The supplement earnings trap
Earn too much, give some back.
Your pension is safe. The test only touches the supplement — never your basic FERS annuity.
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1. What counts as earnings
| Counts | Doesn’t count |
|---|---|
| Wages from a job, including a federal job as a reemployed annuitant | Your FERS annuity |
| Net self-employment income, such as consulting | TSP withdrawals |
| Deferred pay you earned after retiring | Interest, dividends, rental income, other pensions |
Only earnings after you retire and after you reach your minimum retirement age count. The limit is the same one Social Security uses for early claimers, and it rises most years.
2. Who it hits
- Regular FERS retirees under 62 drawing the supplement who take a job or consult.
- Not special-provision retirees — yet. Law enforcement officers, firefighters and air traffic controllers are exempt until they reach the regular FERS minimum retirement age. See special-provision retirement.
- Not MRA+10 retirees, who don’t receive a supplement at all.
3. Calculate your clawback
Not sure what your supplement will be? It’s estimated from your Social Security record — see the FERS supplement explained.
4. The July timing trap
The test looks backward. Earnings from one calendar year reduce your supplement from the following July 1. So a retiree who works through December and then quits can still see a smaller supplement the next summer.
Each year OPM mails form RI 92-22 asking what you earned. Ignoring it can stop your supplement entirely, and under-reporting creates an overpayment you’ll repay. See the RI 92-22 earnings survey.
- Time a new job: starting in a new year resets the count.
- Stay under the limit with part-time work until 62, when the supplement ends anyway.
- Count the net: a big job can still be worth it even after the supplement is gone.
5. Frequently asked questions
How does the FERS supplement earnings test work?
Once you reach your minimum retirement age, OPM reduces your FERS supplement by $1 for every $2 of earned income above the Social Security annual exempt amount. The reduction is based on the prior year’s earnings and takes effect the following July 1.
What income counts toward the FERS supplement earnings test?
Only wages and net self-employment income earned after you retire and after you reach your minimum retirement age. Your FERS annuity, TSP withdrawals, investment income, rental income and pensions do not count.
Who is exempt from the FERS supplement earnings test?
Retirees under special provisions, such as law enforcement officers, firefighters and air traffic controllers, are exempt until they reach the regular FERS minimum retirement age. After that, the test applies to them like everyone else.
How does OPM know what I earned?
OPM mails the Annuity Supplement Earnings Report, form RI 92-22, each year to retirees who may be affected. You must return it with your prior-year earnings; not returning it can stop your supplement.