Special retirement supplement and taxes


Q. I plan to retire at age minimum retirement age of 56, with 34 years of service and received an estimate of FERS annuity plus special retirement supplement. The estimate only shows deductions for federal tax and maximum survivor benefit election from the base FERS annuity but no deductions from the special retirement supplement. Can you verify that the special retirement supplement is not federally taxed?

A. No, I can’t, because it is taxable as ordinary income. The special retirement supplement is paid out of the Civil Service Retirement and Disability Fund, not by the Social Security Administration.


About Author

Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to fedexperts@federaltimes.com.

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