Q. I am so confused about the deposit for post-1956 military service. I am a widow 53 years old who has been receiving a survivors annuity (CSRS) since my husband’s death in 2006. At the time the annuity was approved, I received a letter from OPM asking me if I wanted to make the deposit and was told that my annuity would be reduced by an estimated $193 monthly at age 60 if I did not make the deposit, and I was found eligible for Social Security benefits. I did not reply as I was totally confused and could not get any answers. I recently sent a letter to the OPM post-56 unit asking if it was too late to make the deposit and how much it would be. I received their response today and have 30 days from the date of the August 4 letter to pay the deposit of $3,988.15. I also realized per their letter that the age is 62 now and not 60 for the annuity reduction. My husband worked part-time jobs over many years in addition to his federal employment and I have worked part-time, so I know I will be eligible for some type of Social Security payment at 62. I don’t want to throw $4,000 away today if at 62 I will be no better off. If I am understanding my research correctly, one of two things will happen when I reach 62, both with the same effect. If I pay the deposit, I will receive the same annuity amount at 62 without reduction but my Social Security payment will be reduced. And if I don’t pay the deposit, my annuity will be reduced but I will receive a higher Social Security payment? In either case it should equal out, and I should receive about the same combined amount at 62 but no more. Am I correct? So why should I pay the $4,000 if it doesn’t mean more money for me at age 62? What is the benefit of my paying this deposit?
A. If you pay the deposit, you will continue to receive that unreduced annuity. If you don’t, the annuity will be reduced, as OPM has pointed out. Making that deposit will have no affect on any Social Security benefit you are entitled to based on your own work record or a survivor benefit based on your late husband’s work record. You would be eligible for a reduced survivor Social Security benefit at age 60 and your own Social Security benefit at age 62. In either case, if you delayed receiving them, the reduction would gradually decrease until age 66 and 10 months when you’d be eligible for full benefits. The decision on when to apply for those benefits is up to you