If you plan on retiring five years from now it’s time ask yourself some questions. Can you meet the age and service requirements for an immediate FERS annuity (pension)? Will you be eligible to continue FEHB into retirement? Last but not least – can you afford to retire in five years? Don’t wait until the last minute to figure out the answers.
Requirements For An Immediate FERS Annuity
To retire with a full (unreduced) immediate FERS annuity you need to meet one of the following age and creditable years-of-service requirements:
- Your Minimum Retirement Age (MRA), based on your birth year, with at least 30 years of service or
- Age 60 with at least 20 years of service or
- Age 62 with at least 5 years of service
Keep in mind that creditable service is any federal pay subject to deductions for your FERS annuity. Note: accrued sick leave or annual leave does not count toward creditable service.
“Start by estimating your net FERS annuity after deductions like tax withholding, FEHB premiums and FEGLI premiums.”
The FEHB 5-Year Eligibility Rule
Since Uncle Sam continues paying the same portion of your FEHB premium after you retire, you don’t want to lose this valuable benefit. To be eligible, you must meet two requirements:
(1) You have to retire on an immediate annuity which begins to accrue no later than one month after the date of your final separation; and
(2) You’ve been continuously enrolled (or covered as a family member) in any FEHB plan (not necessarily the same plan) for the five (5) years of service immediately preceding retirement (or, if less than five years, for all service since your first opportunity to enroll).
Time covered under TRICARE can count as long as you are covered under FEHB when you retire. If you accept an early retirement offer from your agency the 5-Year Rule is waived.
Calculate Your Net Retirement Income
Before you can retire, it’s important to make sure you’ll have enough retirement income to separate from service five years from now. Start by estimating your net FERS annuity after deductions like tax withholding, FEHB premiums and FEGLI premiums.
Next, access your online “my Social Security account” to find the amount of your benefit based on your birth date and earnings record.* Of course, the amount of your monthly TSP distribution is up to you.
Lastly, deduct all your monthly living expenses from your net income. If you end up with a negative gap between your income and expenses, connect with an FRC® trained advisor who can help you work out a solution before it’s too late.
