Q: I am 58 years old and a CSRS employee with 33 years of service. During the past 30 years I have paid and accumulated 14 years of “substantial” earning under to Social Security. If I am still working when I am 62, can I apply for Social Security benefits without the WEP decreasing my payments? Is it correct that WEP only takes effect once the individual retires from federal service?
A: While the windfall elimination provision doesn’t apply until you retire, if you apply for a Social Security benefit at age 62, you will be subject to the Social Security earnings limit, which will reduce your Social Security benefits by $1 for every $2 you receive in earnings from wages or self employment above the annual limit, which is $14,160 in 2010. In the year you reach your full retirement age (which in your case is 66) they’ll be reduced by $1 for every $3 above a different limit, which is $37,680 in 2010. There isn’t any limit beginning with the month in which you reach your full retirement age.