FERS supplement earnings test 2026: how a job after retirement cuts the supplement
Working after you retire does not touch your FERS annuity, but it can shrink or erase the supplement. Enter your monthly supplement and the wages you expect.
Supplement after the 2026 earnings test
$778/mo
$1 withheld for every $2 earned above $24,480.
| Supplement before the test | $17,100 |
| Withheld | -$7,760 |
| Kept | $9,340 |
| Earnings at which it is gone | $58,680 |
Prepared by Radif Partners · How the figures are built · read on opm.gov, ecfr.gov and ssa.gov · not an official determination
Under 5 U.S.C. 8421a, the FERS supplement is reduced by half of your earnings above the Social Security exempt amount, which is $24,480 for 2026. Only wages and net self-employment income count; the annuity, TSP withdrawals, interest and dividends do not. The reduction is based on the previous calendar year: the excess earned in 2026 is spread over the twelve months that begin in July 2027, never more than the supplement itself. With a $1,425 monthly supplement, $17,100 a year, wages of $40,000 cost $7,760, leaving $9,340; at $58,680 of wages nothing is left. Earnings from the part of the year before you retired are not counted. Law enforcement officers, firefighters and air traffic controllers retired under the special provisions are exempt for earnings before their MRA. For 2027, our data does not yet hold the exempt amount: the page will use the 2027 amount, which we will add once SSA confirms it. The basic annuity is never reduced, whatever you earn.
The rule in one sentence
Section 8421a takes the earnings test that Social Security applies to people who claim benefits before full retirement age and applies it to the FERS supplement: for each year, half of your earnings above the exempt amount is withheld from the supplement. The basic annuity is never touched. For 2026 the exempt amount is $24,480, set by SSA's 2026 determinations. The supplement itself, how it is computed and who receives it, is explained on the FERS supplement page.
Test a salary against your supplement
Supplement after the 2026 earnings test
$778/mo
| Supplement before the test | $17,100 |
| Withheld | -$7,760 |
| Kept | $9,340 |
| Earnings at which it is gone | $58,680 |
What counts as earnings
The statute says earnings and the exempt amount are determined as under section 203 of the Social Security Act. That means gross wages for work done during the year, before tax and insurance deductions, plus net earnings from self-employment, which is gross business income minus allowable business expenses, minus any net loss. A consulting business, a contract job with an agency contractor, a part-time position in a store and a seasonal job all count. Income that is not pay for work does not: your FERS annuity, TSP withdrawals, other pensions, interest, dividends and capital gains. A large TSP distribution in the year you leave does not touch the supplement.
Which year counts, and when the cut arrives
The test is backward-looking. The reduction for a year is computed from the earnings of the year before, and it is charged to the twelve months that start on the first day of the seventh month after that year. Earnings of 2026 are therefore charged from July 2027 through June 2028. The yearly excess is divided evenly among the months you are entitled to the supplement in that period, and no month can lose more than its own supplement. The total cut can never be larger than the supplement you were paid for the year of the earnings.
Only earnings for the part of the year when you were entitled to the supplement count. If you retire on June 30, your salary from January to June is not used, even though it is far above $24,480.
Example: a new job the year after you retire
Take a retiree with 30 years of FERS service and a $1,900 Social Security estimate at 62. The supplement is $1,425 a month, $17,100 a year. In 2026 the retiree takes a job paying $40,000. The excess over $24,480 is $15,520; half of it, $7,760, is the reduction. It is spread over July 2027 to June 2028: about $647 less each month, so roughly $778 paid instead of $1,425. The annuity is paid in full.
| Wages in 2026 | Withheld over 12 months | Supplement kept per year | Per month |
|---|---|---|---|
| $0 | $0 | $17,100 | $1,425 |
| $20,000 | $0 | $17,100 | $1,425 |
| $30,000 | $2,760 | $14,340 | $1,195 |
| $40,000 | $7,760 | $9,340 | $778 |
| $50,000 | $12,760 | $4,340 | $362 |
| $60,000 | $17,100 | $0 | $0 |
At $60,000, the cut is $17,100 and the retiree keeps $0 of supplement. The break point where the supplement disappears is $58,680: the exempt amount plus twice the yearly supplement. Anyone planning a second career should compare the new salary with that loss, and with what the job adds to their own future Social Security record, which the supplement does not.
Special provisions: free until the MRA
Retirees under the special provisions for law enforcement officers, firefighters and air traffic controllers can leave at 50 with 20 years, or at any age with 25, and start the supplement at once. For them, the law does not count earnings attributable to a period before the minimum retirement age. An officer born in 1975 who retires at 50 can work full time until the MRA of 57 with no effect on the supplement. Earnings after the MRA count like anyone else's, and the reduction for them follows the usual July timing. See the special provisions page for the rest of their rules, and the MRA table for your own date.
Early outs and the earnings test
Someone who leaves under a voluntary early retirement offer before the MRA receives no supplement until the MRA. Since only earnings for periods of entitlement count, wages before that date play no role. From the MRA on, the normal test applies.
The year you turn 62
The supplement stops at the end of the month before your 62nd birthday. The law shortens the number of entitlement months for that year, so a reduction charged to the last year is spread over fewer months, still capped at each month's supplement. Earnings after the supplement has ended play no part in it. From 62 on, Social Security's own earnings test applies to your Social Security benefit if you claim it before full retirement age; that is a separate rule handled by SSA, not OPM.
2027 and later
The exempt amount usually changes every year, and SSA publishes it with its annual determinations; our data does not yet hold the 2027 amount, so the calculator uses $24,480 for every year until the figure is confirmed. That covers the cut you face in mid 2027: it is based on 2026 earnings and the 2026 exempt amount. Our method page lists the figures used and their dates.