Can Returning to Federal Work Boost Your Annuity?

If you’re a federal retiree considering a return to government service, it’s worth knowing that reemployment can enhance your retirement benefits—if done under the right conditions.

Understanding Reemployment and Your Annuity

Federal retirees may return to work, but what happens to your annuity and salary depends on several factors:

• Type of retirement (voluntary or involuntary)
• Retirement system you are under (FERS or CSRS)
• Nature of your reemployment (permanent, temporary, full-time, part-time)
• Whether you’re covered by a waiver that allows you to receive full pay and your full annuity (rare and typically agency-specific)

In most cases, you do not receive both your annuity and your full salary. Typically, your salary is reduced by the amount of your annuity. If you work part-time, the offset is prorated.

Voluntary vs. Involuntary Retirement

• Voluntary retirees (those who chose to retire once eligible) generally continue receiving their annuity during reemployment, but again, with salary offset unless an exception applies.
• Involuntary retirees (such as from a Reduction in Force) will see their annuity suspended if rehired into a permanent federal position. In this case, you are treated like a new federal employee, earning leave and benefits like your peers.

When you leave again, your original annuity is reinstated unless you’re eligible for a new, potentially higher, annuity based on your additional service.

Supplemental vs. Redetermined Annuities

If you are reemployed full time for a certain period, you may be eligible for increased annuity benefits:

1 Supplemental Annuity:

• Available after at least 1 year of full-time reemployment.
• Adds an additional amount to your existing annuity based on the reemployment period.

2 Redetermined Annuity:

• Available after at least 5 years of reemployment.
• Replaces your original annuity with a new calculation that factors in both your prior service and reemployment service, using your highest salary as the base—regardless of when it was earned.

This can significantly increase your annuity if your reemployment included higher pay.

Example: A FERS retiree returns to work for six years in a GS-14 position after previously retiring at GS-12. Their new annuity may be recalculated using the GS-14 salary, increasing the monthly benefit.

Contributions and Retirement Coverage

To receive a supplemental or redetermined annuity, you must make retirement contributions during reemployment:

• FERS employees: Contributions are mandatory, deducted automatically from your salary.
• CSRS employees: Contributions are optional during reemployment, but you can choose to make a deposit after separation if you want the service to count toward a supplemental or redetermined annuity.

Note: The retirement contributions are based on your full salary, not the reduced salary after annuity offset.

What About Other Benefits?

Reemployed annuitants may be eligible for federal employee benefits such as:

• Health insurance (FEHB): If you had coverage as a retiree, it usually continues. However, if your annuity is suspended, you may qualify for FEHB as an active employee again.
• Life insurance (FEGLI): You may gain additional coverage, or your coverage may change based on your new position.
• TSP Contributions: Reemployed annuitants under FERS can contribute to the Thrift Savings Plan, and if covered, may receive agency matching contributions.

Final Considerations

Reemployment can be a strategic way to:

• Increase your retirement income
• Boost your high-3 average salary for annuity calculations
• Qualify for additional benefits

However, rules are complex, and exceptions do apply—particularly for special categories like law enforcement officers, firefighters, and air traffic controllers. Always consult with your agency’s human resources office or a retirement benefits specialist before accepting reemployment.

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See also,

Legal: How to Challenge a Federal Reduction in Force (RIF) in 2025

The Best Ages for Federal Employees to Retire

Alternative Federal Retirement Options; With Chart

Primer: Early out, buyout, reduction in force (RIF)

Retention Standing, ‘Bump and Retreat’ and More: Report Outlines RIF Process