Expert's View

It’s back to basics, folks. What with legislative changes altering the landscape, you’ve raised a lot of questions about retirement. For example: When am I eligible to retire? How much service do I have? What’s the story with deposits and redeposits? What’s included in basic pay? How is my high-3 calculated? How do I figure out what my annuity will be? And what happens if I want to return to work? Over the next few weeks I’ll try to bring a measure of clarity to each of those topics.

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Let’s start with CSRS, most of whose members are at or rapidly approaching retirement eligibility age.

CSRS or CSRS Offset

If you are like most CSRS employees, you’ll be able to retire when you have the following combination of age and service: 62 with 5, 60 with 20, or 55 with 30. If you are a special category employee, such as a law enforcement officer, firefighter or air traffic controller, you can retire at age 50 with 20 years of service or at any age with 25. The same is true of non-special category employees who take early retirement when offered that option by their agency. However, unlike their special category brethren, who face no age penalty, their annuities will be reduced by 2 percent for every year (1/6 percent per month) that they are under age 55.

FERS or FERS with a CSRS Component

While the eligibility requirements to retire under FERS are similar to CSRS, there are some important differences. Just like CSRS, a FERS employee can retire at age 62 with 5 years of service and age 60 with 20. However, to retire with 30 years of service, you must have reached your minimum retirement age. MRAs range between 55 and 57, depending on your year of birth. You can also retire at your MRA with at least 10 but fewer than 30 years of service. However, you’ll be hit with a 5 percent per year penalty for retiring under the MRA+10 provision (5/6 percent per month). That penalty is applied to every year you are under age 62. To reduce or eliminate the age penalty, you can retire and postpone the receipt of your annuity to a later date.

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The rules for FERS special category employees are the same as CSRS. They can retire at age 50 with 20 years of service or at any age with 25. The same age and service requirements apply to FERS employees who take early retirement. But there’s one important difference from CSRS. If you are covered by FERS and take early retirement, there won’t be any age penalty.

Unused Sick Leave

In case you were wondering, unused sick leave can’t be used to meet the length of service requirement to make you eligible to retire. It can only be added to your length of service after you are eligible to retire. If you are under CSRS, unused sick leave time is fully creditable as additional time served. If you are a FERS employee who retires before January 1, 2014, you’ll generally only be credited with half of your unused sick leave (there are some exceptions involving prior CSRS time or service in certain VA medical occupations). If you retire on or after January 1, 2014, you’ll get full credit. 

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Next up

While I don’t think you’ll have any trouble figuring out you own age, finding out how much service you have (or could have if you do the right thing) is harder. Next week, I’ll begin leading you through the creditable service thicket.