Many federal workers don’t fully understand what the FERS Special Retirement Supplement (SRS) is all about. The short answer: if you qualify for an immediate FERS annuity and retire before you reach age 62, the FERS SRS fills the income gap between your retirement and age 62. Why? Because 62 is the age when you first become eligible for Social Security. Before you decide, it’s important to get the facts.
How The FERS SRS Works
Let’s say you retire with an immediate annuity at age 60 with 20 years of service. Though you’ve earned Social Security benefits as a FERS participant, the earliest you can file for this benefit is at age 62. In this scenario, at age 60, you would be eligible to receive the FERS SRS for the next two years. Basically, the FERS SRS is calculated as if you retired at age 62 and immediately filed for your Social Security benefit.
“Add to this, the FERS SRS is not eligible for Cost of Living Adjustments (COLAs).”
How The OPM Calculates Your FERS SRS
The OPM estimates what your Social Security benefit would be based on your Full Retirement Age (FRA) under Social Security rules. Then they calculate the amount of your service under FERS and reduce the estimated full-career Social Security benefit accordingly. However, it doesn’t include years of active duty in the armed forces even if you’ve paid a deposit to get credit. Keep in mind, even though the FERS Supplement is paid to you through the OPM, the amount you receive is subject to a Social Security Earnings Test if you’re collecting your benefit and still working. Add to this, the FERS SRS is not eligible for Cost of Living Adjustments (COLAs).
Who’s Eligible & Who’s Not?
The FERS Retiree Supplement is only available for FERS participants who retire before age 62 with an immediate annuity. To be eligible for an immediate FERS annuity, you must meet your Minimum Age Requirement (MRA) and have 30 years of creditable service or 20 years of creditable service at age 60. You’re not eligible for the SRS if you’re a disability retiree, retiring under the MRA+10 rules, or retiring with a deferred FERS annuity.
What Happens When You Turn Age 62?
At age 62, your FERS Supplement stops. At this point, you can file for Social Security and receive a reduced benefit. Or, you can wait until your Full Retirement Age (based on your birth year) to get 100% of your earned benefit. Then again, you may want to delay filing for Social Security until age 70 to maximize your monthly check.
To learn more, touch base with an FRC® trained advisor.
