--- title: "Federal LEO Retirement: Planning Your Second Career Income - Renew Wealth Management" description: Retiring federal LEO? Learn how the FERS supplement earnings test, MRA, TSP and pension income affect your second career, and how it differs from WEP/GPO. author: Joi --- ![](https://renewwealthmgmt.com/component/ajax/?p=cache/63/vitaly-gariev-fn6S0sYwJc8-unsplash-63de54f5.jpg&src=images/blog/10-26/vitaly-gariev-fn6S0sYwJc8-unsplash.jpg&thumbnail=2560,900,&hash=723c5043) # Federal LEO Retirement: Planning Your Second Career Income ## Your Second Career Is a Retirement Income Decision For federal law enforcement officers approaching retirement, planning for your second career should include more than estimating your salary. A new job can change how much of your FERS benefit you actually keep. Most federal LEOs can retire years before their civilian coworkers, often in their early 50s. That leaves a long runway for a second career in private security, corporate investigations, consulting, state or local policing, or teaching. It also means your new paycheck will overlap with the years when the FERS annuity supplement is paid. Your FERS annuity supplement, Minimum Retirement Age (MRA), TSP distributions, pension income and potential investment income all play different roles in your retirement strategy. Understanding which income sources count toward the supplement's earnings test can help you evaluate your options before making a major career decision. This guide explains how each piece fits together, and why the earnings test is a separate rule from the recent repeal of WEP and GPO. ## The Building Blocks of Federal LEO Retirement Income Each income source in your retirement plan follows its own rules. Knowing what each one does makes it easier to see how a second career will affect the whole picture. | Income source | What it is | Key timing | | --- | --- | --- | | FERS basic annuity | Your lifetime pension, calculated under the enhanced LEO formula | Starts at retirement; never reduced by a second-career paycheck | | FERS annuity supplement | A temporary payment that approximates the Social Security you earned in federal service | Paid from retirement until age 62; subject to the earnings test after MRA | | Minimum Retirement Age (MRA) | Age 55 to 57, depending on your birth year | The date the supplement's earnings test starts to apply to special-provision retirees | | TSP distributions | Withdrawals from your Thrift Savings Plan account | Flexible; public safety retirees may avoid the early withdrawal penalty when separating at 50 or later | | Investment income | Interest, dividends, capital gains and rental income from personal savings | Taxable but separate from FERS rules | | Second-career earnings | Wages or self-employment income from a new job or business | The only income type that can reduce your supplement | The supplement is the piece most retirees overlook. It is designed to bridge the gap until you can claim Social Security at 62, and for many LEOs it is worth several hundred to over a thousand dollars a month. ## How the FERS Supplement Earnings Test Works for Law Enforcement Retirees The FERS supplement earnings test reduces your supplement by $1 for every $2 you earn above an annual limit, but federal LEOs get a valuable head start. ### Unlimited earnings before your MRA LEOs, firefighters and air traffic controllers who retire under special provisions can earn as much as they want until they reach their FERS Minimum Retirement Age ([FEDweek](https://www.fedweek.com/ask/federal-retirement/special-retirement-supplement/)). If you retire at 50 and your MRA is 57, that can mean up to seven years of full supplement payments regardless of your new salary. ### What happens after your MRA Once you reach your MRA, the supplement uses the same exempt amount Social Security applies to early claimants. The limit is $24,480 for 2026 and rises to $25,560 for 2027 ([Society of Actuaries](https://www.soa.org/communities/retirement-practice/newsletter-articles/2026/october/2026-10-rp-schobel/)). Only the supplement is reduced; your basic FERS annuity is never affected ([Serving Those Who Serve](https://stwserve.com/fers-special-retirement-provisions-for-leos-atcs-firefighters-part-ii/)). **Example:** Your MRA is 57, your supplement is $1,200 a month and you earn $45,000 in 2026 after reaching your MRA. You are $20,520 over the limit, so your supplement drops by $10,260 a year, or $855 a month. You would keep only $345 a month of the supplement. ### Reporting and timing OPM surveys supplement recipients each year and asks them to report their post-retirement earnings ([Government Executive](https://govexec.com/pay-benefits/2024/11/primer-fers-supplement/400777)). Any reduction is based on the prior year's earnings, so it typically shows up the following year. Failing to report can create an overpayment that OPM will later collect from your annuity. If your earnings drop below the limit in a later year, your full supplement can be restored until it ends at 62. ## Which Income Counts Toward the Earnings Test? Only earned income counts: wages and net self-employment income ([My Federal Retirement](https://www.myfederalretirement.com/?p=45334)). Everything else in your retirement plan can flow in without touching the supplement. | Income source | Counts toward the earnings test? | | --- | --- | | Wages from a new job (private, state or local) | Yes | | Net self-employment or consulting income | Yes | | FERS basic annuity | No | | Other pensions, including military retired pay | No | | TSP withdrawals and annuity payments | No | | IRA and 401(k) distributions | No | | Interest, dividends and capital gains | No | | Rental income (unless you are in the rental business) | No | | A spouse's earnings | No | This distinction gives you room to plan. A retiree who leans on TSP withdrawals and investment income in the years between MRA and 62 can keep the full supplement. A retiree who takes a high-paying job during the same years may see the supplement shrink or disappear, even though total income goes up. If you are self-employed, the timing and structure of your business income matter. Talk with a tax professional before setting up a consulting practice so you understand how your net earnings will be reported. ## FERS Supplement Earnings Test vs. the WEP and GPO Repeal The repeal of WEP and GPO did not change the FERS supplement earnings test. These are separate rules, run by different agencies, with different implications for your retirement income. The Social Security Fairness Act, signed into law on January 5, 2025, repealed the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) ([Washington State LEOFF Plan 2](https://leoff.wa.gov/news/2025/windfall-elimination-provision-wep-and-government-pension-offset-gpo-repealed-social)). Those rules had reduced Social Security benefits for people with pensions from jobs that did not withhold Social Security taxes, such as CSRS federal service and some state and local jobs. FERS retirees were generally not affected, because FERS service is covered by Social Security ([APWU](https://apwu.org/implementation-of-the-social-security-fairness-act-h-r-82/)). |   | FERS supplement earnings test | WEP and GPO | | --- | --- | --- | | Status | Still in effect | Repealed by the Social Security Fairness Act | | Administered by | OPM | Social Security Administration | | What it affects | Your FERS supplement, from MRA to age 62 | Social Security retirement, spousal and survivor benefits | | What triggers it | Wages and self-employment income above the annual limit | A pension from work not covered by Social Security | | Who it mattered for | FERS retirees receiving the supplement, including LEOs after MRA | Mainly CSRS retirees and some state and local employees | ### Why the distinction matters for second-career LEOs The WEP and GPO repeal may matter if your second career is in a state or local agency that does not participate in Social Security and offers its own pension. Under the old rules, that pension could have reduced your future Social Security benefit; under current law, it no longer does. Your wages from that job, however, still count toward the FERS supplement earnings test once you pass your MRA. Some prior CSRS service may also make the repeal relevant to your own Social Security estimate. ## Evaluating a Second-Career Offer: Three Scenarios The right choice depends on how your new paycheck lines up with your MRA. Consider a LEO who retires at 52, has an MRA of 57 and receives a $1,200 monthly supplement ($14,400 a year). | Scenario | Ages 52 to 57 | Ages 57 to 62 | | --- | --- | --- | | A: $90,000 job until 62 | Full supplement, no earnings test | Supplement likely eliminated, since earnings far exceed the limit | | B: $90,000 job until MRA, then part-time work under the limit | Full supplement | Full supplement | | C: Consulting under the limit, with TSP withdrawals filling the gap | Full supplement | Full supplement, with TSP funds covering spending needs | In Scenario A, the retiree could give up roughly $72,000 in supplement payments over five years. That does not make the job a bad choice; a $90,000 salary is still worth far more than the lost supplement. But the true value of the offer is lower than the headline salary suggests, and that should factor into negotiations, timing and savings plans. ### Questions to ask before accepting a job - How many years remain between my retirement date and my MRA? - What will my earnings be in each year after my MRA, and will they exceed the limit? - Could I time a start date, a part-time schedule or a retirement from the new job around my MRA? - Will the new employer offer its own pension, and is that job covered by Social Security? - Can TSP withdrawals or investment income cover some spending so I can earn less in my late 50s? - How will extra income affect my taxes and health insurance costs? A retirement counselor at your agency or a financial planner who specializes in federal benefits can run these numbers using your actual annuity estimate. ## Frequently Asked Questions ### Does the FERS supplement earnings test apply to federal law enforcement officers? Yes, but only after you reach your FERS Minimum Retirement Age. Before your MRA, LEOs retiring under special provisions can earn unlimited income without reducing the supplement. ### Do TSP withdrawals count toward the FERS supplement earnings limit? No. TSP withdrawals, pensions, investment income and other unearned income do not count. Only wages and net self-employment income count. ### Does the earnings test reduce my basic FERS annuity? No. The earnings test affects only the supplement. Your basic annuity continues in full no matter how much you earn. ### Did the repeal of WEP and GPO eliminate the FERS supplement earnings test? No. The Social Security Fairness Act repealed WEP and GPO, which reduced Social Security benefits. It did not change OPM's earnings test for the FERS supplement. ### When does the FERS supplement end? The supplement stops at age 62, when you become eligible to claim Social Security retirement benefits. ## Plan Your Second Career Around Your Full Retirement Picture A second career can add purpose, structure and income to your post-badge years. Just remember that salary is only one part of the equation. Map out when you reach your MRA, which income sources count toward the earnings test and how TSP, pension and investment income can fill gaps. Keep the FERS supplement earnings test separate from the WEP and GPO repeal in your planning, since each affects a different part of your income. Before you accept your next position, request an annuity estimate from your agency, review your TSP withdrawal options and consider meeting with a financial professional who understands federal law enforcement retirement. **Ready to see how a second career fits your retirement?** Don't let a new paycheck quietly cost you thousands in FERS supplement payments. Schedule a free retirement income review with our financial advisors, and we'll map out your MRA, supplement, TSP strategy and second-career earnings so you can make your next move with confidence. [Book your consultation today!](https://calendly.com/jsimon-jhe/complimentary-consultation?month=2026-10) *This article is for general educational purposes and is not financial, tax or legal advice. Confirm your specific benefits with OPM, your agency's retirement office or a qualified advisor.* ## Sources - [FEDweek: Special Retirement Supplement](https://www.fedweek.com/ask/federal-retirement/special-retirement-supplement/) - [Society of Actuaries: Social Security Changes for 2027](https://www.soa.org/communities/retirement-practice/newsletter-articles/2026/october/2026-10-rp-schobel/) - [Serving Those Who Serve: FERS Special Retirement Provisions for LEOs](https://stwserve.com/fers-special-retirement-provisions-for-leos-atcs-firefighters-part-ii/) - [Government Executive: A Primer on the FERS Supplement](https://govexec.com/pay-benefits/2024/11/primer-fers-supplement/400777) - [My Federal Retirement: The FERS Supplement Earnings Test](https://www.myfederalretirement.com/?p=45334) - [Washington State LEOFF Plan 2: WEP and GPO Repealed](https://leoff.wa.gov/news/2025/windfall-elimination-provision-wep-and-government-pension-offset-gpo-repealed-social) - [APWU: Implementation of the Social Security Fairness Act](https://apwu.org/implementation-of-the-social-security-fairness-act-h-r-82/) - Created on 20 October 2026.