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When can I Retire

FERS Elgibility : "When Am I Eligible to Retire?"

A question often asked by many, do you know the answer? if you guess or you accurate when guessing you need to know for certain, just like you know how much money is going to deposited in your checking account on pay day!

You must meet certain eligibility requirements to obtain a FERS retirement, remember the aforementioned question WHEN AM I ELIGIBLE TO RETIRE So,

Your eligibility for retirement under FERS involves...

Your Age (at retirement)

Your Years in Service

What Type of Retirement You Choose

What age? And how much creditable service?

That depends on the type of retirement rules you go out under. There are several different types of FERS Retirement, each with their own requirements of age and years in service.

What’s Your Minimum Retirement Age?

Several types of retirement under FERS involve reaching your “MRA” or Minimum Retirement Age.

Your MRA depends what year you were born in.

Year you were born......Your MRA is

  • Born Before 1948.......55
  • Born in 1948.............55 and 2 months
  • Born in 1949.............55 and 4 months
  • Born in 1950.............55 and 6 months
  • Born in 1951.............55 and 8 months
  • Born in 1952.............55 and 10 months
  • Born in 1953-1964.....56
  • Born in 1965.............56 and 2 months
  • Born in 1966.............56 and 4 months
  • Born in 1967.............56 and 6 months
  • Born in 1968.............56 and 8 months
  • Born in 1969.............56 and 10 months
  • Born in 1970.............57
  • Born after 1970.........57

While MRA is important to know - some rules for retirement do reference a specific age, ex: age 60 or 62. It’s just helpful to know what your MRA while we review the different types of retirement rules.

FERS Retirement Rules

Here are the most common types of retirement for the Federal Employee Retirement System (FERS):

Immediate Voluntary FERS Retirement

You might also call this regular FERS Retirement. OPM just calls this ‘voluntary’ retirement. We’re using the term immediate here to distinguish this type of voluntary retirement from postponed retirement and deferred retirement. If you qualify for immediate retirement, you’re eligible to receive your pension within 30 days (although odds are it will take months - so be prepared).

With Immediate Voluntary Retirement, you must at least...

Be your MRA with 30 years of service (MRA+30) ...or...

Be at least 60 with 20 years of service (60+20) ...or...

Be at least 62 with 5 years of service (62+5)

These are just minimums - so you could retire at MRA with 32 years of service or age 61 with 22 years of service, etc.

Immediate Voluntary FERS Retirement w/10% Bonus

If you retire at age 62 with 20 or more years of service, your pension will be calculated at a higher rate. Under the regular FERS retirement rules - your pension multiplier is 1%. But if you go out at age 62 (or later) with at least 20 years of service, your pension multiplier is 1.1%. That’s a 10% bonus on your pension.(See FERS Pension tab above # 3 pension multiplier for specifics)

FERS MRA+10 Retirement

If you’ve reached your MRA, and have at least 10 years of creditable service, you can retire under MRA+10 rules. Sometimes this is called early retirement - but this is different from an 'early out'. Let's just call it MRA+10 retirement.

With MRA+10, you have the option to go out earlier than regular rules for FERS 'immediate voluntary' retirement. However, your pension will be reduced for every month you retire before age 62. The reduction is 5% per year (or 5/12ths of 1% per month). 

POSTPONED & DEFERRED FERS RETIREMENTS

Another alternative for those who qualify for an MRA+10 retirement, but don’t want to take the reduction in pension is a *Postponed* retirement. This is different from a *Deferred* retirement.

If you are looking to leave federal service before you qualify for a regular immediate retirement - you’ll want to know more about the*BIG* difference between a Postponed and Deferred FERS Retirement.

SOME MAY ASK IS THERE A BIG DIFFERENCE AND DOES IT REALLY MATTER?

A major concern in our society is health insurance , and has been a political "hot potato " to have and not have health insurance is a MAJOR concern. As a federal employee, your health insurance is a "Golden Parachute" in your benefit package. REMEMBER THIS IF YOU DON'T REMEMBER ANYTHING ELSE! Your FEHB in retirement is a GOLDEN PARACHUTE! 

You can only keep FEHB in retirement if you meet certain requirements. And if you do a Deferred Retirement - you can’t keep it at all.

EXAMPLE: DEFERRED AND POSTPONED RETIREMENT ?

Example 1) Tanya Separates Now - Before Eligible for MRA+10 FERS Deferred Retirement

Let's say Tanya separates from service now. She leaves her FERS retirement contributions in the system. Tanya turns 62, she can contact OPM to start pension.

Tanya’s FERS pension would be calculated as:

$100,000 x 9 Years x 1% = $9,000/year or $750/month

When Tanya starts her pension, she will *NOT* be eligible to resume FEHB. 

Example 2) Tanya Works Longer to Qualify for MRA+10... Postponed FERS Retirement

In our first example, Tanya separated from service before she was eligible for any type of immediate retirement.

But she was only a year away from qualifying for a FERS MRA+10 Retirement. Let’s look at what happens when Tanya works one more year.

At the end of that year she has reached her MRA, which for her was 56. No change in her High-3 salary at $100,000 And now she has the required 10 years of creditable service.

Now a "Golden parachute activates " eligibility for an MRA+10 Retirement. She has the option of drawing her pension now - but it will be reduced.

If she takes the immediate MRA+10 pension, her pension would be calculated as:

$100,000 x 10 Years x 1% = $10,000/year or $833/month but this will be reduced.

Tanya is 6 years away from age 62 (62-56 = 6). Tanya’s pension will be reduced by: 6 Years x 5% = 30% Reduction

If Tanya chose to start her pension immediately - she would only receive $833/month less 30% Reduction = $583/month

So Tanya has the choice of starting her pension now. It will be $583/month - but she can resume her FEHB coverage as soon as she starts her FERS pension. She can avoid deduction by postponing her retirement later which can be beneficial to her.

If Tanya waits until she is age 62 to start her pension, she will get the full amount of $833/month.

But I think the biggest benefit here is actually Tanya's ability to keep FEHB in retirement. If Tanya was eligible to keep her FEHB when she separated from service - she can now resume her FEHB coverage when she starts her pension.

Even though there were several years between when she separated from service to when she started her pension... if Tanya was eligible to keep FEHB if she had taken the immediate FERS MRA+10 Retirement she can resume those FEHB benefits now as if nothing had

happened.

Early Voluntary FERS Retirement (Early Out)

If your agency is going through a Reduction in Force (RIF), you may be offered an Early Out Retirement. With this type of FERS retirement - the requirements are lowered to allow people who might not otherwise be eligible to retire to take advantage of an Early out... but you might be subject to a reduction... and you might not be financially prepared to retire.

Involuntary / Discontinued Service Retirement

There are different rules for involuntary retirement depending on the situation. Depending on your situation - and the choices you make - you may or may not be eligible for a pension. And there may also be times (as ironic as this sounds) that you can choose between a voluntary and involuntary retirement. There are so many details and exceptions here - that if this is your situation - you should carefully read and understand Chapter 44 of OPM's CSRS / FERS Handbook. 

FERS Disability Retirement

If you have worked at least 18 months in Federal service and become disabled while working for the Federal Government, you may be able to retire (no matter your age) under a Disability Retirement.

 Which Type of FERS Retirement is Right For You?

It’s worth your while to become familiar with the different types of FERS retirement rules. Especially *before* you retire.You may be eligible for more than one type of retirement - and it’s important to choose the best set of rules for your personal situation.

Or perhaps you’re close to being eligible for a better set of rules - but you won’t know that unless you fully understand all of the choices.

Want to Know More about FERS Retirement Eligibility?

FERS Retirement eligibility rules can be overwhelming - but they're a critical part of your retirement plan.

KEY FACTORS OF CONCERN

1. Desired Retirement Date. This one is pretty straight-forward.

2. Will working another year matter?

3. Eligible for different types of Regular Retirement(MRA+30, 60+20, 62+5) and the Bonus 62+20 Retirement.

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