Return to Article: Really, You Can Retire!
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42609
Aug. 1992 and I'm in my 16th year in federal government. I spent 11yrs 11mos in the military; at the time I requested information about the buy back, no one understood how this purchase would affect my retirement. And, here, now it's so much information about this military buy back that it just confuses the heck out me. One question for the experts out there; how much would it cost me to buy back these years and what affect in dollars does it have on my pension? I'm 44(45) and apparently have about 18 more years to work before I'm eligible for SS.
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16817
I am 20-year retired military currently working on a second government career at DHS. Is it better to keep the two pensions separate or waive my military retirement for FERS?
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16315
If I only had very few credits under Social Security and only had two years of military service and I am under CSRS do I really have any benefits to the military time buy back. In other words, do I really need to buy back that time?
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15637
Here is some clarification for Phil and others worried about the unpaid military deposit affecting the spousal survivor benefit. First of all, there is not a 10 percent reduction to the spousal survivor benefit if the military deposit is not paid. The reduction would be the same for a surviving spouse as it would be for the retiree -- the survivor benefit would be recomputed without the military service when the spouse becomes entitled to Social Security survivors benefits.
If the retiree was not eligible for Social Security (did not have 40 credits), then there would generally not be a survivors benefit payable.
If the surviving spouse is eligible for Social Security survivor's benefits, then it is important that the military deposit was paid. In order for a spouse to be eligible for Social Security widow's benefits, the "worker" had to be fully insured (40 credits if born after 1938) or must have had recently earned credits of coverage. For example, if you die in 2006 and your year of birth is 1952 (54 years old) you would need 32 credits to be fully insured for survivors benefits (1 credit for each year after reaching age 21).
If an employee dies who was first employed under CSRS before October 1, 1982, the surviving spouse can make a decision to make a deposit for post-1956 military service.
If the survivor is not eligible for Social Security survivor benefits, the military deposit need not be made. Survivors who are not sure of their eligibility for benefits should contact their local Social Security office for further information.
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15578
Phil,
I'm a recent retiree who also had two years of military service and will not qualify for social security at age 62 so I opted not to make deposit to the retirement fund for my military service. I was also unaware of any potential impact on my spouse's survivor annuity because of this decision. I should add that I'm a CSRS retiree.
After reading your post I checked OPM's CSRS/FERS Handbook online and could not find a specific reference to a reduction in the survivor annuity under these circumstances. I contacted my former agency and requested that they obtain clarification from OPM.
The OPM response was as follows: "I can only say that the post 56 military deposit will be treated the same for the survivor as it would have for the retiree. If you want a more specific answer then I'll need more details about the employee's retirement and service history."
"I can also say that there is not a standard reduction amount for survivors whose spouses did not pay their post 56 military deposit. There is either no reduction or the post 56 military service is taken away as creditable service."
After advising OPM that I was a CSRS retiree first employed prior to 1982, OPM added the following: "If a CSRS retiree who was first employed under CSRS before 1982 retires at age 60 with an unpaid CSRS post 56 military deposit then OPM will call up the retiree's case when he turns 62 and check to see if he is receiving social security benefits. If this retiree dies then we will call up the survivor's social security record at age 60 and see if he/she is receiving survivor benefits from social security based on the deceased employee's records. So the answer really depends on the age of the survivor and how old they are when the retiree dies. But basically the survivor's military deposit will be handled like the retiree's except we look to see if the survivor is entitled to social security based on his/her deceased spouse once at age 60 or death whichever is later."
Maybe Tammy could address this issue more fully in a later article for both CSRS and FERS employees.
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15558
OK, already. I get your point! I agree with all of you who are telling me that when you add your active military service to your civilian service, you can certainly have more than 22 years under FERS in 2006! I apologize for not adding that clarification to my comment. The only thing to be sure to understand is that in order to credit your military service under FERS, you must pay for it! This is also true in most cases for CSRS. If anyone has questions about the military service deposit, see my previous column on this topic.
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15522
You stated in your follow up to comments to your original article that the most anyone in FERS can have for retirement is 22 years. You might be forgetting that many of us have military time that counts too, especially in this generation.
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15520
Phil,
Thanks for that info. I never heard of that either. After 32 years of service, I swear, I think they want to keep us in the dark until the eleventh hour, enabling them to reduce our annuity. -
15516
I'm CSRS, have 31 years of service and am 55 now. My back is hurt. My understanding of the military payback is this: If when you reach age 62 and have not paid back and are eligible for social security, your government pension gets cut by around 6 percent. If you have paid it back, and have the 40 quarters social security, then your government pension isn't changed. They say they only check at age 62 but think that will change. Vets, pay it back now. Like all of you, had this been explained better 20 years ago I wouldn't be paying 5K in interest
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15508
My wife and I are long-time federal employees (under CSRS). She is finishing her 32nd year with the Social Security Administration. She has been working part time (32 hours/week) for the last dozen or so years. I understand that there is a 2 percent decrease in the pension for each year she is under age 55 when she retires. The $1 million dollar question is "whether there is a further reduction to her pension because of the part-time work." How can I find out how this part-time work schedule impacts our retirement plans? My 51-year-old wife is a GS-11/10 (with a high-3 average of $54,000) who began to work October 1974 with a possible early-out date of September 2006. I calculated a pension of between $28,000 (including estimates for part-time work reduction) to as much as $32,000. Who can I ask? Thanks for your input.
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15495
Re: "Since FERS covers employees hired after 1983, the most FERS service someone could have right now is about 22 years."
Actually I think there are many FERS employees with greater than 22 years of service. Many of us veterans have made the contribution to count our military time. I am a civilian as of 1986 but have 27 years total service.
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15490
Here's a little-known fact that no one ever told me. I only just recently discovered it after 35 years of service that includes two years of military service: If you don't pay in for your military service and you don't qualify for social security, there are no repercussions. However, your spouse's survivor annuity will be docked 10 percent of what you owe (including interest) each year. Had I known this I would have paid it right away and saved myself $1,800 in interest!
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15489
Since FERS covers employees hired after 1983, the most FERS service someone could have right now is about 22 years.
I bought back my 9.5 years of military service. As of now I have 27 years of service under FERS and will have more than 35 years of service when reaching my MRA of 56 in 2013. Currently I have 27 years of service. I believe the statement of 22 years is for those without prior service. Am I wrong?
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15484
I read your reply to the comments on FERS retirement. You said the most anyone in FERS can have right now is approximately 22 years. I was military and entered civil service in 1990 under FERS. I paid back my military time and as of now have nearly 31 years of credit towards FERS retirement. However I am still "too young" as I do not meet minimum retirement age. So it is possible to have more than 22 years of FERS credit.
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15483
Great series of articles, with extremely valuable information. I look forward to reading them each week. Thanks!
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15480
"Many FERS employees who are currently eligible to retire have spent a portion of their career in another job (in the private sector or the military). Since FERS covers employees hired after 1983, the most FERS service someone could have right now is about 22 years."
This needs to be clarified as I converted to FERS from the old CSRS system. I am 47 years old with 29 years of federal service, albeit not all FERS.
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15478
Re: (Question) How does a 56-year-old FERS employee with 34 years of service making $85,000 per year only get a gross retirement pension of $17,765? That's less than 21 percent. Don't FERS employees who retire before age 62, but who still reach the minimum retirement age with 30-plus years of service get 1 percent per year -- thus a 34 percent pension (presuming that the $85,000 is the high-3 average salary)?
(Your answer) Many FERS employees who are currently eligible to retire have spent a portion of their career in another job (in the private sector or the military). Since FERS covers employees hired after 1983, the most FERS service someone could have right now is about 22 years.
(My comment) Careful - there's always that 1 percent exception. Former active duty military (not retired) can buy the military time and add to FERS. I'm FERS, and I can retire in September 2006 with 30 years. I wouldn't change your answer -- just be aware!
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15473
Is the Retirement Estimator at the USGS Web site accurate? I'm using it to estimate my retirement pension and have recommended it to others. Need to know that I'm getting an accurate estimate. The URL for their estimator is:
http://hr.er.usgs.gov/calculators/retire/
Thanks -- I really enjoy your Friday column!
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15471
Ever since I entered into federal service in 1982, I have followed, planned, and performed constant evaluation of my potential expected retirement at the age of 55. I am currently 44 years young and have calculated with my CSRS and a minimum of 5 percent into TSP (no matching), that I am expecting a take home of 103.6 percent of my salary. Yes, that is correct. In recent years OPM has had numerous Web links that include calculators that determine almost exact amounts of taxes, deductions, and exemptions to determine formulations of retirement income. I purposely joined the USDA to relish this opportunity for early retirement. There was no advantage to switching to FERS that I was provided the opportunity to do so twice. Now we have uphill battles to be fought based on the high three changing to five, the potential elimination of CSRS (freezing) due to drop in participants, and the new pay banding mandated effect which eliminates locality, pay raises, and additional vast array of increases in salary. How do we do this? I don't know. Our lobbyist group is thinner and weak. If I could do one last wish, I would jolt myself to 55 with my 35.19 years of service to the U.S. population!
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15470
Could you explain how to calculate a pension for someone who switched from CSRS to FERS when FERS first started and has "frozen CSRS" funds?
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