Voluntary retirement and Social Security Disability

Previous | Next
 rated by 0 users
Latest post 02-28-2012 10:44 AM by Immortal. 12 replies.
  • 10-07-2011 11:41 AM

    • Immortal
      Consumer
    • Not Ranked
    • Joined on 08-11-2009
    • NY
    • Posts 61

    Voluntary retirement and Social Security Disability

    I am now receiving a FERS voluntarily early retirement annuity as a LEO including the FERS special supplement. This may be an idiotic question but if I choose not to file for a FERS disability can I apply/receive a Social Security Disability while receiving a voluntary FERS retirement annuity? I understand how SSD impacts on a FERS disability annuity.

  • 10-30-2011 1:43 PM In reply to

    Re: Voluntary retirement and Social Security Disability

    very good question as I need the answer as well.My additional question-Fers is a separate pension plan thru the U.S. Postal Service and we pay into Social Security and quite possibly have paid into ss in previous employment.If you apply for postal disability you receive 60% of your high 3-your ss is reduced by 100% in your first year and a 40%-60% in the second year. Why when they are separate they both cannot be

    collected on? What policy,rule and or law states this?I am 60Yrs and 6mo old am currently using sick leave will use annual leave if necessary in conjunction with short term disability program I have thru Apwu and applicable as long as I am in pay status up to 12 mo.then long term would/could kick in.

    Early out with financial incentives with years would have to recalculate.

    Point is in my case -What is the highest and best plan=1.Early out{to be determined},2. Fers disability with supplement,3. Fers disability and SS disability.joethemailman

     

  • 10-30-2011 1:48 PM In reply to

    • Kivi
      Consumer
    • Top 25 Contributor
    • Joined on 01-01-2005
    • CA
    • Posts 6,027

    Re: Voluntary retirement and Social Security Disability

    Yes is the answer for the first poster.

     

  • 10-30-2011 2:01 PM In reply to

    • Kivi
      Consumer
    • Top 25 Contributor
    • Joined on 01-01-2005
    • CA
    • Posts 6,027

    Re: Voluntary retirement and Social Security Disability

    To the second poster, in FERS, SSA is considered part of your retirement package. Therefore, if you apply and qualify for both FERS disability payments and SSDI, then there is an offset. The offset is to your OPM disability retirement benefit, not to your SSDI.

    For most employees, a FERS disability retirement is paid at a much higher percentage than a regular retirement. That's the basic the reason for the offset.

    In your particular case, however, your FERS disability retirement would be recomputed to a regular retirement at age 62. The years on disability are added to your years of service, but, in your case you are only looking at one, maybe two additional years of service, so that a 1% to 2% increase in your regular retirement annuity at 62. Moreover, if you qualify for a regular retirement under MRA plus 20, then you would not be eligible for a disability retirement under FERS anyway.

    I would run the numbers. It may not pay to file for a disabilty retirement if you would only recieve the higher benefit for one year or so and maybe a slightly enhanced benefit at age 62. If you cannot retire under an MRA plus 20, you probably could still retire under MRA plus 10. There is no FERS supplement in an MRA plus 10, but you would not be eligible for the supplement for that long of a period anyway at your age.

    With SSDI, you are not subject to the early retirement penalty that occurs when you take them at age 62. While SSDI converts to regular SS retirement at age 66, the gross benefit amount does not change. That's likely to be much more beneficial to you in the long run than a 1% increase in your FERS annuity from age 62 forward.

  • 11-01-2011 12:15 AM In reply to

    • Immortal
      Consumer
    • Not Ranked
    • Joined on 08-11-2009
    • NY
    • Posts 61

    Re: Voluntary retirement and Social Security Disability

    Thank you Kivi. In my situation as a FERS voluntary retired annuitant choosing to subsequently file only for SSDI and not FERS Disability how would that impact my current situation. For example I am presently receiving the FERS Annuity Supplement. If my SSDI is approved by SSA what happens to the FERS Annuity Supplement which is approximately half of what I will be earning at age 62? It seems that the offsets are easily explained in a FERS Disability matter but I am confused what would happen in my situation. Thank you.

  • 11-02-2011 3:01 PM In reply to

    • Kivi
      Consumer
    • Top 25 Contributor
    • Joined on 01-01-2005
    • CA
    • Posts 6,027

    Re: Voluntary retirement and Social Security Disability

    From what you are saying, you retired as a LEO based upon your age and years of service.

    You are now filing for SSDI. Insofar as I know, qualifying for SSDI benefits would not have any bearing on your FERS retirement payments, either for the supplement or the regular pension payment, because you are receiving a regular LEO retirement under FERS, not a disability one.

    I am sure that there have been retired LEO's who then went to work in the private sector and subsequently became disabled enough that they qualified for SSDI. Insofar as I know, OPM only cares about SSA payments if they are disability ones AND the retiree is receiving a disability retirement benefit. SSDI payments are not earnings, so even if you are at your MRA, for purposes of the supplement, it should not matter to OPM.

    If anyone knows any differently, hopefully, he or she will speak up.

  • 11-02-2011 9:48 PM In reply to

    • Immortal
      Consumer
    • Not Ranked
    • Joined on 08-11-2009
    • NY
    • Posts 61

    Re: Voluntary retirement and Social Security Disability

    Thanks Kivi. That is correct. I retired as a 6c FERS LEO with 23 years of service under 55 years of age. I have not as of this moment filed the SSDI paperwork as I did not know if there was going to be some type of offset on my FERS pension. Thank you for clearing that up. In addition I plan on filing for a schedule award in the near future based on my injuries I sustained while being employed. Thanks again for your help.

  • 11-03-2011 9:46 AM In reply to

    Re: Voluntary retirement and Social Security Disability

    I asume you have a TSP Account. Since you are over 59.5 years old you may want to include a TSP Annuity in your overall  "number crunching.

  • 11-03-2011 9:58 AM In reply to

    • Immortal
      Consumer
    • Not Ranked
    • Joined on 08-11-2009
    • NY
    • Posts 61

    Re: Voluntary retirement and Social Security Disability

    Thanks RSSMDFEDINIT. I retired this year under 55 years of age so I am unable to withdraw funds from the TSP without the 10% penalty although I am aware I can use the 72T IRA withdrawal methods which I am trying to avoid at this time because of the low interest rates.

  • 02-04-2012 1:26 AM In reply to

    • Indyanna2
      Consumer
    • Not Ranked
    • Joined on 09-30-2011
    • IN
    • Posts 5

    Re: Voluntary retirement and Social Security Disability

    What is the 72T IRA withdrawal process ?

  • 02-05-2012 12:13 PM In reply to

    • Kivi
      Consumer
    • Top 25 Contributor
    • Joined on 01-01-2005
    • CA
    • Posts 6,027

    Re: Voluntary retirement and Social Security Disability

    Immortal, you should know that there are potential offsets to SSDI for workers' compensation payments, including an OWCP scheduled award.

  • 02-05-2012 1:57 PM In reply to

    • msetting
      Consumer
    • Not Ranked
    • Joined on 07-24-2011
    • NY
    • Posts 61

    Re: Voluntary retirement and Social Security Disability

    Indyanna, the 72(t) rule is the section of the IRS code that allow you to make substantially equal periodic withdrawals (no more, no less)  for at least 5 years, or until you reach age 59 and 1/2. The amount is usually based on the account balance and your life expectancy, which is determined by a uniform life table or it can be based on an accepted interest rate.

    This is a method of withdrawal that allows you to avoid early withdrawal tax of 10%, but you must withdraw the amount determined for every qualifying year.  If it's modified in any year, you will be subject to a tax increase that would have been imposed if not for the 72(t) rule, plus interest for the deferral period.

  • 02-28-2012 10:44 AM In reply to

    • Immortal
      Consumer
    • Not Ranked
    • Joined on 08-11-2009
    • NY
    • Posts 61

    Re: Voluntary retirement and Social Security Disability

    Hi Kivi. Sorry for my late response. I am a bit confused with your last post to me. I was looking at your previous 11-02-11 response and I may have misunderstood it. If one retires with a voluntary FERS retirement, and receives a monthly SSDI, then several years down the road receives a Schedule Award there is or may be an offset? I thought under these conditions there would be no offset. I would greatly appreciate a clarification. Thanks.

Page 1 of 1 (13 items) | RSS

My Community

Community Membership New Users: Search Community