Q: Can you give information on employees in the CSRS offset retirement situation? How does it work? I am in that category with 32 years of service and planning retirement in 2 years. I am a bit confused as to how it works still! Do I receive additional compensation from SS at the time I reach eligibility? I am a GS 8 step 10 and have been for 3 years. Of course with the pay freeze I am living on the same money.
A: If you retire before the age of 62, you will receive a regular CSRS pension until you reach 62. At age 62, your CSRS pension will be reduced (offset) by a percentage of your Social Security benefit. The percentage of reduction is determined (in almost all cases) by dividing the number of years of CSRS Offset service by 40. If you retire at the age of 62 or older, the reduction happens immediately.
Here’s an example.
- You retire at age 58 with 30 years of total service, 20 of them being under CSRS Offset.
- Your CSRS pension is $30,000. You will collect that amount until you reach age 62.
- At age 62, you are entitled to $10,000 per year in Social Security. One-half of that amount (20 years of CSRS Offset service divided by 40), or $5,000, will be deducted from your CSRS pension, leaving you with a CSRS pension of $25,000.
- You will (assuming you apply for your Social Security at age 62) collect the full $10,000 from Social Security, giving you a total of $35,000.
If your agency offers pre-retirement seminars, it would be a great idea for you to attend one. Instructors are generally quite knowledgeable and can thoroughly explain issues like CSRS Offset.
John Grobe’s latest book, The Answer Book on Your Federal Employee Benefits, has just been released by LRP Publications. The book is written in an easy to understand question and answer format and covers all areas of federal benefits from the perspective of an employee at various stages of their career. Order your copy at shoplrp.com.