The distinction between voluntary and involuntary “discontinued service” or retirement is critical for people who return to the government as reemployed annuitants.
If you have the correct mix of age and service, you can retire on an immediate annuity whenever you want. Typically, you may choose the day you wish to leave, complete the papers, and go when that date arrives. On the other hand, your agency may give you a push in that direction by announcing a restructuring, realignment, or reduction-in-force. It may also give you a buyout as an inducement to depart.
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If you retire willingly and then return to work for the federal government, your annuity’s amount will set off the salary of your new post. In other words, your annuity will continue in most circumstances, but you’ll only get the difference between your annuity and your new pay. For instance, if your annuity is $50,000 and the income of the latest post is $85,000, your new company will only pay you $35,000 per year. However, under some conditions, you might be able to get your entire annuity as well as the total pay for your new post.
On the other hand, if you accept involuntary retirement and subsequently return to work for the federal government, it will result in the termination of your annuity. Moreover, they will pay you the total pay for your new post. Your career will restart, and they will grant you a new retirement right. If you had the requisite age and service when you left to retire on an immediate annuity, you could retire again at any time. But if you quit before being eligible for immediate retirement (for instance, by accepting an “early out”), you wouldn’t be able to retire again until you satisfied the age and service criteria.
Suppose you’re a voluntary retiree who returns to work for the federal government for a minimum of one full year or its part-time equivalent. In that case, you’ll be eligible for a supplemental annuity. However, if you work for a minimum of five years or its part-time equivalent, you’ll be eligible for a re-determined annuity.
A supplementary annuity is just an additional annuity to your existing one. Re-determined annuities are established by recalculating your annuity as if you were retiring for the first time, utilizing your new total years of service and your new high-3, if it’s larger than your prior high-3.
You won’t be eligible for a supplemental or re-determined annuity if you’re reemployed in a position that lets you earn both your full annuity and your total wage. That time of service isn’t counted toward your retirement.
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Bio:
For over 30-years Joe Carreno of The Retirement Advantage has been a Federal Employee Retirement System specialist (FERS) as well as a Florida Retirement System specialist (FRS) independent advocate. An affiliate of PSRE (Public Sector Retirement Educators), a Federal Contractor & Registered Vendor to the Federal Government, also an affiliate of TSP Withdrawal Consultants. We will help you understand your FERS & FRS Benefits, TSP & Florida D.R.O.P. withdrawal options in detail while recognizing & maximizing all concurrent alternatives available.Our primary goal is to guide you into retirement with no regrets; safe, predictable, stable, for life. We look forward to visiting with you.
Disclosure:
Not affiliated with the U.S. Federal Government, the State of Florida, or any government agency. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation. Although we make great efforts to ensure the accuracy of the information contained herein we cannot guarantee all information is correct. Any comments regarding guarantees, safe and secure investments & guaranteed income streams or similar refer only to fixed insurance and annuity products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC insured.
