Retirement The SRS earnings test does not start when you think it starts.

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Every week I post a retirement discussion based on one single retirement/financial decision. You can see my past scenarios HERE.

The SRS earnings test does not start when you think it starts.

I modeled a LEO (also special provisions 6(c) like ATC) this week, call him Carl. He retires this year at 49 with 25 years in, a $148K high-3, and $520K in the TSP. His supplement is $1,337.50 a month until 62. He's weighing a $60K a year consulting offer, and the standard warning came up fast: the earnings test withholds $1 for every $2 over $24,480, so $60K of wages means a $17,760 reduction. That's more than the whole supplement. Sounds like the job wipes it out on day one.

Here's what that warning misses. LEOs, firefighters, and air traffic controllers are exempt from the test until they reach their MRA. Carl's MRA is 57. So from 49 through 56, eight full years, he keeps the entire $16,050 a year supplement AND the paycheck. Nothing withheld.

At 57 the test kicks in, and for him it zeroes the supplement for ages 57 through 61. Totals by 62: $208,650 in supplement if he skips the job, $128,400 if he takes it. His federal benefit checks at 57 run $6,228 a month with the gig versus $7,348 without (the consulting paycheck sits on top of that, of course).

The job still comes out well ahead. But if you're eyeing a second career, the shape of this matters: free years up front, a cliff right at MRA. Worth knowing before you set your hours or your rate.
I ran this in FERS-Ready. Estimates based on current law and the inputs shown, not financial advice. Run your own numbers and confirm with OPM/SSA before making a decision.
Anyone here already past their MRA with a second job? How did the clawback actually land for you?

What scenario should I run next week?
 
Wow. That's great to know. I figured it just started when you retired, be it 50 or 56, or whatever. I guess most people used to go to 56 and it would immediately cancel out if they got another job paying too much. I only ever heard anecdotes from those people. Now that everyone is trying to retire the day they're eligible this is really good news for continuing to work for a while.
 
This is all true. But I believe the earnings test starts at 56. So if you go at 50, you can earn as much as you want til 56. Most likely you will have a greater take home amount than if you stayed. And most likely you would find a gig that has a better schedule with weekends and holidays off and no super early mornings or late nights or mid shifts. Thats my plan personally. Im not sure where life will take me initially, but I wouldnt mind working at my local airport as a ticket agent and see where that takes me. I love to travel so hopefully have some good flight benefits.
 
the inquirer said:
This is all true. But I believe the earnings test starts at 56. So if you go at 50, you can earn as much as you want til 56. Most likely you will have a greater take home amount than if you stayed. And most likely you would find a gig that has a better schedule with weekends and holidays off and no super early mornings or late nights or mid shifts. Thats my plan personally. Im not sure where life will take me initially, but I wouldnt mind working at my local airport as a ticket agent and see where that takes me. I love to travel so hopefully have some good flight benefits.
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What jobs do you think hire people in their 50s with no experience?
 
the inquirer said:
A ticket agent. Work part time and get flight benefits for my family of 5. And if I want, just pick up more shifts from others. A lot more freedom and more take home than working ATC.
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You think you’re getting nights and weekends and holidays off as a brand new ticket agent?
 
32andBelow said:
You think you’re getting nights and weekends and holidays off as a brand new ticket agent?
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Definitely can. My wife has worked as a ticket agent in the past. They bid shift lines as we do. The full timers bid against each other and the part timers bid against each other. A lot of the part timers want weekends because they are working a 9-5 during the week. That’s my experience. Do you have a different personal experience?
 
Teach at an enhanced CTI program, our local one is hiring non-tenure for $75 to $140 per hour depending on experience. Great little part time gig.
 
the inquirer said:
A ticket agent. Work part time and get flight benefits for my family of 5. And if I want, just pick up more shifts from others. A lot more freedom and more take home than working ATC.
Click to expand...
Can be a decent gig. Just a note on the flight benefits/non-revving, it can be really difficult to get on, especially a larger group, as the majority of flights these days are very full. We went thru that, as wifey worked at an airline. Ends up wrecking your whole vacation, so we started to just buy tickets to get on
 
Motodog said:
Can be a decent gig. Just a note on the flight benefits/non-revving, it can be really difficult to get on, especially a larger group, as the majority of flights these days are very full. We went thru that, as wifey worked at an airline. Ends up wrecking your whole vacation, so we started to just buy tickets to get on
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AAL? I know they have an embargo until Aug 15.
 
GulfCharlie said:
AAL? I know they have an embargo until Aug 15.
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No sir, Delta. You can non-rev if you’re very flexible. Easier for 1 or 2 pax. If/when agent finally clears you, bins are full, seats likely not together. We work too hard to tolerate this crap, buy a ticket and walk on
 
Motodog said:
Can be a decent gig. Just a note on the flight benefits/non-revving, it can be really difficult to get on, especially a larger group, as the majority of flights these days are very full. We went thru that, as wifey worked at an airline. Ends up wrecking your whole vacation, so we started to just buy tickets to get on
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100%
When my wife worked for the airline, we didn’t have kids so it wasn’t hard to get on. And if I end up getting a gig like that at 50, my kids will all be adults and can travel on their own so wouldn’t be too much of a problem.
 

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