FERS Retirement Annuity Supplement: 2024 Earnings Limit and Reduction Rules
According to My Federal Retirement, the Federal Employees Retirement System (FERS) offers a Retirement Annuity Supplement (RAS) for federal employees who retire before age 62. This supplement is meant to provide income until they can receive Social Security benefits. However, if retirees earn more than a certain amount from work after they retire, their RAS may be reduced or even stopped. This “earnings test” applies to money earned from a job or self-employment, but not from investments or other retirement income.
In 2024, retirees can earn up to $22,320 annually without affecting their Retirement Annuity Supplement (RAS). Earnings above this limit reduce the RAS by $1 for every $2 earned. This reduction only impacts the RAS, not the main FERS annuity, and applies to the following year. Certain employees, like law enforcement officers and firefighters, aren’t affected until they reach their Minimum Retirement Age (MRA).
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2024 FERS Retirement Annuity Supplement: $22,320 Exempt Amount, Earnings Test, and Social Security Benefits (PHOTO: PlanWell Financial Planning)
FERS Retirees: Reporting Earnings to OPM and Timing Social Security for Maximum Benefits
FERS retirees who get the Retirement Annuity Supplement need to report their earnings to the Office of Personnel Management (OPM). This supplement stops when they turn 62, at which point they can begin Social Security benefits. However, if they start Social Security at 62, their monthly benefit could be cut by up to 30%. To avoid this reduction, it’s better to wait until reaching Full Retirement Age (FRA) before applying.
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