If you leave federal employment without eligibility for an immediate annuity, don’t take a refund of your retirement contributions, and have a minimum of five years of creditable service under either CSRS or FERS, you can apply for a deferred annuity at age 62 (60 if you have at least 20 years of service). If you are a FERS employee with at least 10 years of service, you can apply for one when you reach your minimum retirement age. However, under the MRA+10 provision, your annuity would be cut by 5 percent for every year you were under age 62, unless you delay the receipt of your annuity to a later date to reduce or eliminate the age penalty.

How big your annuity would be depends on your total years of service and your highest three consecutive years of average basic pay, your “high-3”. And, when you apply for a deferred annuity, you can elect a survivor benefit for your spouse.

Of course, there are a few downsides to leaving your money in the retirement fund and waiting to apply for a deferred annuity. While the same formulas are used to compute regular and deferred annuities, the high-3 used in the latter will be the one you had when you left government. It won’t be increased by any active employee pay raises or retirement cost-of-living-adjustments (COLAs) that occurred after you left. Therefore, the greater the time between when you leave and when you are eligible for a deferred annuity, the more inflation will have taken its toll on your benefit.

Also, any unused sick leave hours you had to your credit on the day you left won’t be added to your years of service when your deferred annuity is computed, unlike the crediting granted for those retiring on an immediate annuity. And, finally, you won’t be able to reenroll in either the Federal Employees Health Benefits or the Federal Employees’ Life Insurance programs.

If you choose to go the deferred annuity route, when you reach the right age to receive an annuity as noted above, download OPM Form 1496A (CSRS) or RI 92-19 (FERS) at www.opm.gov/forms. Mail the completed form to OPM no earlier than two months before. Your deferred annuity will begin on your birthday. If you apply at a later date, your annuity will be paid retroactively to the date on which your annuity should have begun.