Reg Jones Expert's View

Reg Jones

While the number of CSRS and CSRS Offset employees is declining, there are still plenty of you on the rolls. And nearly all them—exceeding 90 percent—already have the combination of age and service to retire. So it’s fitting that we start there as we delve further into making the retirement decision.

CSRS

ADVERTISEMENT


If you are covered by the Civil Service Retirement System, whether in CSRS or CSRS Offset, you can retire voluntarily on an immediate annuity if you meet the following combinations of age and service: age 55 with 30 years of service, 60 with 20 or 62 with 5.

When you retire your annuity will be calculated using the following formula:

0.015 x your highest three years of average salary x 5 years of creditable service, plus

0.0175 x your high-3 x 5 years of service, plus

0.02 x your high-3 x all remaining yeas and full months of service

The rules for CSRS special category employees, such as law enforcement officers and firefighters are different. If you are one of those, you can voluntarily retire at or after age 50 with 20 years of covered service and your annuity will be computed using an enhanced formula: 0.025 x your high-3 x 20 years of covered service, plus 0.02 x all remaining service. (Further, in these occupations mandatory retirement generally applies at age 57 with 20 years of service, although that can be extended under some circumstances until age 60.)

While creditable service includes active duty service in the armed forces of the United States, whether you need to make a deposit to get credit for that service depends on when you were first hired as a civilian employee. If you were first hired before October 1, 1982, you have two options. You can either make a deposit for that time before you retire or decide not to do that. If you choose the latter course and are eligible for a Social Security benefit at age 62 (or when you retire if after age 62), your annuity will be recomputed to eliminate all credit for any post-1956 military service

On the other hand, if you were first hired on or after October 1, 1982, you won’t receive any credit for your active duty military service unless you make a deposit to the civilian retirement system before you retire. The choice is up to you.

CSRS Offset

A CSRS Offset employee is covered by both CSRS and Social Security. With one twist, everything I wrote about retirement under CSRS is true for those covered by CSRS Offset.

Here’s the twist: If you retire and are eligible for a Social Security benefit at age 62, your CSRS annuity will be offset by the amount of Social Security benefit you earned while covered by CSRS Offset. If you retire after reaching 62, the offset will occur on the day you retire. The amount you receive in total will be the same; it will just come from two different places: OPM and the Social Security Administration.

FYI: CSRS and CSRS Offset retirees are eligible to receive annual cost-of-living adjustments (COLAs) regardless of the age at which they retire.

Something to Consider

If you are already eligible to retire, you have to ask yourself a few questions. Am I emotionally ready to retire? Am I financially able? Do I know what I’m going to do with my time after I leave?

A few months ago those questions would have been easier to answer. Now with COVID-19 hanging over us for the foreseeable future, those answers might be different. A word to the wise: Think before you jump.

Wondering if You Should Move on From a Federal Job?

CSRS Employees Down to 4 Percent: Are you one? (Feb 6)

ask.FEDweek.com: Calculating a Federal Annuity – FERS and CSRS

FERS Retirement Guide 2020