When you work for Uncle Sam you have more than one option for retiring with an immediate FERS annuity (pension). It’s important to know the facts before you make a decision to make sure you receive all the retirement benefits you’ve worked long and hard to receive.
Retire At Your MRA With 30 Years Of Creditable Service
If you retire at your Minimum Retirement Age (MRA) with 30 years of creditable service, you’ll receive your full, unreduced FERS annuity (pension) and you’re also eligible for the FERS Special Retirement Supplement (SRS).
The SRS is paid through the OPM and calculated as if you filed for Social Security at age 62. Once you turn 62, the OPM stops paying your SRS and you have to make a decision on when to file for your Social Security through the Social Security Administration. Keep in mind that the SRS is not eligible for Cost of Living Adjustments (COLAs) because FERS retirees only become eligible for COLAs at age 62.
(NOTE: If you retire at your MRA with less than 30 years of service but more than 10, your FERS annuity will be reduced and you’re not eligible for the FERS SRS.)
“However, when you consider the advantages of retiring at age 62, it may be worth working two years longer.”
Retire At Age 60 With At Least 20 Years Of Creditable Service
If you started your federal career a little later in life, you’re eligible to receive your full, unreduced FERS annuity (pension) plus the FERS SRS as described above. However, when you consider the advantages of retiring at age 62, it may be worth working two years longer.
Retire At Age 62 Or Older With At Least 20 Years Of Creditable Service
If you wait to retire at age 62 or older with a minimum of 20 years of creditable service, you’re eligible to receive the FERS 10% Bonus. For example, if you retired at age 60 with 20 years of service, your FERS annuity (pension) is calculated using the standard 1% formula.
But if you waited two more years to retire at age 62, your monthly pension is calculated with the 1.1% formula. Though the difference might not seem that much at first glance, it works out to a 10% increase in your FERS annuity for the rest of your life.
(NOTE: At age 62 you won’t be eligible for the SRS because you’ve already reached the minimum age for filing for your Social Security benefit.)
Which option is the best retirement age for you? It really comes down to the math. Connect with an FRC® trained advisor who can help you crunch the numbers before you decide.
