Some federal retirees decide to work full-time after retirement, but what about those who elect just to work part-time? You may decide not to work upon federal retirement, but what if the opportunity to do some employment part-time becomes an option?
It’s not uncommon for federal retirees to continue working part-time after retirement—whether for personal satisfaction, financial reasons, or simply to stay active. Many move into private sector employment or consulting work. In these cases, your federal annuity generally continues without reduction, but Social Security earnings rules and FERS Supplement reductions may still apply.
The Center for Retirement Research at Boston College in a recent New Issue in Brief entitled Who Works After Claiming Social Security? shares that about 40 percent of individuals work at some point after claiming, typically for several years.
Potential Impact to Your Federal Benefits
Below is a simplified breakdown of how your federal benefits may be affected if you choose to work after retirement, with consideration of:
The Social Security Earnings Test
If you’re under full retirement age (FRA)—between 66 and 67 depending on birth year—your Social Security benefit will be reduced if your earned income exceeds the annual limit. Once you reach FRA, you can earn any amount without impacting Social Security benefits.
The Federal Annuity Offset
If you return to federal service, your salary is typically reduced by the amount of your annuity. If you work outside federal service (private sector or consulting), your annuity remains unaffected.
The FERS Supplement
If you retired under FERS and are under age 62, the FERS Supplement is subject to the same earnings test as Social Security. The supplement ends at age 62.
Example: Working Part Time Before FRA
Assume the retiree:
- Retired under FERS
- Receives:
- Federal annuity: $2,000/month ($24,000/year)
- FERS Supplement: $1,000/month ($12,000/year)
- Social Security (claimed at 62): $1,200/month ($14,400/year)
- Works part-time earning $25,000/year
- Is 62 years old and below FRA
- 2025 earnings limit: $22,320
Impact of the Earnings Test
| Income Source | Before Working | After Working (with reductions) |
| Federal annuity | $24,000 | $24,000 |
| FERS Supplement | *$12,000 | *$11,000 |
| Social Security | *$14,400 | *$13,060 |
| Part-time earnings | $0 | $25,000 |
| Total Income | FERS $36,000 SS $38,400 | FERS $60,000 or SS $62,060 |
How reductions are calculated:
- One can have FERS supplement or Social Security but not both
- For illustration: Reduction: $1 for every $2 over → Both Social Security and FERS Supplement are reduced
What Changes at Full Retirement Age (FRA)?
Let’s assume FRA is 67. At this point:
- Federal annuity: $24,000/year
- FERS Supplement: No longer payable
- Social Security: $14,400/year (paid in full—no reduction)
- Part-time job: $25,000/year
| Income Source | At FRA |
| Federal annuity | $24,000 |
| FERS Supplement | $0 |
| Social Security | $14,400 (no reduction) |
| Part-time earnings | $25,000 |
| Total Income | $63,400 |
Your federal annuity is safe if you work outside federal service. After reaching FRA, employment earnings no longer reduce Social Security benefits. This is why many retirees delay claiming Social Security until FRA if they plan to keep working.
