Q. My wife is under CSRS Offset. She retired at age 61 and had her CSRS Offset benefit reduced last February when she turned 62; she turns 63 this month (January 2017). She has not applied for Social Security benefits. She is currently working at a job that is covered by Social Security. Her annual salary is $45,000. We don’t need the Social Security component of the CSRS Offset right now, approximately $800 per month.
Is it to her advantage to apply for Social Security benefits now or should she wait until she turns 65? If she applies now, won’t her Social Security component of the CSRS Offset be reduced due to her current wages? If it is to her advantage to wait until 66, will her Social Security component be more than what OPM originally calculated for her retirement amount due to her additional Social Security wages?
A. Her Social Security benefit will be subject to the earned income offset until she reaches her full retirement age. Unless she has a shorter-than-average life expectancy, she should wait to claim until, at least, the earlier of two dates: (1) When she stops working and earning the threshold amount for the earned income offset, or (2) when she reaches her full retirement age.