Re: Beware of Social Security

A few comments.:
If you are FERS and in your fifties you are not collecting a $30000 pension on a $50000 salary. Your benefits under FERS at age 56 or 57 with 30 years in is 1% times years served. FERS also started in early to mid 80's so the theory is not accurate. The author probably means CERS.
to Accountant retired,
You are partially right. You will not get your wife's social security benefit as your pension benefit is probably too high. You will not get the top social security benefit at 90% unless you worked under social security for 30 years. if you worked under social security for 20 years or less, you will get 40% in the top tier. Between 20 and 30 years that top tier increases. See social security for details.
Thank Ronald Reagan for this removal of a benefit.

Re: Beware of Social Security

I'm not sure what you mean "most SC retirees have offsets so you will never collect a dime...that's why I will never work...." I'm not folllowing you.

I'm getting ready to retire and of course, want to do the right thing to cover my income.

Re: Beware of Social Security

If you are in civil service retirement there is a $1 reduction for every $2 in Civil Service Pension. Since the maximum social security benefit is around 24,000, if you recieve 48,000 in Civil service pension, you get nothing. i make 52,000 so i get nothing but must pay social security REGARDLESS if i decide to work. Many people here don't understand that. Take 1/2 of your civil service pension and subtract it from your expected social security benefit. THIS ONLY APPLIES TO CSRS and NOT FERS.

Re: Beware of Social Security

You are confusing 2 different things. The Govt Pension Offset law reduces Social Security earned from your SPOUSES work $2 for every $3. If you earn social security yourself, it is covered by the WinfallElimination Provision. That recalculates your social security to reduce the pension earned from 90% of the average salary covered by social security over the last 30 years to 40%. It will cost you a few hundred a month in social security but NEVER eliminate it.

Re: Beware of Social Security

bARRY,
You are wrong. I just recived counseling from Social security and My HR. There are two offsets for CSRS. One is the spousal offset and the other is the pension offset. I went to a DOE sponsored retirement seminar and several people freaked out whenthey found out

Re: Beware of Social Security

Dear Accountant,
You are sorely mistaken! Barry is indeed correct. You must be the one who is spreading all the erroneous information and causing people to panic needlessly. Get your facts straight.

Re: Beware of Social Security

Dear Accountant, GS14, Your friend , Barry, form the IRS is right. If your CSRS with 40 quarters and more worked SS it comes to about 40% of "full" draw from SS, besides your CSRS annuity. Unless they changed the law this year. Of course stranger things have happened this year but we won't go into that.

Re: Beware of Social Security

To everyone,
I will try to clarify.
There are two issues here. One is an offset against spousal social security. A percentage of your pension goes against your part of the social security earned by your spouse. Barry is right on this one. If your pension is $48000 and your social security benefit from your spouse is $24000 you get nothing.
The other deals with social security earned by you. If you earn material salaries paying social security taxes for 20 years or less the first tier benefit is 40%. If you earn material salaries paying social security taxes for 30 years or more that tier will be 90%. Each year going from 21-30 increases the first tier by 5% until you reach 90%.
Please note that this assumes you earn a pension whose salary was not covered by social security. I am not sure of all of the details on this issue so I will ask someone from social security to contribute to this issue.

Re: Beware of Social Security

GS 14..I guess you don't need to work! But your saying a 7 plus percent tax, you might not recover in SS, makes your mind up on weather or not your going to take a job. Wow!

Re: We'll FInd Out

My new sallry was $20k less than my last job, but with the pension there was a very nice gain in total income, which put me in a new bracket. Since my normal deductions under each income was at a lower rate, and I did not do anything to increase the deductions, my personal experience was just over $5,000 in taxes owed!

Re: Is this just for FERS

I retired on 10/2/09 and just turned 56. I worked 37 years and am CSRS-Offset. I plan to work part time to earn extra income. My question is the same: Is CSRS or CSRS-Offset retirees affected in the same way as FERS? Also, I am single and retired at a GS-7/10, so not rolling in it, far as ever falling into the 33% tax bracket. Should I be concerned and should I chose 10 for exemptions, too?

Re: Surprise on taxes

Just want to ask a quick question. I plan on taking an early retirement buyout this month from the government. I am currently a GS-12, 48 years old and plan on going back to work, but as working for a contractor. Do you think this is a good idea?

Re: Surprise on taxes

I would say as long as you don't start your pension (from the govt.) until you're ready to stop working there wouldn't be an tax problem. Depending on your buyout, if you do start getting a pension, it may be substantially reduced due to your "young" age and you would need to immediately upon starting that pension make an appropriate tax deduction from your pension. Remember that the "normal" withholding" assumes that you are not working, you need to either increase that withholding from your pension or increase the withholding at your new job. For what it's worth, on a $30,000 pension, I will have to pay an extra $5K in taxes on April 15th beyond what they withheld.

Re: Beware bof social Security

Not true. I receive 52k pension so there is no way i EVER can recive social seurity. It's a 1 for 2 offset. This only applies to CSRS

Re: Beware bof social Security

Accountant:

You are a veritable storehouse of misinformation! Barry from IRS and MSS from SSA are correct. The applicable law is the winfall elimination provision. Perhaps you may not get SSA benefits, but the rest of us who qualify with at least 40 SSA credits will get a reduced benefit.

Re: Beware bof social Security

Accountant, you are incorrect. check your facts.

Re: Beware bof social Security

Accountant, retired GS-14 you are incorrect. If you have 40 quarters of SS coverage either before, during or after work covered by CS, you get SOME Social Security. It is usually reduced substantially but if you have 40 quarters you are due a check from SSA. If you never file with SSA, you're losing money even if it's $20 a month....