What to Know About Retiring Early as a Federal Employee

If you’re a civilian employee working for the Federal Government, you’re most likely familiar with the Federal Employees Retirement System (FERS). Ever since 1987, people’s retirement coverage falls under the FERS.

For those who aren’t well informed, FERS is a retirement plan that offers specific people benefits from three sources—Social Security, Basic Benefit Plan, and Thrift Savings Plan (TSP). If you plan to leave your Federal Government job before your retirement date, you can carry over your Social Security and TSP without issues.

Although you’ve been managing a government pension for some time now, it can still be quite complicated to process everything by yourself, given all the benefits you expect to receive. If you want to have a better grasp of the FERS, keep reading below to learn more about it. 

How the FERS Works

When it comes to the Basic Benefit Plan and Social Security of your FERS retirement, you must strive to fulfill your financial obligations and pay your share during your deadline. Your agency retains the cost of the Basic Benefit and Social Security from your salary. They consider it as a deduction to your payroll while paying for their part at the same time.

Once you plan to retire, you can look forward to acquiring annuity payments every month for as long as you live. Meanwhile, your TSP is a financial account that your agency puts up for you right away. With every pay period they place into your account, the amount equals one percent of the basic salary you acquire during the pay period.

The Federal Retirement Thrift Investment Board regulates TSP. If you wish to add to your TSP account, you are free to add in your money, and your agency will deposit a matching contribution as well. Fortunately, the money in your TSP does not have to deal with tax. 

Types of Early Retirement

Minimum Retirement Age

After working under the Federal Government for some time now, if you have accumulated over ten years of service or more, you can retire at the Minimum Retirement Age (MRA). You don’t have to reach the age of sixty before leaving your position, and you can still expect to receive government benefits that you’ve worked hard to obtain through the years.

Age Reduction

You can also think of retiring under Age Reduction. As part of this kind of retirement, your annuity reduces after every month that you’re under sixty-two years old. Take note that the reduction each year is five percent. 

But if you strive to accomplish a minimum of thirty years of serving the Federal Government, your annuity will not receive a reduction. If you complete at least twenty years of service and your pension starts as soon as you reach sixty, you don’t have to face any reduction for your federal retirement.

How to Know Your MRA

Year of Birth               MRA

Before 1948               55

1948                   55 and 2 months

1949                    55 and 4 months

1950                   55 and 6 months

1951                    55 and 8 months

1952                    55 and 10 months

1953-1964           56

1965                    56 and 2 months

1966                    56 and 4 months

1967                    56 and 6 months

1968                    56 and 8 months

1969                    56 and 10 months

1970 and beyond       57

Conclusion

If you’ve been serving the Federal Government for a good portion of your life and you wish to retire early, you can still expect to receive benefits from your retirement pension plan. You could target the Minimum Requirement Age or seek Age Reduction, both retirement options giving you enough time preparing you for retirement. For best results, you should work with retirement specialists who will guide you through every step of the way and ensure you receive the benefits and finances you deserve for serving the country.

Are you looking for retirement planning for federal employees in the US? My Federal Plan provides free consultation and retirement benefits planning for US Federal employees. Get in touch with us today to book a retirement session!

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