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CSRS Offset

How does the CSRS offset retirement situation work?

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.

Agencies can request to have John Grobe, or another of Federal Career Experts' qualified instructors, deliver a retirement or transition seminar to their employees. FCE instructors are not financial advisers and will not sell or recommend financial products to class participants. Agency Benefits Officers can contact John Grobe at [email protected] to discuss schedules and costs.

About the Author

John Grobe is President of Federal Career Experts, a firm that provides pre-retirement training and seminars to a wide variety of federal agencies. FCE’s instructors are all retired federal retirement specialists who educate class participants on the ins and outs of federal retirement and benefits; there is never an attempt to influence participants to invest a certain way, or to purchase any financial products. John and FCE specialize in retirement for special category employees, such as law enforcement officers.