Q: My wife has been on disability retirement from the IRS for about 11 years. She was a FERS employee. She is also on Social Security retirement. I understand that when she reaches age 62 that her FERS (and, I assume Social Security) annuity will be recomputed. My question is will this likely result in an increase, a decrease or no change to her total (FERS and Social Security) income?
A: At age 62, her disability annuity will be converted to a regular annuity, using her high-3 on the day she retired, increased by any cost-of-living increases from then until age 62, and combining her actual years of service with the years she was on disability. Her Social Security benefit will be the one she is entitled to at age 62 based on her years of Social Security-covered employment and her average indexed monthly earnings (AIME).