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SS Timing Question
Old 06-22-2013, 08:56 AM   #1
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SS Timing Question

I'm sure these questions have been asked and answered many times, but I wanted to get the Board's response to a couple of specific questions. DH retired as a Federal Employee 5 years ago at the age of 61. At 62 he claimed SS, and the Federal pension decreased a couple of hundred dollars due to WEP. The pension would have reduced regardless of whether or not he elected to take SS at 62, so he decided to take the SS. DH had a break in federal service for ten years and had his 40 quarters, so the SS was a bit larger than it would have otherwise been (currently 1106 after a medicare premium of 146.90/mo due to high income on our 2011 return). I have not retired yet and will reach 65 this year. If I were to claim SS at full retirement (66) my payment is estimated to be 1,868. If I wait until I am 70, it is estimated to be 2,743. Longevity runs in my family and we will not need the money at 66 even if I stop working. My first question is, can I claim a spousal benefit of half his at age 66 and then switch to mine at 70? I thought I had read somewhere that to ability to use this tactic depended on who the higher earner was, social security wise, and made a difference as to whether the higher earner could claim spousal benefits on the lower earner and then switch. I can't remember where I read this however.

Second question - I spent time as a federal employee back in the 70's - about 6 years. I don't think that I took out a lump sum payment when I left but am not sure. I sent an inquiry to OPM a couple of months ago and have not received a response yet. (That's another issue - how do I get them to respond?). I have only had 22 years of substantial income since I re-entered the workforce. If I have a small federal pension (boy would it be small) would I be hit by WEP when I do claim SS? I assume that if it were to be hit by WEP, the combined SS payment when combined with the reduced OPM pension would not be less than the SS payment if I didn't put in for a pension with OPM.

Any thoughts - enlightenment would be much appreciated.
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Old 06-22-2013, 10:58 AM   #2
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Regarding your second question - - If you worked only 6 years for the federal government, back in the 70's, you were probably in the (older) CSRS pension system, not the (newer) FERS system that was instituted in the 1980's.

To the best of my understanding, you would not qualify for a CSRS pension on your own since you only worked 6 years. So, no problems with WEP. Probably you would be entitled to a refund of any money you contributed towards the pension that you did not get, although I am not sure about the details. Maybe one of our CSRS retirees would know (my pension is FERS), or you could try reading about CSRS on the www.opm.gov/retire website. You are right, I suspect the lump sum wouldn't be much at all. I don't know anything about spousal benefits.

OPM is often taking months and months to process current pensions and have been way behind on that. Apparently they are understaffed/overwhelmed. It is almost impossible to get any response from them, as I understand it, and quite a few on the www.federalsoup.com message board have had to get their congressmen involved just in getting their pension payments started after recently retiring. You could try calling, I suppose, if you think the lump sum would be worth it.
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Old 06-22-2013, 11:18 AM   #3
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I'm sure these questions have been asked and answered many times, but I wanted to get the Board's response to a couple of specific questions. DH retired as a Federal Employee 5 years ago at the age of 61. At 62 he claimed SS, and the Federal pension decreased a couple of hundred dollars due to WEP. The pension would have reduced regardless of whether or not he elected to take SS at 62, so he decided to take the SS. DH had a break in federal service for ten years and had his 40 quarters, so the SS was a bit larger than it would have otherwise been (currently 1106 after a medicare premium of 146.90/mo due to high income on our 2011 return). I have not retired yet and will reach 65 this year. If I were to claim SS at full retirement (66) my payment is estimated to be 1,868. If I wait until I am 70, it is estimated to be 2,743. Longevity runs in my family and we will not need the money at 66 even if I stop working. My first question is, can I claim a spousal benefit of half his at age 66 and then switch to mine at 70? I thought I had read somewhere that to ability to use this tactic depended on who the higher earner was, social security wise, and made a difference as to whether the higher earner could claim spousal benefits on the lower earner and then switch. I can't remember where I read this however.
Since your DH has started benefits you will be able to claim an early spousal benefit. IIRC waiting until your FRA to take it ensures that you can take your normal age 70 benefit when you reach 70. So you can collect spousal from FRA up to 70, and your own unreduced benefit at 70 and beyond. The survivor of a married couple gets the higher benefit of either spouse, so you waiting until 70 would be beneficial if your DH survives you.

Since your DH has already started benefits I do not believe he is eligible for spousal benefits unless they are higher than he is currently receiving.
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Old 06-22-2013, 11:50 AM   #4
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W2R; Thanks for the response. Yes I was in CSRS. I thought all you needed under CSRS was 5 years and you could apply for a pension at 62, but your info is obviously different so I'll do a bit of research. And perhaps they will eventually respond to my request. I did consult my old agency about how to find out and was told the appropriate info to provide. It has only been about 2 months since I inquired.

Animorph - Thanks - I have been hoping that my memory was wrong regarding my recollection that you can't claim a spousal benefit if your SS is higher than your spouse. Perhaps my recollection related to if I filed a claim prior to reaching FRA
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Old 06-22-2013, 12:06 PM   #5
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Golden sunsets, you are probably right about that. I really don't know much about CSRS, but was just hoping that someone else would post after me about it. I'm sure that whatever your old agency told you is correct. Good luck with OPM.
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Old 06-22-2013, 12:22 PM   #6
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Golden sunsets,

If I interpret this correctly, according to this site, 5 years of service should net you a pension at 62 ...
Eligibility

(As I have no knowledge of the federal system, I can't help you any further.)

Best of luck,

omni
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Old 06-22-2013, 02:03 PM   #7
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Gs, I think Ani's comments on taking spousal benefits from your husband's account - 1/2 his FRA benefit (I estimate at ~$850/mo) - when you hit 66 till you're 70 & then take your own SS benefit is having your cake & eating it too.
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Old 06-22-2013, 09:20 PM   #8
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Animorph - Thanks - I have been hoping that my memory was wrong regarding my recollection that you can't claim a spousal benefit if your SS is higher than your spouse. Perhaps my recollection related to if I filed a claim prior to reaching FRA
Your DH claiming at 62 locked in the lower benefit and eliminated the chance to take a lower spousal benefit. On the other hand, you would have had to claim or claim and suspend before your DH could receive spousal benefits. Sounds like you might have an age difference that would have made that difficult anyway.

But you should be able to claim spousal at FRA regardless of having the high benefit.
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Old 06-23-2013, 07:04 AM   #9
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Golden sunsets,

If I interpret this correctly, according to this site, 5 years of service should net you a pension at 62 ...
Eligibility

(As I have no knowledge of the federal system, I can't help you any further.)

Best of luck,

omni
Thanks Omni550; I dug out a CSRS manual and concluded the same thing. After posting yesterday that I had written to OMB(April 9nth) and not heard back, I did receive a reply yesterday, saying that they had no record of my employment and to send documentation. I don't know whether to interpret this as 1) likely that I requested a refund of my contributions, or 2) sloppy record keeping on their part. It is entirely possible that I did receive the refund, but I just don't recall and don't want to leave any $ on the table, even if it is only a couple of hundred dollars a month. All I could find for documentation though, after an extensive search, was W-2's. Sent copies of those off last night plus a request to the National Archives for my civilian service record.
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Old 06-23-2013, 09:31 AM   #10
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Thanks Omni550; I dug out a CSRS manual and concluded the same thing. After posting yesterday that I had written to OMB(April 9nth) and not heard back, I did receive a reply yesterday, saying that they had no record of my employment and to send documentation. I don't know whether to interpret this as 1) likely that I requested a refund of my contributions, or 2) sloppy record keeping on their part. It is entirely possible that I did receive the refund, but I just don't recall and don't want to leave any $ on the table, even if it is only a couple of hundred dollars a month. All I could find for documentation though, after an extensive search, was W-2's. Sent copies of those off last night plus a request to the National Archives for my civilian service record.
Good. Keep pushing. I hate leaving $ on the table also.

Sounds like their record keeping might be a bit sloppy (or, as it predates digital records, the original paper copies (and/or microfiche) are possibly filed (or misfiled) in a big warehouse someplace.)

omni
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