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FERS Social Security supplement?
- Thread starter ripper
- Start date
If you have an HDHP and HSA, you can also contribute an additional $5650 plus $800 catchup.
Thanks for all the feedback, folks. That's what makes this a great website.
I'd just like to clarify a couple of things regarding my situation:
1. I plan on retiring at age 59 with 30 years of service. I've held a part-time (non-gov) job the last 10 years that pays about $15k/yr. My understanding now is that my ss earnings from my part-time job will not be included in the calculation of my supplement. Is that correct?
2. Also regarding my p/t job: I plan on continuing to work at that position after my retirement from the Fed...possibly increasing my hours there. But my understanding now is that I will be penalized on earnings over $12k/yr. Could someone clarify this for me?
3. Finally...about 25% of my annual income from the gov comes from overtime. Will my OT be figured into my supplement? I ask this because OT is generally disregarded in other Fed retirement calculations.
I'd just like to clarify a couple of things regarding my situation:
1. I plan on retiring at age 59 with 30 years of service. I've held a part-time (non-gov) job the last 10 years that pays about $15k/yr. My understanding now is that my ss earnings from my part-time job will not be included in the calculation of my supplement. Is that correct?
2. Also regarding my p/t job: I plan on continuing to work at that position after my retirement from the Fed...possibly increasing my hours there. But my understanding now is that I will be penalized on earnings over $12k/yr. Could someone clarify this for me?
3. Finally...about 25% of my annual income from the gov comes from overtime. Will my OT be figured into my supplement? I ask this because OT is generally disregarded in other Fed retirement calculations.
( question 1) yes (question 2)yes you will penalized(question3)whatever is taken out of your paycheck for ss is included in your calculation for your supplement---that is my understanding(what ever you made or should i say what ever they deducted out of your paycheck while you work for the goverment.
Okay, I'm retiring next month on FERS. According to our retirement folks, I will get my FERS annuity plus the special supplement. The supplement is calculated by my number of years under FERS (21) divided by 40 times my expected SS benefits. Or, for me it is 21/40 x $1380.
There is a earnings limitation to keeping this supplement. It's the same as the social security earnings limitation for the year.
There is a earnings limitation to keeping this supplement. It's the same as the social security earnings limitation for the year.
Texarkandy
Member
Hi Clester - I'm in the same boat as you 49 y/o with 25 years FERS
(We need a separate forum group for us LE/ATC/FF folks)
Yes, you are correct on the SRS from what I have learned:
25 years gets you 62% of your projected age 62 SS benefit- No Cola on the SRS - Earnings Limitation doesn't kick in till age 56 -The SRS ends at 62 & you can go on Social Security then, or wait a few years without either for a higher S/S benefit.
It's my understanding the Supplement only counts your civilian time, not the military time you bought back. When you start collecting your regular Social Security then your military time is calculated in.
Hey There,
New to this Forum, as you all can tell, but NOT to how FERS is so inferior to CSRS.
If I hear ONE MORE CSRS Employee/Retiree gripe about "reduced SS Benefit" because of the double-dipping provision, I'm gonna go POSTAL! (I am a nearly retired USPS Employee after 31 years FERS with 6 military)
The following is a comparison of CSRS/FERS, IF I UNDERSTAND it correctly. I only get a sour taste in my mouth when a CSRS employee whines. I guess I am doing this as much to see it for myself and to be open for any corrections I may need in my thinking in regards to this. And "going POSTAL" is merely a figure of speech for me, since I've BEEN Postal for a lot of years.
CSRS retirees get CSRS at 2% of the years they served, PLUS they get Social Security if they have the number of necessary SS quarters! Example: 30 years CSRS (60%) x Base pay (Ex:$50000)=$30000/12=$2500/mo
SSA Benefit (Ex: $800/mo based on Pre-FERS employment qualifying quarters) / 2 = $400/mo
For a total of $2900/mo
FERS gets 1% for the same years they served, PLUS a severely reduced SS Supplement!
Example: 30 years FERS (30%) x Base Pay (Ex: $50000)=$15000/12=$1250/mo
SS-Sup: ((Ex:30 yrs FERS-6 military= 24) / 40=0.6) x SSA benefit at 62 (Ex:$1500/mo)= $900/mo
For the fine total of $2150/mo.
Granted, TSP matching would have allowed me to get more per month to go along with this, but CSRS employees/retirees didn't have to contribute the 5% from their families' tables to get it!
Just my two cents.
Regardless, I am looking FORWARD to a GREAT retirement MANY people out there won't get a CHANCE to have!!!
FERS, messed up but still great!!!
I read somewhere that the SS-Sup is further reduced by the number of years from retirement til you actually reach 62yo. Is there any truth to this?
For example: the original FERS Service years above was calculated as 30-6=24, divided by 40 = 0.6 to use in calculating the SS-Sup of $900/mo. If what I read is true, and I haven't seen it discussed here, and the person in the example had five (5) years until 62, it would calculate out to be 30 - 6 - 5 = 19 / 40 = 0.475, then 0.475 x 1500 = $712.5/mo would be the result instead of the $900.
Is there any truth to this at all? It IS possible that I mis-understood what I read!
New to this Forum, as you all can tell, but NOT to how FERS is so inferior to CSRS.
If I hear ONE MORE CSRS Employee/Retiree gripe about "reduced SS Benefit" because of the double-dipping provision, I'm gonna go POSTAL! (I am a nearly retired USPS Employee after 31 years FERS with 6 military)
The following is a comparison of CSRS/FERS, IF I UNDERSTAND it correctly. I only get a sour taste in my mouth when a CSRS employee whines. I guess I am doing this as much to see it for myself and to be open for any corrections I may need in my thinking in regards to this. And "going POSTAL" is merely a figure of speech for me, since I've BEEN Postal for a lot of years.
CSRS retirees get CSRS at 2% of the years they served, PLUS they get Social Security if they have the number of necessary SS quarters! Example: 30 years CSRS (60%) x Base pay (Ex:$50000)=$30000/12=$2500/mo
SSA Benefit (Ex: $800/mo based on Pre-FERS employment qualifying quarters) / 2 = $400/mo
For a total of $2900/mo
FERS gets 1% for the same years they served, PLUS a severely reduced SS Supplement!
Example: 30 years FERS (30%) x Base Pay (Ex: $50000)=$15000/12=$1250/mo
SS-Sup: ((Ex:30 yrs FERS-6 military= 24) / 40=0.6) x SSA benefit at 62 (Ex:$1500/mo)= $900/mo
For the fine total of $2150/mo.
Granted, TSP matching would have allowed me to get more per month to go along with this, but CSRS employees/retirees didn't have to contribute the 5% from their families' tables to get it!
Just my two cents.
Regardless, I am looking FORWARD to a GREAT retirement MANY people out there won't get a CHANCE to have!!!
FERS, messed up but still great!!!
I read somewhere that the SS-Sup is further reduced by the number of years from retirement til you actually reach 62yo. Is there any truth to this?
For example: the original FERS Service years above was calculated as 30-6=24, divided by 40 = 0.6 to use in calculating the SS-Sup of $900/mo. If what I read is true, and I haven't seen it discussed here, and the person in the example had five (5) years until 62, it would calculate out to be 30 - 6 - 5 = 19 / 40 = 0.475, then 0.475 x 1500 = $712.5/mo would be the result instead of the $900.
Is there any truth to this at all? It IS possible that I mis-understood what I read!
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Boghie
Well-known member
Rodge8713,
In your example all you need is a total contribution of $3,700/year (flat, no increase for inflation) to match the CSRS benefit with FERS and TSP. Because of the match and the tax advantages of a 401(k) the total out of pocket will be $1,461/year. That maps out to an after-tax contribution of $56 per pay period.
That is all it will take for a 35 year old, 30 years of investing, an 8% return (easy), and 3% inflation to create enough money to match the CSRS benefit.
Now, if you invest more than 3.7% of your gross salary you will do far better than CSRS. For example, a 5% contribution (never increasing and your pay never increasing but with 3% inflation) would give you an additional $9,000/year to spend. So, no, I don't think having a pension that can be jiggered by future politicians is a better solution than one in my lock box. My TSP portion of my retirement will dwarf my FERS pension and my Social Security.
In your example all you need is a total contribution of $3,700/year (flat, no increase for inflation) to match the CSRS benefit with FERS and TSP. Because of the match and the tax advantages of a 401(k) the total out of pocket will be $1,461/year. That maps out to an after-tax contribution of $56 per pay period.
That is all it will take for a 35 year old, 30 years of investing, an 8% return (easy), and 3% inflation to create enough money to match the CSRS benefit.
Now, if you invest more than 3.7% of your gross salary you will do far better than CSRS. For example, a 5% contribution (never increasing and your pay never increasing but with 3% inflation) would give you an additional $9,000/year to spend. So, no, I don't think having a pension that can be jiggered by future politicians is a better solution than one in my lock box. My TSP portion of my retirement will dwarf my FERS pension and my Social Security.
nnuut
Moderator | TSP Legend
Welcome to the Message Board Rodge8713. We are here to maximize our TSP and hopefully live better after retirement. Your US government changed to the FERS to save money and put more folks on the Social Security rolls because it was and is going broke because our government spends it every year and doesn't pay the loans it makes back to the fund. Don't blame the CSRS folks, blame your elected politicians.
We in and retired that are CSRS don't get the 5% matching contributions to the TSP, my 18 years of paying Social Security should have given me about $775 a month but after a 60% reduction I only get $325 now $110 Medicare comes out of that. When I signed on to work civil service part of the deal was that if you qualified for SSA you could draw it and CSRS retirement with no reduction, they broke the contract and didn't give a damn what we thought about it. When I started working for the government in Jan 1977 Big Business like GM Ford, GE etc were giving their employees much better retirement benefits than Civil Service, then the economy started falling and those benefits left with all of our manufacturing base after NAFTA and later GATT treatys were passed due the inability of our government to add and subtract. So then came FERS what a deal, YOU WILL BECOME A MILLIONAIRE. They tried to get us to switch to FERS but the ones of us that could do arithmetic didn't fall for it. Over my 37.5 year career I donated a little more than $130,000 to the retirement fund, how much do FERS contribute? Figure that amount invested for that time period and how much would it be?
Take it easy on us old CSRS folks we didn't cheat or lie we just did our jobs.
Oh, we have a bunch of postal workers here, great people, but where do you get off paying so little for your FEHB plans, what a deal, do you know you will have to pay full price after retirement?
By the way at 30 years it's 56.25% not 60% for CSRS
Best of luck with your TSP, if I can help you with anything just ask.
Norman
We in and retired that are CSRS don't get the 5% matching contributions to the TSP, my 18 years of paying Social Security should have given me about $775 a month but after a 60% reduction I only get $325 now $110 Medicare comes out of that. When I signed on to work civil service part of the deal was that if you qualified for SSA you could draw it and CSRS retirement with no reduction, they broke the contract and didn't give a damn what we thought about it. When I started working for the government in Jan 1977 Big Business like GM Ford, GE etc were giving their employees much better retirement benefits than Civil Service, then the economy started falling and those benefits left with all of our manufacturing base after NAFTA and later GATT treatys were passed due the inability of our government to add and subtract. So then came FERS what a deal, YOU WILL BECOME A MILLIONAIRE. They tried to get us to switch to FERS but the ones of us that could do arithmetic didn't fall for it. Over my 37.5 year career I donated a little more than $130,000 to the retirement fund, how much do FERS contribute? Figure that amount invested for that time period and how much would it be?
Take it easy on us old CSRS folks we didn't cheat or lie we just did our jobs.
Oh, we have a bunch of postal workers here, great people, but where do you get off paying so little for your FEHB plans, what a deal, do you know you will have to pay full price after retirement?
By the way at 30 years it's 56.25% not 60% for CSRS
Best of luck with your TSP, if I can help you with anything just ask.
Norman
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driz
Member
Welcome to the Message Board Rodge8713. We are here to maximize our TSP and hopefully live better after retirement. Your US government changed to the FERS to save money and put more folks on the Social Security rolls because it was and is going broke because our government spends it every year and doesn't pay the loans it makes back to the fund. Don't blame the CSRS folks, blame your elected politicians.
We in and retired that are CSRS don't get the 5% matching contributions to the TSP, my 18 years of paying Social Security should have given me about $775 a month but after a 60% reduction I only get $325 now $110 Medicare comes out of that. When I signed on to work civil service part of the deal was that if you qualified for SSA you could draw it and CSRS retirement with no reduction, they broke the contract and didn't give a damn what we thought about it. When I started working for the government in Jan 1977 Big Business like GM Ford, GE etc were giving their employees much better retirement benefits than Civil Service, then the economy started falling and those benefits left with all of our manufacturing base after NAFTA and later GATT treatys were passed due the inability of our government to add and subtract. So then came FERS what a deal, YOU WILL BECOME A MILLIONAIRE. They tried to get us to switch to FERS but the ones of us that could do arithmetic didn't fall for it. Over my 37.5 year career I donated a little more than $130,000 to the retirement fund, how much do FERS contribute? Figure that amount invested for that time period and how much would it be?
Take it easy on us old CSRS folks we didn't cheat or lie we just did our jobs.
Oh, we have a bunch of postal workers here, great people, but where do you get off paying so little for your FEHB plans, what a deal, do you know you will have to pay full price after retirement?
By the way at 30 years it's 56.25% not 60% for CSRS
Best of luck with your TSP, if I can help you with anything just ask.
Norman
You summed it up pretty well nnut . One other thing about making that decision back then was an almost absolute lack if comparative information. I'm sure it was out there somewhere but if you didn't have a top notch or as many of us a real personnel office staffed by someone who really knew what they were doing the decision was almost impossible to calculate. Of course you could call OPM like I did and sit on hold for 20 + minutes then get nothing but gibberish from someone with less on the ball upstairs than my cat. At least today you have the online options to find out much of what is going on.
One thing rings true today as much as it did then though. "If you have something and these talking heads want you to switch to something else for a better deal you are almost surely better off staying put"
. That's about the long and short of it really and you can trust those clowns about as far as you can toss them. Essentially you are on your own so stash as much cash on your own as you can possibly manage; then stash a bit more and manage it wisely.
nnuut
Moderator | TSP Legend
I was a second level supervisor at that time, and was given the responsibility to convince my folks to switch to FERS. I had to present FERS in a positive way , which I did, but after the talking points I gave everyone my opinion on the subject and told them the truth as I saw it. I re-figured it at least a 100 times and thought it was a really bad idea to switch unless you had about 30 years to build your TSP. If you donate the max you could do really well, but I had no idea that in 2008 we were going to fall through our A** and interest rates on savings and 401Ks would fall to record levels, that hasn't changed. Contribute as much as you can, while you can.You summed it up pretty well nnut . One other thing about making that decision back then was an almost absolute lack if comparative information. I'm sure it was out there somewhere but if you didn't have a top notch or as many of us a real personnel office staffed by someone who really knew what they were doing the decision was almost impossible to calculate. Of course you could call OPM like I did and sit on hold for 20 + minutes then get nothing but gibberish from someone with less on the ball upstairs than my cat. At least today you have the online options to find out much of what is going on.
One thing rings true today as much as it did then though. "If you have something and these talking heads want you to switch to something else for a better deal you are almost surely better off staying put"
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"If you have something and these talking heads want you to switch to something else for a better deal you are almost surely better off staying put"
Not just government benefits, my brother works for a large pharma co and they changed their pension/stock option plan and offered them the "opportunity" to go with the new plan or stay with the current plan. I asked him a few questions, including -why would they change to a new plan? The only rational answer is they believe it will cost the company less. Ergo, the employee gets less. Simple! He stuck with their current plan and is verry happy he did. When someone offers you a gift always look at the transaction from their perspective and look at what they have to gain.
Frixxxx
Moderator
Remember that the way Civil Service Employment is "considered" you graduate college at 22. You work 40 years until you are 62. So, if you are not 62 when you retire, there are reductions in your SS Supplement. Read on the OPM website the conditions of your retirement and the calculations. I believe you did the math correctly though.
clester
Well-known member
You take your years of fers service and divide by 40. That is the factor to multiply by your age 62 amount from your SS statement. That amount is fixed(no cola) until you turn 62 and are on the real SS.
I am receiving the payments now. I have 10 more years til I get a cola.
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