Q. I’m under FERS and worried about a reduction in my Social Security benefits after retirement. My Social Security benefits are not calculated on an assumption of $110,000 a year until I retire. If I elect to retire with 31 years of service at my minimum retirement age of 56, will the years following my retirement without paying (or paying Social Security at a lower income level) reduce my Social Security benefits when I claim them at 62 or older?
A. If you do nothing after you retire and are eligible for the special retirement supplement, it will continue to age 62, when you’ll be eligible for a regular Social Security benefit. That benefit will likely be higher than the SRS because of annual Social Security cost-of-living adjustments between the time you retired and your benefit begins.
What I can tell you about working after you retire is that you’ll be subject to the annual earnings limit until you reach your full Social Security retirement age. In 2013, that limit is $15,120. Anything you earn above that limit will reduce the SRS (and your Social Security benefit if you are 62 or older) by $2 for every $3 you earn above the limit.
While working for less money after you retire might increase your Social Security benefit, it might not. Since that benefit will be based on your average indexed monthly earnings), you’d have to use the Social Security Administration’s calculator to assess the impact. You can find it at www.ssa.gov.