Social Security and Early Federal Retirement

The Federal Retirement Employee Retirement System, or FERS, was created in 1986 by Congress. On January 1 of the following year, it became an effective retirement plan designed to provide benefits derived from three sources: Thrift Savings Plan (TSP), FERS Basic Benefit Plan, and Social Security.

If you want to calculate your FERS pension estimate, you may reach out to the Human Resources department at your place of employment. For example, the TSP provides several calculators and resources to determine income options based on your TSP account balance well into the future.

Forecasting Your Possible Social Security Pension at MRA
Regarding your Social Security pension forecast, the Social Security website offers several tools to help you make calculations. However, this forecast makes assumptions concerning a retiree’s Minimum Retirement Age, or MRA. For this reason, you need to understand how the choice to continue working or quit entirely after federal service impacts your SS pension.

Depending on the birth year, the MRA for FERS employees is between ages 55 to 57. FERS employees born before 1948 are assigned the lowest MRA of 55, whereas those born in 1970 or later are assigned the highest at 57. After five years of service, FERS employees can receive a full, unreduced, immediate annuity at 62. Once they reach 30 years of service, FERS employees can attain their MRA. At age 60, they are eligible for an immediate, full FERS pension with 20 years of service.

Federal retirees who have enough years of service upon meeting their MRA (before 62) will qualify for retirement in addition to the Retiree Annuity Supplement, or RAS. The Office of Personnel Management, or OPM, will pay the supplement in addition to the FERS annuity. You are entitled to these benefits as long as your wages for 2022 do not exceed $19,560. However, should you exceed this amount, there is an additional reduction of $1 for every $2 over the limit.

During the month you turn 62, the RAS will halt whether or not you begin drawing Social Security. A whole chapter in the CSRS and FERS handbook is dedicated to RAS details provided by the OPM, in addition to a FAQ section. While the RAS will not impact your eventual Social Security annuity, if you receive a supplement for not working, you are also not paying into FICA. So, your Social Security account will ultimately be without inflows for that specific time.

By taking advantage of the My Social Security online account, you can gain valuable insight into your wage-earning history to generate a projected pension formula. This projection, however, assumes recipients worked until 62 or their full retirement age. Furthermore, this projection also assumes recipients continue earning the same amount as the most recently reported annual income.

Social Security takes the highest 35 earning years into account when calculating your retirement benefit. Therefore, before retiring, it’s essential to determine whether you will have a recorded history of 35 years of paying Social Security taxes at MRA. Typically, annual income rises over time, enabling a delayed retirement to replace lower-income years with higher. Overall, this boosts your benefit, in addition to income credits for years where you did not work. There are also workarounds for those intending to retire at MRA without continuing to earn wages. A customized assessment option may involve a detailed data entry and extensive timespan, but it will be well worth the effort.

Individuals struggling to project their benefits may need to avoid the online calculator altogether and reach out to the Social Security office over the phone. This alternative will provide a more personalized level of assistance to provide accurate insight into your Social Security pension. If you are planning to stop working before 62, gather the necessary info from your Social Security account and call 1-800-772-1213 anywhere between 8 am and 7 pm.

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/