DETERMINATION OF MY SOCIAL SECURITY BENEFITS

Federal employees who pay into Social Security and are covered under FERS have 3 components to their retirement benefits plan.  The annuity is calculated based on the FERS annuity formula and the Social Security benefit is a separate calculation.  The TSP portion is based on the employee’s contribution level and matching contribution from the agency.

When the Social Security benefit is calculated your entire work history is evaluated.  Your Social Security benefit is based on your earnings over your entire work career.  Your benefit amount is also dependent on the age you start receiving retirement benefits.  The earlier you start receiving benefits, the lower your payment will be.  Full retirement age is 65 for those born after 1938.  For individuals born between 1943–1954, full retirement age is 66.  The age will gradually increase to 67 for individuals born in 1960 and beyond.  If you delay receiving benefits considerably beyond age 65, your benefit amount will increase by up to 8% per year for each year you delay up to age 70.  The increase will vary according to the year of your birth.  However, most retirement educators agree that there is no real benefit in waiting after age 70 to receive your Social Security benefit.

Just when decide to receive your Social Security is a matter of determining what best fits you and your family needs.  The age of first eligibility for Social Security is 62.  The earlier your received your benefit the less it will be.  However, the amount of your benefit may not be as important as needing the extra money to fill a gap.  On the other hand, your plans and resources might allow you to wait so that the amount you had planned for will be realized.  Retirement and how and when it is done remains a very personal decision unique to each individual’s circumstances.  Plan early to retire well.

P. S.  Always Remember to Share What You Know.

Dianna Tafazoli