. Upon retirement from civilian government service, if you chose the survivor benefits plan for your spouse, are the payments deducted monthly from your retirement pay taxable by the government? A. Payments aren’t deducted monthly for a survivor benefit. Instead, there is a one-time permanent reduction in your annuity. Since that reduction will be made before you receive annuity payments, you will be taxed only on the amount you receive. Note: A portion of your annuity will be tax-free, since it represents a return of the post-tax contributions you made to the retirement system. See IRS Publication 721 at www.irs.gov/pub/irs-pdf/p721.pdf.
Browsing: taxes
Q. My wife and I are retired. My wife has both a small civil service pension and Social Security. I had 30-plus years of Social Security earnings when I retired in 1998. If I survive my wife, will the reduced amount I would receive from her government pension affect my Social Security payment? I am asking about Government Offset Pension rules. A. The government pension offset applies only to the spousal Social Security benefit of someone receiving an annuity from a retirement system where he or she didn’t pay Social Security taxes, such as CSRS. It doesn’t apply to the earned Social Security benefit of…
Q. I was looking at what states are best for retiring when it comes to tax rates. I’ve read that North Carolina doesn’t tax annuities. That’s great for my TSP annuity, but is my Postal Service retirement considered an annuity? A. Civil service annuities in North Carolina aren’t taxed if you had five years of creditable government service as of Aug. 12, 1989. If you didn’t, they’re taxable.
Q. I am married, and I have retired from the Postal Service with 35 years of service under CSRS. I have 33 credits of Social Security. If I go back to work and earn seven more credits for SS, will I be able to collect SS when I reach my full retirement age of 66? And does my wife’s SS come into play anyway? A. If you earn 40 credits, you’ll be eligible for a Social Security benefit; however, because you are receiving an annuity from a retirement system where you didn’t pay Social Security taxes, that benefit will be…
Q. I have been a retired NSA employee since 2000 and have a CSRS annuity paid to me monthly. My husband, age 62, and is now collecting Social Security. I also have enough quarters of private-sector employment to permit me to collect Social Security. Am I eligible to collect spousal Social Security monthly? A. Because you are receiving an annuity from CSRS, a retirement system where you didn’t pay Social Security taxes, any Social Security spousal benefit to which you are entitled will be affected by the government pension offset provision of law. The GPO will reduce that benefit by $2 for…
Q. I retired with FERS law enforcement benefits, am 59 and have maintained continuous federal health care coverage from day one under either me or my wife. My spouse will take an unreduced CSRS annuity with a survivor benefit from the Postal Service next year at age 55. We took family coverage under her when we had children, now ages 19 and 14. Her premium rates as an active postal employee were lower than my options active or retired. When she retires and her premiums rise to my level, we would like to make me the policyholder. As retired law…
Q. I will be retiring next week from federal law enforcement. I live and work in the San Francisco area. I was initially provided with a calculation based on an average high-3 salary of $145,250 and was told I would receive a net of $6,050 per month. However, when I visited Employee Express this morning, I saw that the agency is now listing my high-3 average as $116,000 and my expected net monthly annuity payment would be around $5,000. I pulled my W-2s for the past three years and confirmed that my top average 3-year salary is $145,250. I’m awaiting…
Q. Can the windfall elimination provision completely wipe out earned Social Security? If that is the case, is there a legal way to avoid paying Social Security taxes when I retire and work outside of the government with the realization that I will never be able to recoup what I’ve already paid into the system along with future payments. I worked many secondary jobs when I first started in the government and receive the usual notices from Social Security telling me that I am eligible based on that, but my limited understanding of WEP leads me to believe that I…
Q. My dad retired from working as janitor at the post office. Recently, we have discovered he has not been paying any insurance. He has been diagnosed with Alzheimer’s. Is there a retiree life insurance policy? A. You’ll have to call the Office of Personnel Management’s Retirement Information Office at 1-888-767-6738 to find out what coverage your father took into retirement. You’ll need to provide the specialist with his full name, date of birth, Social Security number and CSA number. You’ll find the latter on any copy of the 1099-R form he used to file his federal income tax.
Q. I am 61 years old. I have 38 years and eight months in CSRS. I worked for the Department of the Air Force, Department of the Navy and Postal Service. I have 28 quarters of Social Security. I plan to retire no later than Dec. 3. I get updates on my annuity for CSRS. I have no updates on my Social Security. Will I be able to receive a Social Security check at a reduced amount because I only have 28 quarters? Or will I have to get my 40 quarters and then have it reduced? A. You aren’t…