Not every employee sticks around until they are eligible to retire - that doesn’t mean that their retirement benefits are lost. Image: zimmytws/Shutterstock.com
By: Reg JonesI often write about employees who are planning to complete a full career in the federal service. However, some of you will be retiring with relatively few years of federal service. So, let’s look at that situation.
Immediate Retirement Rules
The length of service requirements for those with fewer than 30 years of service – with one exception – are the same for FERS and CSRS. If you have as few as 5 years of service, you can retire on an immediate annuity at age 62. And if you have at least 20 years of service, you can retire at age 60.
Here’s the exception. Under FERS you can retire at your minimum retirement age (MRA) with as few as 10 years of service. MRAs range between 55 for those born before 1948 to 57 for those born in 1970 or after. However, there’s a downside to the MRA+10 provision. If you retire at your MRA with at least 10 but fewer than 30 years of service, your annuity will be reduced by 5 percent for every year (5/12 percent per month) that you are under age 62. However, you can reduce or eliminate the age penalty by postponing the receipt of your annuity to a later date.
Early Retirement Rules
Under both FERS and CSRS, the age and service requirements are reduced if you are eligible for early retirement under either the Voluntary Early Retirement Authorities (VERA) or you receive a buyout offer under the Voluntary Separation Incentives Program (VSIP). If you are offered one of these, you can retire at age 50 with 20 years of service or at any age with at least 25.
Cost-of Living Adjustments
If you are a CSRS retiree, you’ll be eligible to receive annual cost-of-living adjustments (COLAs) regardless of your age at retirement. If you are a FERS retiree, you won’t be eligible to receive a COLA until you reach age 62 (unless you retire under disability or under special provisions for law enforcement, firefighting and air traffic control).
The FERS Special Annuity Supplement
The special retirement supplement (SRS) approximates the Social Security benefit you earned while covered by FERS. As a FERS retiree, you will be eligible to receive it if you retired at age 60 with 20 years of service or if you took early retirement, whether that retirement was voluntary or involuntary. However, if you were an early retiree, your SRS wouldn’t begin until you reached your MRA. Either way, you wouldn’t receive any COLAs on your SRS.
The SRS continues until age 62, when you first become eligible for a Social Security benefit. However, it can be reduced or eliminated earlier than age 62 if you have earnings from wage or self-employment that exceed the annual Social Security exempt amount. In 2025 the exempt amount is $23,400.
Health and Life Insurance
With a few exceptions, the rule for carrying Federal Employees Health Benefits (FEHB) or Federal Employees’ Group Life Insurance (FEGLI) into retirement is the same for FERS and CSRS. You need to have been covered for five full years preceding your retirement or, if you are covered by Tricare or CHAMPVA, be enrolled in the FEHB program when you retire.
If you meet the requirements to carry your FEHB coverage into retirement, retire under the MRA+10 provision, and delay receipt of your annuity to a later date, you may re-enroll in the FEHB program when you begin receiving that annuity. If you don’t meet the requirements to carry your FEHB coverage into retirement, you may qualify for an automatic waiver if you are retiring under one of the early retirement authorities. While individual waivers may be granted by OPM, they rarely are because law authorizing them is extremely limited in its scope.
Note: Under the FEGLI program, there is no waiver provision. The only way to once again be covered by FEGLI is to be reemployed in a position that provides such coverage. The same is true of those who were ineligible to carry there FEHB coverage into retirement.
Deferred Annuities
Not every employee sticks around until they are eligible to retire. Many leave to pursue other interests. That doesn’t mean that their retirement benefits are lost.
If you leave and don’t ask for a refund of your retirement contributions, you will be eligible for a deferred annuity at age 62 with 5 years of service, age 60 with 20, at your MRA with 30 – age 55 for CSRS, 55-57 for FERS, depending on your year of birth), and at your MRA with 10 (but with the same reduced benefits mentioned above).
Note: Deferred retirees can’t reenroll in either the FEHB or FEGLI programs when their annuities begin.
Former head of retirement and insurance policy at the Office of Personnel Management, and longtime FEDweek contributor, Reg Jones is known throughout the federal workforce community as an authority on pay and benefits.
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See also,
Legal: How to Challenge a Federal Reduction in Force (RIF) in 2025
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