For many federal employees, the idea of retiring earlier and receiving the FERS Supplement is incredibly attractive. It’s essentially an extra check, similar to Social Security, that you can collect during your early retirement years. Image: J.J. Gouin/Shutterstock.com
By: Dallen HawsFor federal employees planning retirement under the Federal Employees Retirement System (FERS), one of the most discussed—and misunderstood—topics is the FERS Supplement. It’s often seen as a tempting reason to retire early, but the question remains: Is getting the FERS Supplement really better than simply working longer?
Like most federal retirement decisions, the answer is: it depends.
Over the years, we’ve worked with thousands of federal employees, each with unique financial needs, personal goals, and retirement timelines. While the FERS Supplement can be a valuable benefit, it’s not always the best route—and certainly not a one-size-fits-all solution
What Is the FERS Supplement?
The FERS Supplement is a temporary payment designed to help bridge the gap between your retirement date and age 62, when you’re first eligible to claim Social Security. It’s available to regular FERS employees who retire:
● At their Minimum Retirement Age (MRA) with 30 years of service, or
● At age 60 with at least 20 years of service.
*To see how the FERS supplement works for special provisions: Check out this article
It’s calculated based on the number of years you worked in federal service and your estimated Social Security benefit at age 62. For example, if your age-62 Social Security benefit is $2,000/month and you have 20 years of service, your FERS Supplement would be roughly:
(20 ÷ 40) × $2,000 = $1,000/month
This supplement ends at age 62, regardless of when you actually claim Social Security.
Why the FERS Supplement Is So Appealing
For many federal employees, the idea of retiring earlier and receiving the FERS Supplement is incredibly attractive. It’s essentially an extra check, similar to Social Security, that you can collect during your early retirement years.
It also provides a safety net for those who don’t want to touch their TSP or other savings right away. And for people who’ve put in decades of service, the emotional appeal of “finally retiring” and getting rewarded with an additional monthly payment is very real.
But Working Longer Has Its Own Rewards
While the FERS Supplement is a compelling benefit, working longer has powerful financial advantages that can outweigh it—especially over the long term.
When you continue working past your minimum eligibility, a few things happen:
1. Your pension gets larger.
Every additional year of service adds to your pension calculation. If you’re making more money near the end of your career, those years also contribute to a higher high-3 average salary.
2. Your TSP balance grows.
Not only are you contributing more to your TSP (with matching if you’re still under the FERS basic plan), but your existing balance also has more time to grow.
3. You delay drawing down retirement savings.
The longer you wait to start tapping into your retirement funds, the longer those funds can last. Working longer often allows people to defer taking Social Security or TSP withdrawals, increasing their value over time.
4. You Might Qualify for the 10% FERS Pension Bonus:
If you retire at age 62 or later with at least 20 years of service, your pension multiplier jumps from 1.0% to 1.1%. For more information on this, check out this video.
Possible Elimination of the FERS Supplement
Adding a new twist to this conversation are efforts in Congress to eliminate the FERS Supplement for new retirees starting in 2028.
Such a proposal has been pared from this year’s large tax and spending (“Big Beautiful”) bill after extensive debate – but it came very close to passing and is sure to come up again. This would be a major shift in retirement planning for federal employees. Anyone retiring after January 1, 2028, would no longer have been eligible for the supplement—even if they would’ve qualified under the current rules.
For employees close to retirement age, this change raises critical questions:
● Should you consider retiring before 2028 to lock in the supplement?
● Will your retirement plan still work without that extra bridge income?
● How will this affect your drawdown strategy for your TSP and other savings?
These are not easy questions—but they must be answered with care and clarity.
Conclusion: It’s Not Just About a Benefit—It’s About a Plan
In a vacuum, the FERS Supplement might seem like a great deal. And for some, it is. But making your retirement decision based on a single benefit—especially one that’s temporary and potentially going away in a few years—is risky.
Instead of asking, “Is it better to get the FERS Supplement or work longer?”, ask yourself:
● What’s my long-term income plan?
● What matters more to me: retiring sooner or having more later?
● Am I emotionally and financially ready to stop working?
The FERS Supplement can be helpful—but working longer often provides stronger long-term financial security. At the end of the day, the “right” choice is the one that aligns with your goals, your numbers, and your peace of mind.
Don’t hesitate to reach out to a professional that can help—because you only retire once. You owe it to yourself to ensure your decision is the right one for your future.
Dallen Haws is a Financial Advisor who is dedicated to helping federal employees live their best life and plan an incredible retirement. He hosts a podcast and YouTube channel all about federal benefits and retirement. You can learn more about him at Haws Federal Advisors.
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See also
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