The decision about when to start Social Security is one of the most critical retirement choices you’ll make. Image: J.J. Gouin/Shutterstock.com
By: Dallen HawsFor most federal employees, Social Security is a significant part of retirement planning, but it isn’t always as straightforward as it might seem. While the basic principles of Social Security are the same for both federal and private-sector workers, there are some key differences and special considerations for federal employees.
This article will walk you through what you need to know about Social Security as a federal worker, including how your benefits are calculated and when you might consider starting them.
Understanding Social Security Eligibility for Federal Employees
Federal employees generally fall into one of two retirement systems: the Federal Employees Retirement System (FERS) or the Civil Service Retirement System (CSRS). This distinction is critical because it directly impacts your Social Security eligibility.
● FERS Employees: If you are a FERS employee, you contribute to Social Security through payroll taxes, just like private-sector workers. This means you will be eligible for Social Security benefits as long as you meet the general qualification requirements, which include earning 40 work credits (typically 10 years of qualifying work).
● CSRS Employees: On the other hand, most CSRS employees do not contribute to Social Security as part of their federal service. Instead, they rely on their CSRS pension. However, if you held other jobs outside of the federal government where you paid Social Security taxes, you might still qualify for some benefits. (Note: the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), were repealed in January 2025 – and previously had reduced Social Security benefits. The SSA has projected that it will finish recalculating benefits and sending back payments in November to those who will benefit from the repeal.)
How Social Security Benefits Are Calculated
Social Security benefits are determined using a formula based on your lifetime earnings. The Social Security Administration (SSA) looks at your highest 35 years of earnings to calculate your average indexed monthly earnings (AIME). If you don’t have 35 years of earnings, some of those years will be counted as zeros, which can significantly reduce your benefit amount.
Timing: When Should You Start Social Security?
The decision about when to start Social Security is one of the most critical retirement choices you’ll make. Here’s a quick overview of the timing options:
● Age 62 (Early Retirement): This is the earliest you can start receiving Social Security benefits. However, starting early comes with a permanent reduction in your monthly payments—typically around 5-6% for each year before your Full Retirement Age (FRA).
● Full Retirement Age (FRA): FRA ranges from 66 to 67, depending on your birth year. If you claim benefits at this age, you’ll receive your full, unreduced Social Security benefit.
● Age 70 (Maximum Benefit Age): Delaying benefits beyond your FRA increases your monthly payment by about 8% per year until age 70. This can result in significantly higher lifetime benefits if you live into your late 80s or beyond.
For example, if your FRA benefit is $3,000 per month, here’s what you might receive depending on when you start benefits:
● At age 62: Approximately $2,100/month
● At age 67: Approximately $3,000/month
● At age 70: Approximately $3,700/month
Special Considerations for Federal Employees
Federal employees should also consider the following factors:
● FERS Supplement: If you are a FERS employee and retire before age 62 with full eligibility, you may qualify for the FERS Retiree Annuity Supplement. This benefit is designed to bridge the income gap until Social Security kicks in at 62.
● Impact of WEP and GPO (CSRS Employees): If you are a CSRS employee with Social Security-covered work outside the federal government, your Social Security benefits may be reduced due to the WEP and GPO rules.
Key Factors to Consider Before Claiming Social Security
● Your Health and Life Expectancy: If you have health issues or a family history of shorter life expectancy, starting benefits earlier might make sense. However, if you are in good health, delaying benefits can provide a more secure retirement.
● Your Spouse’s Situation: If you are married, your decision will impact your spouse’s survivor benefits. Delaying Social Security can provide a higher lifetime benefit for your surviving spouse.
● Other Retirement Income Sources: Consider how your Social Security benefits fit into your overall retirement plan, including your FERS pension, Thrift Savings Plan (TSP), and other savings.
Final Thoughts
There is no one-size-fits-all answer to when you should start Social Security. The right choice depends on your personal circumstances, health, and financial needs. To get a clearer picture of what your benefits might look like, create an account at SSA.gov and review your personalized Social Security statement.
If you still have questions or need help planning your federal retirement, consider speaking with a financial advisor who specializes in federal benefits. Retirement planning is too important to leave to chance, and a little expert guidance can make a big difference in your financial future.
Dallen Haws is a Financial Advisor who is dedicated to helping federal employees live their best life and plan an incredible retirement. He hosts a podcast and YouTube channel all about federal benefits and retirement. You can learn more about him at Haws Federal Advisors.
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