If you don’t intend to return to government service, you could take a refund of your retirement deductions.
By: FEDweek StaffUpdated: You need five years of service to be vested in the retirement system; only after you are vested in the retirement system will you be eligible for an annuity under any circumstances.
That means five years of actual service. Other employment – even active duty service in the armed forces– doesn’t count toward that threshold. Once you meet the five-year requirement, military service can count under certain circumstances if you make a required deposit. So does unused sick leave. But not private sector employment.
Under FERS:
If you have at least five years of service but fewer than 10 when you leave government, you can retire at age 62.
If you have at least 10 years, you could retire at your MRA (minimum retirement age, which ranges between 55 and 57 depending on your year of birth—currently 56). However, your annuity would be reduced by 5 percent forevery year you were under age 62. You could reduce or eliminate that penalty by postponing the receipt of your annuity to a later date.
If you have at least 20 years, you could retire on a penalty-free annuity at age 60.
If you have at least 30 years, you could retire at your MRA.
Under CSRS:
If you have at least five years of service but fewer than 20 when you leave government, you can apply for retirement at age 62.
If you have at least 20 years, you could retire at age 62.
If you have at least 30 years, you could retire at age 55.
What happens if you leave government before hitting that five years and you won’t have any title to an annuity?
If you don’t intend to return to government service, you could take a refund of your retirement deductions. However, if you know you’ll be coming back (or are undecided), it makes sense to leave your retirement deductions in the fund.
If you do later come back, you would have to redeposit the money, plus accrued interest, to get credit for that time.
If you just want to put in your five years and then leave government, you can leave your contributions in the retirement fund and apply for a deferred annuity at age 62. That annuity would be based on the average of your highest three consecutive years of Basic pay on the day you left government. It wouldn’t reflect any pay increases that occurred after you left.
As you can see, you have options. Once you are vested in the retirement system, you can go for a full career and a full retirement benefit. Or you can leave government, not ask for a refund of your retirement contributions, and apply for a deferred annuity.
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See also
Attorney Schnitzer: How to Challenge a Federal Reduction in Force (RIF) in 2025
Alternative Federal Retirement Options; With Chart
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