Q. Block 19 tells me what I have contributed to the retirement fund, but what happens to that money? How can I factor it into my retirement, or don’t I?
A. Both CSRS and FERS are defined benefit systems. They are based on formulas that let you know in advance what your annuity will be when you retire. When you retire, you’ll first receive the money you contributed to the retirement system. After that money is gone, you’ll begin receiving the government’s money. Unfortunately, because of a change in the tax code, only a portion of your contributions will be tax deductible. For more information about how federal annuities are taxed, go to www.irs.gov/pub/irs-pdf/p721.pdf.