With a choice of FERS retirement options, it’s important to understand the ins and outs to determine which one is right for you.
It Starts With Your MRA For Unreduced Benefits
For FERS participants, the Minimum Retirement Age (MRA) for unreduced benefits ranges from 55 to 57 depending on the year you were born. For example, if you were born before 1948 your MRA is 55 but if you were born in 1948 your MRA is 55 and 2 months. You can check your MRA here.
Next, You Must Meet Creditable Years-Of-Service Requirements
Creditable Service is the number of years your pay is subject to deductions for your FERS retirement. Unused sick leave can increase your total creditable service when computing the amount of your monthly annuity. However, unused sick leave does not count towards the years required for you to be eligible to retire.
Immediate Voluntary FERS Retirement
To retire with a full (unreduced) immediate annuity, you have to meet one of the following requirements for years of service:
- Your MRA with 30 years of creditable service
- At least age 60 with 20 years of creditable service
- At least age 62 with 5 years of creditable service
“The postponed retirement option makes sense for those who want to work in the private sector after separating from federal service.”
FERS MRA+10 Retirement
If you retire under the FERS MRA+10 and start receiving your pension immediately, your benefit will be reduced for each month you’re under age 62. This reduction equals 5% per year (or 5/12 of one percent per month). Fortunately, you can mitigate the reduction with the Postponed Retirement Option. Under this MRA+10 provision, you can maximize your annuity (pension) payments by postponing your monthly benefit until you reach the age you would have been eligible for your full benefit. The postponed retirement option makes sense for those who want to work in the private sector after separating from federal service.
Voluntary Early Retirement Authority (VERA)
Also known as an “early out” VERA enables an agency to increase the number of their employees who are eligible to retire by temporarily lowering the age and service requirements for an immediate, unreduced annuity. Your agency must apply and be approved by the OPM before offering a VERA for your position. Add to this, you must meet the eligibility requirements: at least 20 years of service and be at least age 50 or have at least 25 years of service at any age.
To learn more about choosing the right FERS retirement for your financial situation connect with an FRC® trained advisor.
