Pension and working in retirement question

[dave123]

I'm retired Federal Law Enforcement and receiving a pension. I know that I start losing money from my pension if I make over a certain amount each year. I don't want to go over the allowable limit before I start losing money off my pension.

Retirement Annuity Supplement (RAS) that will take the hit if you make over a certain amount. You lose $1 of RAS for every $2 you receive in earned income depending on the earnings test.

I've been unable to find the amount allowable for 2023.

Any help appreciated.

dave

 

[sean101]

Are you over age 57? Maybe you already know, but the earnings test doesn't kick in until you hit your MRA (minimum retirement age). MRA is between 55 and 57. /https://plan-your-federal-retirement.com/fers-mra

no idea what the limit is for '23, but if 19560 was the '22 limit, i would guess 21000 for this year.

 

[tsptalk]

For 2023, the Social Security earnings limit is $21,240.

https://www.socialsecurityintelligence.com/social-security-income-limits/

 

[Boghie]

I don't think you have an earnings test on your 'pension'.

The earnings test will be on your 'Annuity Supplement'. The 'Annuity Supplement' is intended to carry you through to the minimum Social Security retirement age - which is 62. Basically, it is a Social Security benefit equivalent since some fields (yours for example) have a forced retirement that is earlier than ages 62. So, the 'Annuity Supplement' is treated as a Social Security benefit.

Be aware that the supplement will go to 0 at age 62 even if you elect to delay Social Security benefits. That is why I am being kinda picky here. Zero is kinda worse than losing a buck for every two bucks earned and you should be aware of it.

 

[Boghie]

BTW, the clawback is only for the 'Annuity Supplement'.

It is a $1 cut in the supplement for every $2 earned - and I think it is only for earnings over the $21K earnings limit Tom posted about. So, the actual pension portion is not touched. There is a good example at the bottom of the page in the link to the Social Security site posted by Tom.

 

[dave123]

Thanx for the replies. I am 59 years old.

I was talking about the supplement, sorry.

I sure hope that Sean101 is wrong about 2022, I was told it was 19,800, and i got within 100.00.

So, still hoping someone knows what 2023 will be...

 

[tsptalk]

So, still hoping someone knows what 2023 will be...

I thought this was the amount? At least that what it is for SS, which I assume is the same?

For 2023, the Social Security earnings limit is $21,240.

https://www.socialsecurityintelligence.com/social-security-income-limits/

 

[Skorcher]

I thought this was the amount? At least that what it is for SS, which I assume is the same?

They're both the same amount. The FERS Supplement is treated like a pseudo SS benefit that ends when you turn 62. Therefore you're penalized the same way if you earn more than $21,240 in 2023.

 

[FireWeatherMet]

I'm retired Federal Law Enforcement and receiving a pension. I know that I start losing money from my pension if I make over a certain amount each year. I don't want to go over the allowable limit before I start losing money off my pension.

Retirement Annuity Supplement (RAS) that will take the hit if you make over a certain amount. You lose $1 of RAS for every $2 you receive in earned income depending on the earnings test.

I've been unable to find the amount allowable for 2023.

Any help appreciated.

dave

Maybe I'm wrong, but I thought that rule only applied to Social Security, or (if younger than 62) your SS supplement.
I thought that your "True Pension" component was not affected???

 

[sean101]

sorry bud, but it looks like it was 19560 for 2022. https://www.govexec.com/pay-benefits/2022/10/some-retirement-just-means-different-kind-work/379006/

150 over isn't too bad. Better than $15,000 over.

congrats on your retirement.

 

[evilanne]

2023 is $21,240 for the FERS Supplement for normal employees. It may be different for LEOs

It is the same as SSA's Retirement Earnings Test Exempt Amounts
see https://www.ssa.gov/news/press/factsheets/colafacts2023.pdf

Info re: Supplement from OPM https://www.opm.gov/support/retirement/faq/fers-annuity-supplement-survey/

 

[poppa]

tsp withdrawals arent earned income, are they?

 

[Buffalo_Nickle]

Someone has to pay the tax if not already paid.

 

[sean101]

tsp withdrawals arent earned income, are they?

They're not EARNED income, but they are income.

 

[PessOptimist]

IRS considers them retirement income. You will get a form 1099R.