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Thinking about going back to work for the government after you retire? Your pension keeps paying, but your new salary usually gets cut by the amount of your annuity. Here's how the offset, waivers, the FERS Supplement and your benefits work before you say yes.
Quick facts: As a reemployed annuitant, your annuity keeps paying, but your salary is cut by the amount of your annuity. Example: a $120,000 salary minus a $45,000 FERS annuity means you're actually paid $75,000 in salary. The 2010 law that let agencies waive the offset (with hour caps) expired 12/31/2024, so today only OPM-approved waivers remain, granted case by case for an emergency hiring need, severe difficulty filling the job, or keeping a key person on a project. They're never automatic, and OPM can say no. Stay long enough and you earn more: 1 year of full-time work earns a supplemental annuity, and 5 years can earn a redetermined annuity. Work done under a waiver doesn't earn extra annuity. Under 62? Your full federal salary counts toward the FERS Supplement earnings test: the 2026 limit is $24,480, and you lose $1 of Supplement for every $2 over it. Your FEHB and retiree FEGLI continue, and TSP eligibility depends on the appointment (ask HR). The contractor route: there's no offset and your pension is paid in full, but the Supplement earnings test and post-employment ethics rules still apply.
Educational only, not tax, investment, or legal advice. Haws Federal Advisors | HawsFederalAdvisors.com
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