Early Social Security and Federal Retirement

The Federal Employee Retirement System (FERS) was established by Congress in 1986 and went into operation on January 1, 1987. This retirement program offers potential advantages from three separate sources. Covered employees’ retirement benefits will come from Social Security, the Thrift Savings Plan (TSP), and the FERS Basic Benefit Plan.

You can get a FERS pension estimate from your federal organization’s human resources department. What happens to your Social Security benefits? The TSP offers several calculators and tools to assist you in forecasting your future income alternatives based on the balance in your TSP account.

Your Social Security and MRA

Your Social Security pension can be predicted on the Social Security website, but it makes a crucial assumption for people retiring at the Minimum Retirement Age (MRA). This article will examine why people retiring at their MRA should be aware of how working or not working after serving in the federal government impacts their Social Security income.

FERS employees are eligible for a full (unreduced) instant annuity at age 62 with at least five years of service. They are also qualified for a full, immediate FERS pension whenever they reach their MRA with a minimum of 30 years of service or when they turn 60 with 20 years of service.

The FERS MRA ranges in age from 55 to 57, depending on the birth year. The range is 55 for those born before 1948 to 57 for those born in 1970 or later, with those born before 1970 having the lowest MRA.

The good news is that you will receive your Retiree Annuity Supplement (RAS) if you leave federal employment with enough time at your minimum retirement age or any age before age 62 to be eligible for retirement. You are entitled to receive the supplement, which is paid by the Office of Personnel Management (OPM) in addition to your FERS annuity, as long as your post-FERS retirement earnings do not exceed $19,560 in 2022. Your supplements will be reduced by $1 for every additional $2 over the cap.

The RAS ends the month you turn 62, whether or not you begin receiving Social Security at 62. These and other details about the RAS are covered in an entire chapter of the OPM’s CSRS and FERS Handbook. 

The RAS has no bearing on your ultimate Social Security income. Although you are not paying FICA tax since you are receiving the supplements for not working, your social security account is not receiving any contributions from any wages during this time.

Your wage history is visible in your Social Security online account and is utilized in a formula to determine your projected pension. The forecast, however, considers an annuity based on whether you kept working until age 62, your full retirement age, or age 70. These estimates depend on the supposition that you will continue to earn around the same amount as you did the previous year.

Will you have 35 years of Social Security tax payments at your MRA?

Remember that Social Security builds your retirement benefit using the 35 years of your highest earnings. Delaying retirement typically enables you to replace specific low-income periods with larger years, which increases your benefit because your yearly income tends to increase with time. However, each year it did not work, you received no income credit for calculating your pension if you don’t have up to 35 years of earnings.

Use the Social Security online calculator for just a personalized evaluation as a workaround if you plan to retire at your minimum retirement age and stop working. Be aware that this approach requires time and careful data entry. 

It’s advisable to acquire expert assistance rather than take on the calculator problem. If you plan to stop working before age 62, consider calling Social Security for specialized help in obtaining an accurate estimate of your Social Security pension. Verify that all of the data in your Social Security account is accurate. Utilize the free phone number at 1.800.772.1213. It is accessible between 8 a.m. and 7 p.m on workdays.

Contact Information:
Email: [email protected]
Phone: 9187441333

Bio:
Mark, a lifelong Tulsan graduated from Westminster College, Fulton, Missouri with a Bachelor of Arts in Accounting. Mark served in the United States Army as a Captain in the 486th Civil Affairs BN. Broken Arrow, Oklahoma and retired in 1996. Mark is married to his high school sweetheart Jenny and has four beautiful children. Mark’s passion for his work, which includes over 20 years in the Financial Industry started as an Oklahoma State Bank Examiner. Mark examined banks throughout Oklahoma gaining a vast knowledge and experience on bank investments, small business and family investments. Mark’s experiences include being formally trained by UBS Wealth Management, a global investment firm where he served as a Financial Consultant specializing in Wealth Management for individuals & families. Mark is a licensed Series 24 and 28 General Securities Principal and an Introducing Broker Dealer Financial Operations Principal. Additionally, Mark is a Series 7 and 66 stockbroker and Investment Advisor focusing on market driven investments for individuals, businesses and their families.

Mark specializes in providing financial knowledge, ideas, and solutions for federal employees, individuals, families and businesses. We serve as your advocate, and assist you in the design and implementation of financial strategies while providing the ideas to maximize your security and wealth. Our goal is to give you maximum control of your financial future. We provide the expertise to help you with personal issues such as: practical tax Ideas, risk management, investment solutions, and estate preservation.

Additionally, we’ve counseled hundreds of employees on their transitions from careers in federal government, and private industry to their next life stage, whether that is retirement or a second career. We specialize in devising strategies that roll your TSP, 401(k), pension plan, to a suitable IRA to meet your objectives.

Disclosure:
Securities offered through GRF Capital Investors, Inc., 6506 South Lewis Avenue, Suite 160 Tulsa, OK 74136 Phone: 918-744-1333 Fax: 918-744-1564

Securities cleared through RBC Capital Markets, LLC. 60 South 6th St., Minneapolis, MN 55402

Member FINRA www.finra.org / SIPC www.sipc.org

Broker Check http://brokercheck.finra.org/