Contributors

Postal Retirement Q&A April 2015 by Roseanne Jefferson

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Roseanne is a retired USPS employee with an extensive background in USPS retirement, disability retirement, OWCP, EEO, Labor Relations and HR. She conducts individual and group counseling and is able to comprehensively discuss the pros and cons of employees who are on OWCP, disability retirement and regular retirement. Roseanne will be happy to answer your postal retirement questions. Contact Roseanne at roseanne.jefferson@icloud.com. Click here for prior Q&As and Click here for Q&As prior to July 2014.

Good Day Postal Employees

Whew…….the only thing I can add to what you all already have been pummeling me with emails is know this….It’s NOT YOUR plant, or YOUR post office.  Everything that happens where you are, happens in every other postal facility all over the country.   I could write a book, or maybe I should write a book.  As I have always encouraged you –  KEEP up with your records. Get your financial papers in order, and above all, open your mail!  Review your personnel file in lite blue under MYHR (you are looking for your eOPF).  Get familiar with the forms in your file.  Know the difference between a Form 50 (Notification of Personnel Action SF 50) and an SF 2809 (Health Benefits Election). Knowledge of your retirement system is the key to a successful retirement in the future.

Q 1. Hi Roseanne, I have a retirement question I was hoping you can answer for me. I am 46 years old with 20 years with USPS. I was wanting to retire at 55 years old and take getting penalized the 5% a year (2 years early), but was wondering if I still get the social security supplement at 56 1/2 still or do lose out on it because I would retire before minimum age requirement. I realize I can’t get it at 55 but can I pick it up at 56 1/2. Thank you for all your work you do for us, it is greatly appreciated. M

A 1. Hi M,  Just from your question(s), I can tell you really don’t understand the process…and even the criteria to retire.

1. If you are FERS, its VERY unlikely that you can retire at age 55 (CSRS yes….FERS no)
2. I know you are FERS…so 55 is just not a discussion
3. If your MRA is 56 or 57…if you were born 1970 or later, your MRA is 57.  If you were born in 1969, your MRA is 56 & 10 months; if you were born in 1968, your MRA is 56 & 8 months.  So now we have cleared up your MRA issue…
4. NO you will NEVER get the Special Supplement if you don’t retire AT your MRA & 30 or more years; OR age 60 with 20 or more years…unless of course there is an early out.  Bottom line to your question, YES YOU WILL LOSE THE SPECIAL SUPPLEMENT.  Roseanne

Quite honestly, this is a perfect scenario, when your reach your MRA, you will have a full 30 years.  That would entitle you to the special supplement, until you reach age 62, when it’s your first opportunity to collect Social Security.

Q 2. Hi Roseanne, I have a question about what counts as income against the fers supplement. I have 27 years plus 4 years (paid back) military. I’ll reach my MRA in three years. I also will have about one year sick leave accrued by then. My understanding is that only my actual postal time counts towards the fers supplement (30 into 40) 75%, is this correct? I don’t plan to work elsewhere after retirement but we have stock interest and dividends that can be substantial , (over the $15,120 limit) , does this count as earnings that can reduce my fers supplement ? I’ve been heavily investing in the tsp so the supplement will be the bridge to carry me thru to the time until I can start drawing on it.

Thank you for your help and ENJOY your retirement ! W

A 2. HI W,  The FERS supplement is to be a replacement, if you will, for Social Security, the third component in your retirement plan.  Just like working when collecting Social Security (if not over 67), their is a limitation on your “earnings”.  And TRUE only postal time counts in the special supplement (bought back military doesn’t count in the Spec Supp).  I don’t know how interest or dividends would count as “earnings”…but I am NOT a financial expert in that area, and would suggest you find an accountant / CPA to ask if being age 62 and receiving Social Security, would your dividends and/or interest IMPACT the Social Security check.  That would be a way of finding out that information, because it very difficult to get information about the special supplement.  Let me know how it turns out.  And thank you, I do try to help all out there that are hungry for retirement information.  Roseanne

Q 3. Ms. Jefferson. I am nearing retirement and I’m carrying over 440 hours of annual leave each year. Would it be more advantageous to use up my annual leave prior to retirement or cash it out at retirement time? TJ

A 3. Hi TJ,  There are several ways to look at it.  One way is to KNOW that when you get (annual leave) in a lump sum, it is “mad” taxed…like you actually made that figure every 2 weeks.  And you can imagine just how over the top the taxes are…. they take out Medicare, Fed Tax, State Tax, and any other bi-weekly issue that is applicable. So when you say “use it up”, I agree you earned it and you shouldn’t lose it.  But it still does require supervisory approval for taking annual and that sometimes (especially now) is not just a given.

You will also deal with the issue of time frames in retirement, just as it relates to transitioning from a bi-weekly pay, to a monthly pay.  It will take time processing your retirement application fully, along with hundreds of others that OPM is completing your retirement paperwork.  But you are paid “interim” checks until your retirement is completely processed, (so that you have income). I would suggest a minimum 80 hours, but 160 – 200 is probably a good cushion, without too much taxes coming out.  When I retired, I was paid for all my earned annual leave.  I had hundreds of hours that if not for the early out, I would not have retired with that much annual leave…(because of the HUGE taxes on it).   I had about $14,000 in annual leave (gross), net was around $7900.  But its a choice that only you can make,  because only you know your financial situation.  Good Luck, AND Happy retirement….it is bliss!!   Roseanne

Q 4. My retirement date is Sept 1, 2015 with 30 years and 8 months of service.  I will be 56 in August, so this retirement will be based on my MRA.  I also have 1000 hours of sick leave so I believe that will give me about an additional 6 months of service time.   I received a pay raise this past January for the first time in either 3 or 4 years.  I had been topped out as an 18 for the past 10 years.  The increase was $4000.  I will have to work and additional 2 more years to get the benefit of the increase since my salary was stagnant for 3 years.  I guess I am trying to decide will it be worth having to work an additional 2 years and 3 months to get the full benefit of the pay increase.  Hopefully, I would also see an increase in pay over the last 2 years as well.

Also, of concern… I did the unthinkable and dipped into my TSP which I now totally regret, and my TSP balance is not where I would like for it to be.  But, hind sight is 20/20.  The extra time would give me a chance to add more money to my TSP.  I would like to think I could work longer, but the stress of the job is very tough.  I’m thinking I could work else where with less stress, but I will have to pay back $1 for every $4 I make, because of the FERS supplement, right?  And also, can I take the supplement until age 62, then take 1/2 of my husband’s social security and hold off on taking my Social Security until age 67 to maximize my Social Security benefits?  I’m struggling to find the best retirement date for myself.  Thanks for your help!

A 4.  Your high 3 is your high 3…and if you were to get a raise every year….you would be chasing your tail….to try to get the high 3 to be the same as your current wage!!  Without knowing precisely what your salary was, and is now with the increase, its hard to say.  I assume you are a FERS employee and understand that FERS (retirement portion) is only 25% of what your entire retirement is intended to be.  SSecurity weighs about 35% and your TSP weighs about 45%, for a full 100% retirement.  The longer you stay, not only does your high 3 in your case, use the extra 4G’s a year as a base, but it does give you the higher percentage that the USPS deposits for you, as well as increasing the total of your TSP when you do retire.  And then it gives you the opportunity to increase into the TSP fund before retirement.   Roseanne

Q 5. Hi Roseanne,  A quick thank you for all you do for those of us who are clueless. You are appreciated more than you can imagine.  This should be an easy one…is the USPS Personal Statement of Benefits that is sent to us each year ever wrong !? On the back it shows the date of your first eligibility for full or reduced optional benefits. It shows my date as 1/13/16..the day before my 56th birthday. I will have 20 years 5 months. That doesn’t seem like enough from all I have read. Your thoughts ??  And thank you in advance..MZJ

A 5. Hi MZJ, I know…… that statement makes us look like WE rake in the bucks, but it does point out very interesting things like how MUCH your benefits really cost the organization.  To answer that question I would need to know the following….

Based on your email here is what I know…EOD: 08–12-1995 DOB: 01/14/1959 – According the FERS rules you are eligible for retirement under the MRA+10..(age MRA (in your case 56)) and you have 10 (or more) years of service.  You can retire……but at a HUGE cost….first it’s not FULL retirement, so your retirement is reduced by 5% for each year under 62 (and that’s 30%) AND ON TOP OF THAT, you are NOT eligible for the special supplement.  So NO it seems like it’s not enough because its not really full retirement.  Full retirement is age 56 with 30 or more years OR age 60 with 20 or more years or age 62 with 5 or more years.  YOU can hang on another 4 years…..you can!!  Roseanne

Till we speak again…….. Roseanne

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