Social Security Retirement for Federal Employees – What Are Your Benefits?

- Monthly benefits if you are retired and have reached at least age 62, and monthly benefits during your retirement for your spouse and dependents if they are eligible;
- Monthly benefits if you become totally disabled for gainful employment and benefits for your spouse and dependents if they are eligible during your disability;
- Monthly benefits for your eligible survivors; and
- A lump sum benefit upon your death.
- Average earnings upon which you have paid Social Security taxes, which are adjusted over the years for changes in average earnings of the American work force;
- Family composition (for example, whether you have a spouse or dependent child who may be eligible for benefits); and
- Consumer Price Index (CPI) changes that occur after you become entitled to benefits.
- After the Minimum Retirement Age (MRA) with 30 years of service;
- At age 60 with 20 years of service; or
- Upon involuntary or early voluntary retirement (age 50 with 20 years of service, or at any age with 25 years of service) after the U.S. Office of Personnel Management determines that your agency is undergoing a major reorganization, reduction-in-force (RIF) or transfer of function. You will not receive the Special Retirement Supplement until you reach your MRA.
Retirees who worked 40 quarters, 10 years, under social security are eligible for social security retirement benefits as early as age 62, but benefits are permanently reduced for each month of entitlement prior to the full-benefit retirement age, currently age 65. The age at which unreduced benefits are payable will be increased gradually from age 65 to 67 over a 21-year period beginning with individuals who reach age 62 in the year 2000. (The age of eligibility for Medicare is not affected by these changes.)
Federal CSRS retirees are subject to the Windfall Elimination Provision (WEP) that reduces Social Security benefits for those with less than 30 years of substantial coverage and who earned a retirement benefit from employment not covered by Social Security – your CSRS service for example. If you are subject to WEP, your earned Social Security benefits will be calculated using a modified formula. The modified formula IS NOT used in computing survivor benefits upon your death. Generally speaking, a CSRS retiree’s social security will be reduced. The current maximum reduction is approximately $413.
CSRS retirees with active military time that are eligible to collect Social Security at age 62, will see their CSRS annuity decrease unless you buy back your military time. If you served 4 years military service and didn’t buy back your military time, your federal CSRS annuity will decrease by approximately 8%., 2% for each year of military service. If you pay your military time back your annuity will not decrease and you will also collect a Social Security check.
Earnings must be reported by April 15 of each year and failure to report expected earnings may result in an overpayment.
This is in addition to Federal income tax returns. Earnings which exceed the limits above are considered excess earnings. If under full retirement age and earning more than the limit, $1 of benefits will be lost for each $2 of earnings over the limit. In the year you reach full retirement age and earning more than the limit, $1 of benefits will be lost for each $3 of earnings over the limit. Social Security recovers overpayments of benefits by reducing benefits payable to the worker in future months until the debt is repaid.
Wages received as an employee and net earnings from self-employment, bonuses, commissions, fees, vacation pay, cash tips of $20 or more a month, severance pay, and earnings from all types of work, including work not covered by Social Security count for the earnings test.
This is only a factor for earned income, income from investments and rental property are not included and will not impact your Social Security payments at any age.
The Bottom Line You need to know what you’re going to get from Social Security in order to understand your total retirement income, especially if you’re enrolled in FERS. Other Aspects of Social Security Benefits There are some other nuances you need to know exist in order to best understand what you’re entitled to. These include the Windfall Elimination Provision and the Government Pension Offset. Windfall Elimination Provision What is the Windfall Elimination Provision? Some federal employees may be eligible for pensions that are based on earnings not covered by Social Security. If you worked in a job where you didn’t pay Social Security taxes, the Windfall Elimination Provision affects the calculation of your social security income or disability benefits. Any pension you get from that job may reduce your Social Security benefits. Your Social Security benefits are only intended to replace a percentage of your pre-retirement income. So if you’re already receiving a pension from your job, and you also worked in other jobs long enough to qualify for a Social Security retirement or disability benefit, the idea of WEP is to remove an advantage, in a sense, of receiving double benefits. The formula used is modified to pay out a lower Social Security benefit. WEP may apply to you if you turned 62 years old as of 1985, you have become disabled after 1985 or if you first became eligible for a monthly federal pension based on work where you did not pay Social Security taxes after 1985, even if you are still working. There are several other provisions for qualifying for WEP. We can walk you through these facets of WEP, as well as navigate some other options. Government Pension Offset What is it? Your spouse’s, widow’s or widower’s benefits through Social Security may be offset by two-thirds if you have a government pension where you did not pay Social Security taxes. Keep in mind, your own Social Security benefits will not be reduced, only the benefits that come from a spouse’s employment. Before the Government Pension Offset was enacted, the SSA would have to pay out full Social Security benefits to a spouse even if that spouse earned their own monthly Social Security retirement benefit. Now with this provision, when it comes to determining the spouse’s benefits, workers who do not pay Social Security taxes are essentially treated in a similar manner to those who work in the private sector and pay Social Security taxes. There are a handful of provisions in which your spouse’s benefits will not be reduced, including if your spouse is receiving a government pension not based on their earnings. More about these exceptions can be found at the SSA’s fact sheet on Government Pension Offset. You can also contact one of our benefits specialists to learn more about your Social Security benefits.