Previous columns were aimed at folks already retired and those who were on the verge of doing so – but let’s take a look here going back to work for the government. Retirees sometimes change their minds and want to go back after all – sometimes very shortly after they retire. And the main thing they want to know is how that would affect their annuities.
Here’s the three-part answer. In most cases, your annuity will continue; in a few it will stop; and, in fewer still, you may be able to receive both your annuity and the salary of your new job. Let me explain.
Voluntary retirement
If you retired voluntarily and go back to work for the government, you’ll continue to receive your annuity; however, the salary of your new position will be reduced by the amount of that annuity. For example, if your annuity was $50,000 and your new salary was $100,000, you’d only be paid $50,000 ($100,000 – $50,000 = $50,000).
Involuntary retirement
If your retirement was involuntary because of a RIF, job abolishment, transfer of function, reorganization, etc., your annuity would stop and you’d begin receiving the full salary of your new position. As a result, you’d have the same employment status as any other federal employee in an equivalent position with a similar service history.
The big question is this. What happens when you want to retire again? That, too, depends.
If you worked on a full-time, continuous basis for at least one year – or its equivalent if you worked part time – you’ll usually be entitled to a supplemental annuity—an add-on to your original annuity. On the other hand, if you worked for at least five years, you’d usually be entitled to a re-determined annuity, which would replace the one you are currently receiving.
In either case, you’d have to contribute to the retirement fund, either while employed or before you retire again, to be eligible for those additional benefits.
Note: If your annuity stopped when you took the new job, you’d have to meet the age and service requirements to be eligible to retire again. That could be a consideration if for example you originally retired with an early-out but would have to qualify under standard rules the second time.
Annuity and Salary
In rare cases, you’d be able to receive both your annuity and the full salary of your new position. Originally, this possibility applied solely to positions for which there was exceptional difficulty in recruiting or retaining a qualified employee, a direct threat to life or property, or a circumstance that warranted emergency employment.
Now a few agencies (or portions of them) are able to extend this same benefit to other reemployed annuitants—especially if you work in a high-demand occupation where the government has trouble filling positions. So, if you are a retiree who is being considered for reemployment, be sure to ask if one of the exceptions above applies to you.
Raise, Other Financial Changes Taking Effect with New Year for Federal Employees
Federal Retirement: When Age Isn’t Just a Number
Don’t Get Surprised by Taxes in Retirement
Upcoming COLA for Retirees to Be Largest in Four Decades
Key Numbers in TSP, Other Programs Change with New Year
Retirement Processing and Interim Payments: Hurry Up and Wait
Federal Retirement Mistakes to Avoid
