Retirement & Financial Planning Report

If you are approved for phased retirement, you’ll continue working at half-time for a period—typically one year; sometimes less, rarely more—and meanwhile you’ll receive 50 percent of the annuity you would have received if you had simply retired.

While the salary part is fairly straight-forward, the retirement part has numerous complications that you should understand going in.


If you owe any deposits or redeposits to get service credit, including for active duty service in the armed forces, you’ll have to pay up before the period of phased retirement begins to get that service credit. Note: If don’t make the deposit and you were to die while in phased retirement, your survivors could make a deposit or redeposit in order to capture that time for a survivor benefit.

While you are on phased retirement, your enrollment in the Federal Employees Health Benefits and Federal Employees’ Group Life Insurance programs will stay with your agency. You will be allowed to continue paying FEHB premiums on a pre-tax basis, which is allowed for employees but not retirees. Your FEGLI coverage will be based on the full-time salary of your position.

When you retire from your period of phased retirement, you’ll receive a “composite retirement annuity.” That is calculated as “the amount of phased retirement annuity as of the commencing date of full retirement, plus one-half of the amount of annuity that would have been payable at the time of full retirement if the individual had not elected phased retirement and as if the individual was employed on a full-time basis in the position occupied during the phased retirement period.”

When you fully retire, your FEHB and FEGLI enrollments will transfer from your agency to OPM as they do on a regular retirement. That’s assuming that you’ve met the participation requirements to do that. As a rule this means that you must have been continuously enrolled for the five consecutive years before you retire.

Report: Phased Retirement for Federal Employees

FERS Retirement Guide 2020