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FERS Social Security supplement?
- Thread starter ripper
- Start date
FERS Annuity Supplement
The formula for calculating your FERS Annuity Supplement is:
(Number of calendar years of FERS service/40) times what you receive from social security at the age of 62---you can only use the social security earnings that you earn while working for the gov. not any outside company that has no ties to the gov. for example you can't use social security earnings that you had from say burger king when you work there at the age of 16 yrs old
The formula for calculating your FERS Annuity Supplement is:
(Number of calendar years of FERS service/40) times what you receive from social security at the age of 62---you can only use the social security earnings that you earn while working for the gov. not any outside company that has no ties to the gov. for example you can't use social security earnings that you had from say burger king when you work there at the age of 16 yrs old
Last edited:
hessian
Member
The Annuity Supplement under FERS, is only "offered" if you ar under a RIF, SEP, or Voluntary Early Retirement Arrangement (with your employer)!!!
Not very likely to get these anymore -at least where I work, (given so many folks are coming to retirement age/eligible, (now without above "special conditions" being necessary).
It is meant as a supplement - in other words its meant to fill gap between your MRA, or a date after this, up to, and only until you become SS eligible! -Then the Supplement ends.
But like I said, you need "special arrangements," the old buddy system basically, to get this "arranged" for you. The amount is supposed to be very similar, if not the same, as what you'd get with SS (assumes age 62) - but again this will depend on your being under the "special conditions" above - AND, being made an "offer" for the Annuity Supplement. IMO, you'd best know someone high-up to get this -but I suppose that we can hope!
budnipper1
Active member
hessian
Member
Budnippper,
That's good, I shoulda thought to post actual forms.
Problem is, when you dig deeper, you'll need to look into the word/phrase "eligible."
[Special Retirement Supplement - "An additional amt paid by OPM to retirees eligible for full retirement benefits to supplement the total retirement until SS...age 62"]
The key work is eligible - dig deeper you'll find these are the "special conditions" (RIF, SEP, VERA that I discussed. I got all this from 2 FERS retirement classes and hardcopy materials these provided. Eligibility is not automatic, or assumed!
- (You may well be correct, that if you are MRA+, and have 30 years in, that this alone makes you eligible (I never checked since this won't apply for me).
But otherwise (if youl have under 30 yrs), you may not be necessarily eligible - and it isn't necessarily offered. In this scenario, both, special conditions (above) must apply, AND, it has to be arranged by your employer to recieve it.
If you can get above lined up - you can get it under MRA+10, etc. regardles of what's printed below (under "Retirement Supplemental Provisions"). Personally, I'm going to try to see if I can make "arrangements", (I will go for retirement/and supplement with my 20 years, but its doubtful, again since so many are retirement eligible in next 5 years, RIFs, SEPs & VERAs, are not likely in my organization. :suspicious:
That's good, I shoulda thought to post actual forms.
Problem is, when you dig deeper, you'll need to look into the word/phrase "eligible."
[Special Retirement Supplement - "An additional amt paid by OPM to retirees eligible for full retirement benefits to supplement the total retirement until SS...age 62"]
The key work is eligible - dig deeper you'll find these are the "special conditions" (RIF, SEP, VERA that I discussed. I got all this from 2 FERS retirement classes and hardcopy materials these provided. Eligibility is not automatic, or assumed!
- (You may well be correct, that if you are MRA+, and have 30 years in, that this alone makes you eligible (I never checked since this won't apply for me).
But otherwise (if youl have under 30 yrs), you may not be necessarily eligible - and it isn't necessarily offered. In this scenario, both, special conditions (above) must apply, AND, it has to be arranged by your employer to recieve it.
If you can get above lined up - you can get it under MRA+10, etc. regardles of what's printed below (under "Retirement Supplemental Provisions"). Personally, I'm going to try to see if I can make "arrangements", (I will go for retirement/and supplement with my 20 years, but its doubtful, again since so many are retirement eligible in next 5 years, RIFs, SEPs & VERAs, are not likely in my organization. :suspicious:
Last edited:
clester
Well-known member
Supplement subject to earnings limitation - This is the one that will get me. Basically whatever your earn over about 12,000 after age 56 will reduce you supplement by .50 on the dollar. So, if you make 36,000 a year at another job you lose your supplement. But, your Social security will be higher at age 62. This is what I understand about it. I could be wrong. Anyone else have an opinion?
budnipper1
Active member
I do not claim to know how the Retirement Supplement applies to every individual's special situation. This is what I do know:
I am retiring on January 30, 2008, at age 60 with just over 24 years of federal service under FERS.
2-yrs, 9-months and 25-days of the 24 years are from military service, which will not be used to calculate the supplement.
That leaves just over 21 years which will be used to calculate the supplement.
They will divide 21 by 40 and multiply that factor times the amount I would be paid by Social Security at age 62.
I expect to receive about $700/mo from the date of my retirement until I start receiving regular social security payments after age 62.
If I worked and earned an income after retirement, the supplement would be reduced only during the second year, because it is based on the previous year's income. For me, this will not apply since I will not be working after retirement.
http://www.opm.gov/fers_election/html/srs.htm
http://www.govexec.com/dailyfed/0107/012607rp.htm
http://www.fedweek.com/search/view.php?table=rjones&id=130
[FONT=Arial, Helvetica, MS Sans Serif]The FERS Special Retirement Supplement
The special annuity supplement is a benefit paid to certain FERS employees who retire before age 62 and are entitled to an immediate annuity. The SRS approximates the Social Security benefit earned while covered by FERS, and is designed to bridge the gap between retirement and age 62, when a retiree first becomes eligible for Social Security.
You are eligible for an immediate annuity and the SRS if you retire:
I am retiring on January 30, 2008, at age 60 with just over 24 years of federal service under FERS.
2-yrs, 9-months and 25-days of the 24 years are from military service, which will not be used to calculate the supplement.
That leaves just over 21 years which will be used to calculate the supplement.
They will divide 21 by 40 and multiply that factor times the amount I would be paid by Social Security at age 62.
I expect to receive about $700/mo from the date of my retirement until I start receiving regular social security payments after age 62.
If I worked and earned an income after retirement, the supplement would be reduced only during the second year, because it is based on the previous year's income. For me, this will not apply since I will not be working after retirement.
http://www.opm.gov/fers_election/html/srs.htm
http://www.govexec.com/dailyfed/0107/012607rp.htm
http://www.fedweek.com/search/view.php?table=rjones&id=130
[FONT=Arial, Helvetica, MS Sans Serif]The FERS Special Retirement Supplement
The special annuity supplement is a benefit paid to certain FERS employees who retire before age 62 and are entitled to an immediate annuity. The SRS approximates the Social Security benefit earned while covered by FERS, and is designed to bridge the gap between retirement and age 62, when a retiree first becomes eligible for Social Security.
You are eligible for an immediate annuity and the SRS if you retire:
- at your minimum retirement age (MRA) with at least 30 years of service;
- at age 60 with at least 20 years of service;
- disability retirees;
- anyone retiring under the MRA+10 provision;
- anyone who is eligible only for a deferred annuity; and
- anyone retiring at age 62 or later.
Budnippper,
That's good, I shoulda thought to post actual forms.
Problem is, when you dig deeper, you'll need to look into the word/phrase "eligible."
[Special Retirement Supplement - "An additional amt paid by OPM to retirees eligible for full retirement benefits to supplement the total retirement until SS...age 62"]
The key work is eligible - dig deeper you'll find these are the "special conditions" (RIF, SEP, VERA that I discussed. I got all this from 2 FERS retirement classes and hardcopy materials these provided. Eligibility is not automatic, or assumed!
- (You may well be correct, that if you are MRA+, and have 30 years in, that this alone makes you eligible (I never checked since this won't apply for me).
But otherwise (if youl have under 30 yrs), you may not be necessarily eligible - and it isn't necessarily offered. In this scenario, both, special conditions (above) must apply, AND, it has to be arranged by your employer to recieve it.
If you can get above lined up - you can get it under MRA+10, etc. regardles of what's printed below (under "Retirement Supplemental Provisions"). Personally, I'm going to try to see if I can make "arrangements", (I will go for retirement/and supplement with my 20 years, but its doubtful, again since so many are retirement eligible in next 5 years, RIFs, SEPs & VERAs, are not likely in my organization. :suspicious:
hessian
Member
Budnipper you are right, I think, if you're 60.
I will fall into the next category down 56with 20 years - I think they make it confusing on purpose. Attachment wouldn't work-so I'm just trying to paste this in:
Deferred vs. Postponed,June 29, 2007
Deferred Retirement Defined
A deferred retirement is payable to an employee who left federal service with at least five years of creditable civilian service and before being eligible for immediate retirement. The former employee must not have applied for a refund of Civil Service Retirement System or Federal Employees Retirement System contributions.
According to the Office of Personnel Management, about 3,000 deferred applications are processed annually.
(Click here for the application for a deferred CSRS annuity.)
Under FERS, you are eligible for a deferred basic retirement benefit at age 62 if you have more than five and less than 10 years of creditable civilian service. If you have more than 10 years of service, you can apply for a reduced benefit at your FERS minimum retirement age (55 to 57, depending on your year of birth). If you have at least 20 years, you're eligible at age 60 for an unreduced benefit. With 30 or more years, you would receive an unreduced benefit at your minimum retirement age. (Click here for the application for a deferred FERS annuity, along with a publication providing detailed information.)
Postponed Retirement Defined
Postponed retirement is only available to employees under FERS. If you have at least 10 years of creditable service and already are at the minimum retirement age, you can get an immediate, but reduced, basic retirement benefit. These benefits are reduced by 5 percent for each year the individual is under age 62.
Employees may choose to postpone receiving this benefit in order to avoid some or all of the reduction. If the employee is eligible to maintain his or her federal health insurance and life insurance, these benefits will eligible for reinstatement upon receiving the postponed benefit. The application is the same as the application for a deferred FERS annuity.
TSP and Social Security
The terms "deferred" or "postponed" do not apply to Thrift Savings Plan benefits. Your contributions to the government's 401(k)-style investment plan are yours. If you have at least three years of creditable service, the entire TSP account belongs to you, including the agency automatic 1 percent matching contribution.
You can transfer your TSP funds to an Individual Retirement Account or keep the money in the TSP for future growth. If you leave before the year you turn 55, you may incur an early withdrawal penalty of 10 percent if you receive any of the money in your TSP account as a cash payment.
Remember, the money in TSP accounts has never been taxed, so any cash withdrawals will be subject to income tax in the year they are taken out. In most cases, employees can transfer the funds to their new employer's 401(k) plan without penalty or tax.
If you're in CSRS, you also should remember that since you have been exempt from paying Social Security taxes during your federal career, you may find that leaving government for the private sector will have an adverse effect on your future Social Security benefits. Social Security computes benefits on the highest 35 years of Social Security taxed wages. Having less than 35 years of Social Security covered wages will bring the average down by including years with no earnings.
Deferred CSRS Retirement: An Example
Suppose Georgia has 32 years of creditable service under CSRS. Her current salary is $80,000 and her high-three average salary is $76,000. If she resigns at age 52, she will be eligible for a deferred CSRS retirement benefit of $45,790 per year at age 62. CSRS benefits are paid for life with an annual cost of living adjustment.
The cost of this decision for Georgia is steep. If she waits until age 55 to retire, she will be entitled to an immediate retirement of about $50,350, based on 35 years of service. Receiving this benefit seven years longer would result in $352,450 more retirement income, not counting future cost of living adjustments or salary increases.
In addition, Georgia will not be entitled to reinstate her health insurance, life insurance or receive any credit for unused sick leave on her deferred retirement benefit. There would be no cost of living adjustments until after her benefit begins at age 62 and the high-three used in the computation is the same high-three as when she left at age 52.
If Georgia begins a second career in the private sector, she will have a 32-year "hole" in her Social Security record for the years she worked under CSRS where she was exempt from Social Security taxes. If she applies for a deferred CSRS retirement benefit, her Social Security benefit will be computed under a modified formula due to the Windfall Elimination Provision.
Deferred FERS Retirement: An Example
Suppose Bryan was born in 1955, has 25 years of service under FERS and is resigning at age 52. His salary is $80,000 and his high-three average is $76,000. He will be eligible for a deferred annuity at age 60 that will be worth 25 percent of $76,000, or $19,000 per year (payable for life with an annual cost of living adjustment). If he chooses to apply when he reaches his minimum retirement age (56, in his case) the benefit would be reduced by 30 percent (5 percent for each year under age 62).
Let's assume Bryan has $300,000 invested in his TSP. He can leave it there or transfer it to a new employer's 401(k) plan. He will continue to pay into Social Security at his next job. The cost of leaving federal service early for Bryan is the consideration that his next employer may not offer retiree health insurance or a defined benefit pension.
Postponed FERS Retirement: An Example
Suppose Anne has 25 years of service under FERS and is resigning at age 56. Her salary is $80,000 and her high-three average is $76,000. She is eligible for an immediate annuity worth 25 percent of $76,000, or $19,000 per year, but taking this benefit at age 56 would cause it to be reduced to $13,300. If she postpones receiving the benefit until age 60, she would receive the benefit unreduced at $19,000 per year (payable for life with an annual cost of living adjustment that begins at age 62). When she applies for the postponed benefit, she may elect to reinstate her health and life insurance benefits, as long as she was covered during the last five years of her federal service.
Anne may leave her TSP investments in the plan or begin an immediate withdrawal. There is no early withdrawal penalty if she is at least 55 the year she leaves federal service.
Things to Consider
Before deciding to leave your federal career early, consider the following:
· Since 1978, the number of defined-benefit plans plummeted from 128,041, covering 41 percent of private-sector workers, to only 26,000 today, according to the Employee Benefit Research Institute. The Bureau of Labor Statistics reports that just 21 percent of workers in the private sector have defined benefit pensions.
· Courtney Coile, an assistant professor of economics at Wellesley College and a research associate of the Center for Retirement Research at Boston College, says the number of companies with 200 or more workers that offer retiree health insurance fell from 66 percent in 1988 to 33 percent in 2005.
· If you leave federal service early, you may have to save more in your employer sponsored savings plan to make up for the fact that many employers do not offer a basic pension benefit. Did you know that if you want $200,000 to last 35 years, you can only withdraw $767 per month (assuming you get a 6 percent rate of return, and allowing for a 3 percent inflation adjustment). To compute your own scenario, try using this calculator.
Tammy Flanagan is the senior benefits director for the National Institute of Transition Planning Inc.,
I will fall into the next category down 56with 20 years - I think they make it confusing on purpose. Attachment wouldn't work-so I'm just trying to paste this in:
Deferred vs. Postponed,June 29, 2007
Deferred Retirement Defined
A deferred retirement is payable to an employee who left federal service with at least five years of creditable civilian service and before being eligible for immediate retirement. The former employee must not have applied for a refund of Civil Service Retirement System or Federal Employees Retirement System contributions.
According to the Office of Personnel Management, about 3,000 deferred applications are processed annually.
(Click here for the application for a deferred CSRS annuity.)
Under FERS, you are eligible for a deferred basic retirement benefit at age 62 if you have more than five and less than 10 years of creditable civilian service. If you have more than 10 years of service, you can apply for a reduced benefit at your FERS minimum retirement age (55 to 57, depending on your year of birth). If you have at least 20 years, you're eligible at age 60 for an unreduced benefit. With 30 or more years, you would receive an unreduced benefit at your minimum retirement age. (Click here for the application for a deferred FERS annuity, along with a publication providing detailed information.)
Postponed Retirement Defined
Postponed retirement is only available to employees under FERS. If you have at least 10 years of creditable service and already are at the minimum retirement age, you can get an immediate, but reduced, basic retirement benefit. These benefits are reduced by 5 percent for each year the individual is under age 62.
Employees may choose to postpone receiving this benefit in order to avoid some or all of the reduction. If the employee is eligible to maintain his or her federal health insurance and life insurance, these benefits will eligible for reinstatement upon receiving the postponed benefit. The application is the same as the application for a deferred FERS annuity.
TSP and Social Security
The terms "deferred" or "postponed" do not apply to Thrift Savings Plan benefits. Your contributions to the government's 401(k)-style investment plan are yours. If you have at least three years of creditable service, the entire TSP account belongs to you, including the agency automatic 1 percent matching contribution.
You can transfer your TSP funds to an Individual Retirement Account or keep the money in the TSP for future growth. If you leave before the year you turn 55, you may incur an early withdrawal penalty of 10 percent if you receive any of the money in your TSP account as a cash payment.
Remember, the money in TSP accounts has never been taxed, so any cash withdrawals will be subject to income tax in the year they are taken out. In most cases, employees can transfer the funds to their new employer's 401(k) plan without penalty or tax.
If you're in CSRS, you also should remember that since you have been exempt from paying Social Security taxes during your federal career, you may find that leaving government for the private sector will have an adverse effect on your future Social Security benefits. Social Security computes benefits on the highest 35 years of Social Security taxed wages. Having less than 35 years of Social Security covered wages will bring the average down by including years with no earnings.
Deferred CSRS Retirement: An Example
Suppose Georgia has 32 years of creditable service under CSRS. Her current salary is $80,000 and her high-three average salary is $76,000. If she resigns at age 52, she will be eligible for a deferred CSRS retirement benefit of $45,790 per year at age 62. CSRS benefits are paid for life with an annual cost of living adjustment.
The cost of this decision for Georgia is steep. If she waits until age 55 to retire, she will be entitled to an immediate retirement of about $50,350, based on 35 years of service. Receiving this benefit seven years longer would result in $352,450 more retirement income, not counting future cost of living adjustments or salary increases.
In addition, Georgia will not be entitled to reinstate her health insurance, life insurance or receive any credit for unused sick leave on her deferred retirement benefit. There would be no cost of living adjustments until after her benefit begins at age 62 and the high-three used in the computation is the same high-three as when she left at age 52.
If Georgia begins a second career in the private sector, she will have a 32-year "hole" in her Social Security record for the years she worked under CSRS where she was exempt from Social Security taxes. If she applies for a deferred CSRS retirement benefit, her Social Security benefit will be computed under a modified formula due to the Windfall Elimination Provision.
Deferred FERS Retirement: An Example
Suppose Bryan was born in 1955, has 25 years of service under FERS and is resigning at age 52. His salary is $80,000 and his high-three average is $76,000. He will be eligible for a deferred annuity at age 60 that will be worth 25 percent of $76,000, or $19,000 per year (payable for life with an annual cost of living adjustment). If he chooses to apply when he reaches his minimum retirement age (56, in his case) the benefit would be reduced by 30 percent (5 percent for each year under age 62).
Let's assume Bryan has $300,000 invested in his TSP. He can leave it there or transfer it to a new employer's 401(k) plan. He will continue to pay into Social Security at his next job. The cost of leaving federal service early for Bryan is the consideration that his next employer may not offer retiree health insurance or a defined benefit pension.
Postponed FERS Retirement: An Example
Suppose Anne has 25 years of service under FERS and is resigning at age 56. Her salary is $80,000 and her high-three average is $76,000. She is eligible for an immediate annuity worth 25 percent of $76,000, or $19,000 per year, but taking this benefit at age 56 would cause it to be reduced to $13,300. If she postpones receiving the benefit until age 60, she would receive the benefit unreduced at $19,000 per year (payable for life with an annual cost of living adjustment that begins at age 62). When she applies for the postponed benefit, she may elect to reinstate her health and life insurance benefits, as long as she was covered during the last five years of her federal service.
Anne may leave her TSP investments in the plan or begin an immediate withdrawal. There is no early withdrawal penalty if she is at least 55 the year she leaves federal service.
Things to Consider
Before deciding to leave your federal career early, consider the following:
· Since 1978, the number of defined-benefit plans plummeted from 128,041, covering 41 percent of private-sector workers, to only 26,000 today, according to the Employee Benefit Research Institute. The Bureau of Labor Statistics reports that just 21 percent of workers in the private sector have defined benefit pensions.
· Courtney Coile, an assistant professor of economics at Wellesley College and a research associate of the Center for Retirement Research at Boston College, says the number of companies with 200 or more workers that offer retiree health insurance fell from 66 percent in 1988 to 33 percent in 2005.
· If you leave federal service early, you may have to save more in your employer sponsored savings plan to make up for the fact that many employers do not offer a basic pension benefit. Did you know that if you want $200,000 to last 35 years, you can only withdraw $767 per month (assuming you get a 6 percent rate of return, and allowing for a 3 percent inflation adjustment). To compute your own scenario, try using this calculator.
Tammy Flanagan is the senior benefits director for the National Institute of Transition Planning Inc.,
Last edited:
clester
Well-known member
ATC (like me) is eligible for srs. I will be 49 with 25 years fers, so 25/40 times my age 62 social security amount is what I will get. When I turn 56 any earned income over 12,000 counts against me for the supplement (earnings limitation provision) until I reach age 62 and social security kicks in. I think?
Anyone know the rules for the earnings limitation?
Anyone know the rules for the earnings limitation?
don't forget you will not receive-----cost of living raise from the age of 56 til 62. me i don't care about the cost of living raise
Show-me
Well-known member
http://www.opm.gov/asd/hod/pdf/C051.pdf
Page 4 of the manual. The way I read it you are eligible if you meet the MRA and 30 criteria.
Page 4 of the manual. The way I read it you are eligible if you meet the MRA and 30 criteria.
Show-me
Well-known member
IRA cut off is at age 70 1/2 years of age. So I believe you can sink $6,000 in the Roth until then. As long as you are employed by the Government you can contribute up to the IRS maximum in TSP. Once you retire, TSP is no more because you have to be on the payroll to be eligible to contribute.
http://beginnersinvest.about.com/cs/iras/a/iracontribution.htm
http://beginnersinvest.about.com/cs/iras/a/iracontribution.htm
camper65
Member
By saying IRS max, does that include "Catch-up contribution? Do you know what that is for "08" ?
Opps!!! THANKS!!!
Show-me
Well-known member
Nope.
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