Q. My human resources staff calculated my estimated Social Security FERS supplement, and it is considerably lower than my Social Security calculation (calculated to initiate at age 62). I am retiring at 56 with 34 years. The HR staff has stated that they do not have the formula but only enter the numbers in a program estimator. The FERS handbook says the FERS Social Security supplement approximates the Social Security annuity. The FERS Social Security supplement doesn’t seem like a very close approximation. The FERS Social Security supplement calculates out at approximately $11,000, and the Social Security annuity is approximately $17,000. If I delay initiating SS past the age of 62, does the FERS SS supplement continue during that time, or does it only apply between 56 and 62?
A. The actual method used to calculate your special retirement supplement is described in Chapter 51 of the Office of Personnel Management’s CSRS and FERS Handbook for Personnel and Payroll Offices. You can see how that’s done by going to www.opm.gov/retire/pubs/handbook/C051.pdf. However, you’ll soon realize that employees don’t have the information needed to get an answer. For that reason, OPM has a simple formula that will allow you to estimate what your SRS will be. Here it is:
Take the latest estimate of your Social Security benefit at age 62 provided by the Social Security Administration, multiply it by your years of FERS service rounded up to the next higher year, and divide the product by 40.
Because the Social Security estimate is based on the assumption that you will be working to age 62, there is bound to be a difference between that and what you’d receive at age 56. Also, you need to be aware that the Social Security estimate will include all Social Security-covered service, while your benefit will be based solely on your FERS-covered service.