Retirement & Financial Planning Report

Under FERS, you can retire on an immediate, unreduced annuity if you meet one of the following age and service requirements: age 62 with 5 years of service, 60 with 20, or your minimum retirement age (MRA) and 30. MRAs range from 55 to 57, depending on your year of birth. If you were born before 1948, your MRA is 55. The MRA gradually increases from 55 in 1948 to 57 for those who were born in 1970 or later.

You can also retire at your MRA with at least 10 but fewer than 30 years of service. However, your FERS benefit will be reduced by 5 percent for each year (5/12 percent per month) you are under age 62. You can postpone or eliminate that penalty by delaying the receipt of your annuity to a later date.


You may also be able to retire earlier than expected if you are faced by a reduction-in-force, reorganization or transfer of function. Or if your agency offers you an opportunity to retire under the Voluntary Early Retirement Authority (VERA). If they do, the age and service requirements are lowered. You can retire as early as 50 with 20 years of service or, if you have 25 years of service, at any age. In addition, the 5 percent per year penalty for being under age 62 would be waived.

FERS annuity calculations are based on a simple formula that allows you to estimate what your retirement benefit will be. The nearer you are to retirement, the more accurate your estimate will be. All you need to know to run the calculation is the formula:

.01 x your high-3 x your years and full months of service
(Note: If you are age 62 or older and have at least 20 years of creditable service, multiply your high-3 by .011.)

The product of this formula is your basic annuity. In addition, if you are under age 62 when you retire, you’ll be entitled to a special retirement supplement that approximates the Social Security benefit you earned while a FERS employee. To receive the SRS, you must retire at your MRA with 30 years of service, at age 60 with 20 years, or when approved for an early retirement. In the latter case, the SRS begins when you reach your MRA.

Figuring out the Social Security component is much more complex; your best solution is to get an annuity estimate every year for at least several years before you retire, to give you time to make sure their records of your work and earnings history are correct. You can sign up for an account at allowing you to get a projection at any time (SSA no longer automatically mails them annually, but rather only every five years).

Finally, most FERS retirees aren’t entitled to receive cost-of-living adjustments (COLAs) on their annuities until age 62. And the SRS is never increased by COLAs because it ends at age 62. However, there are exceptions to the rule: COLAs are added to both the annuities and SRSs of military reserve technicians, law enforcement officers, firefighters and air traffic controllers.

When a COLA is payable under FERS, a full adjustment is paid if the consumer price index figure is 2 percent or below. If it is between 2 and 3 percent, a 2 percent COLA is paid, and if it is above 3 percent, the COLA is the CPI figure minus 1 percentage point.