If you have CSRS Offset coverage, the regular CSRS rules described in the CSRS Eligibility Section about when you can receive retirement benefits, how the benefit is computed, and cost-of-living adjustments apply to you. Also, the rules for participating in the Thrift Savings Plan are the same for both CSRS and CSRS Offset employees.
What is different for CSRS Offset employees is the fact that you are paying Social Security taxes and earning a Social Security benefit at the same time that you are paying CSRS deductions and earning a CSRS annuity. However, instead of paying 6.2% of pay for Social Security plus 7.0% for CSRS, the Social Security tax is subtracted from, or offset, from the 7.0% for CSRS. If your total pay in a year exceeds the maximum amount that is subject to Social Security taxes ($132,900 in 2019), the Social Security deduction stops and your CSRS deduction increases to 7.0% of your basic pay. Thus, you pay the same 7.0% cost for retirement as a CSRS employee, but the amount is divided between CSRS and Social Security.
When you retire, your annuity is computed under the same rules that apply to all CSRS employees. However, when you become eligible for Social Security benefits (normally at age 62), your CSRS benefit is reduced, or offset, by the value of your CSRS Offset service in your Social Security benefit. If you want to estimate the amount of the offset from your future annuity, see these instructions.
Note: If you do not become eligible for any Social Security benefit, there is not an offset.
You receive the value of the CSRS benefit formula and cost-of-living adjustments, but pay a smaller amount for this benefit. You also enjoy the flexibility of having Social Security coverage that continues to build if you leave the Federal Government to work elsewhere.
If you leave the Federal Government before retirement, the same drawbacks that apply to CSRS employees who leave early also apply to you. However, you have paid far less for your benefit and your Social Security benefit is portable.