Quick Decision

You don't have any Social Security credits and don't expect to work long enough to earn a benefit

In general, switching to FERS can be a mistake if you are not able to earn the 10 years or 40 quarters of Social Security coverage that will allow you to receive a Social Security benefit. Here's what could happen:

Example: Say you're close to retiring and you switch to FERS. You've never worked in the private sector, so you've earned no Social Security credits. Six years after switching, you decide to retire.

You will make a mistake by not thinking ahead about how much longer you wanted to work when you switch to FERS. You cannot receive a Social Security benefit unless you've earned the required years of coverage. In most cases, 10 years are required. So, you've lost one of the three parts of your FERS benefit.

Also, if you do not qualify for a benefit, the percentage of salary that you pay in for Social Security taxes is simply lost.

CSRS, then, normally is a better choice if you will not be able to earn enough years of Social Security coverage to qualify for that portion of your FERS benefit. In addition, even if you will qualify for a Social Security benefit, you need to look at the impact on you of the Windfall Elimination Provision.

Exceptions: There are several cases where switching to FERS and not being able to "lock up" your Social Security benefit are not a problem. One is that you're not interested in earning a Social Security benefit because you want to avoid having your spousal Social Security benefit reduced by the Public Pension Offset (also known as the Government Pension Offset).

In addition, if your reason for transferring to FERS is to take advantage of its more flexible rules about when you can receive your benefits, then eligibility for Social Security benefits may not be a concern to you. For example, if you work in an agency that is downsizing, FERS' more flexible rules may be very important to you.

---

To read more about this:

• Social Security