Pinacle Personnel Services LLC | Debbie Hatch
If you retire from the federal government, prior to age 62 and under the Federal Employees Retirement System (FERS), you are eligible to receive the FERS Annuity Supplement. If you are 62 or older, and have amassed at least 40 credits, you are eligible to receive Social Security retirement.
These benefits have an annual earnings limit though. If you make more than $17,040 in 2018, for every $2 you earn, $1 will be subtracted from next year’s benefits.
One question that comes up in almost every retirement class is, “What constitutes ‘income’?”
As is frequently the case, it’s an “easy question” with a slightly more complicated answer.
FERS SUPPLEMENT: The Office of Personnel Management’s form RI 92-22 defines “earnings” for the FERS Annuity Supplement. Long story short, “Regardless of what income is called or who receives it, if it is actually wages for services you performed or net earnings from self-employment you secured, it must be included in applying the earnings test.”
SOCIAL SECURITY RETIREMENT: Social Security rules are, of course, very similar. Here’s a link to the Social Security Handbook that defines earnings which must be reported.
I publish a Question from the Classroom, every Monday. If you have questions about retirement, financial literacy, the Thrift Savings Program, Social Security, Medicare, or any of the slate of federal insurances, send me a message. I’d love to hear your questions.