The Mistakes That Could Undercut a LEO’s Early Retirement If Not Caught in Time

Key Takeaways

• Law enforcement officers (LEOs) benefit from enhanced retirement privileges, but the rules are rigid and unforgiving if not followed carefully.

• Missing eligibility deadlines, mismanaging annuity calculations, or overlooking mandatory retirement triggers can cost you thousands in lost benefits.

Understanding LEO Retirement Rules in 2025

If you’re a law enforcement officer under the Federal Employees Retirement System (FERS), your path to retirement looks different from most other government workers. You’re eligible for full retirement after 25 years of service at any age, or after 20 years of service at age 50. This accelerated timeline is a major benefit, but it comes with its own set of rules that must be followed precisely. Any misstep could mean the difference between retiring with your full benefits or facing penalties and delays.

1. Miscounting Creditable Service Years

One of the most common mistakes is assuming all your time in federal service counts toward the 20- or 25-year law enforcement requirement. But only specific service performed in a primary or secondary LEO position qualifies. If you transitioned into law enforcement from another federal role, those earlier years may not count.

Even time spent in training, details, or light duty may not qualify unless it’s clearly coded as LEO time. It’s essential to confirm this with your agency’s HR before planning your retirement timeline.

Tip:

• Request a certified Summary of Federal Service well in advance of your projected retirement date.

• Use SF-50 forms to cross-check your job classifications.

2. Missing the Mandatory Retirement Age Window

In 2025, the mandatory retirement age for most federal law enforcement officers remains 57. If you haven’t met the 20-year minimum by then, you will not be allowed to continue working in a covered position. This cutoff can sneak up on those who started late or spent time in non-LEO positions.

If you’re nearing age 57 and aren’t yet eligible for full LEO retirement, your agency might involuntarily separate you. While some exceptions exist, they are extremely limited and must be formally approved by the Office of Personnel Management (OPM).

3. Overestimating the Special Retirement Supplement

The FERS Special Retirement Supplement (SRS) is designed to bridge the gap between your early retirement and your Social Security eligibility at age 62. But many officers assume the amount will equal what they’d receive from Social Security at 62. It won’t.

The supplement is based only on your civilian earnings under FERS. It excludes military time, and it ends at age 62 regardless of whether you claim Social Security then. Additionally, if you earn income from a post-retirement job, the SRS is subject to the same earnings test as Social Security. Exceed the limit (currently $23,480 in 2025), and your supplement is reduced or eliminated.

4. Assuming the COLA Kicks In Immediately

One major difference between LEO and regular FERS retirement is the Cost-of-Living Adjustment (COLA) timeline. While most FERS retirees must wait until age 62 to receive COLAs, LEOs are an exception.

However, many officers mistakenly believe their annuity will increase every year automatically. In truth, you must retire under a qualifying LEO provision to get immediate COLAs. If you switch to a non-LEO position before retirement, even temporarily, you may lose this benefit. In 2025, the COLA for retirees is 2.5%, which applies only if you qualify.

5. Forgetting About High-3 Salary Limits

Your FERS pension is calculated based on your “high-3” average salary, multiplied by 1.7% for the first 20 years and 1% thereafter. For LEOs, this formula is generous—but only if you retire from a covered position.

The trap here lies in assuming that any three highest earning years qualify. The truth is that only the salary from LEO-designated positions will benefit from the 1.7% multiplier for the first 20 years. If your high-3 years include time from a non-LEO role, your annuity will be smaller than expected.

To avoid a surprise reduction:

• Ensure your highest earning years align with your LEO service.

• Avoid switching out of covered positions in your final years unless absolutely necessary.

6. Delaying the Military Buyback Process

Military veterans often bring years of prior service into their federal career. Under FERS, you can buy back your active-duty military time to count toward retirement. For LEOs, that time can only count if it doesn’t interfere with the 20 years of actual LEO service needed to trigger early retirement eligibility.

In 2025, the military service deposit rate is still based on 3% of your military base pay, and interest starts accruing after three years of civilian service if not paid in full. Missing the buyback window or delaying payment will increase your out-of-pocket cost and delay retirement eligibility.

Confirm with your agency whether the military time counts toward retirement eligibility or just computation.

7. Misunderstanding Sick Leave Credit

Sick leave can enhance your retirement annuity, but only after you meet the eligibility threshold. If you plan to use sick leave to hit the 20- or 25-year mark, you’re in for a shock. Sick leave cannot be used to meet the minimum service requirement for LEO retirement.

Instead, it adds to your total creditable service after you’ve already qualified. For example, if you have 20 years of LEO service and six months of unused sick leave, your annuity will be calculated as if you had 20.5 years—but only after the 20-year threshold is met.

8. Not Planning for Post-Retirement Healthcare

Retiring early doesn’t mean you’re automatically eligible for Medicare. In 2025, Medicare eligibility begins at age 65. That leaves a gap of up to 15 years between early retirement and Medicare.

If you’re not enrolled in the Federal Employees Health Benefits (FEHB) Program for at least 5 years before retirement, you may lose eligibility to carry it into retirement. LEOs who retire early and don’t plan for this healthcare gap can face thousands in out-of-pocket premiums or find themselves uninsured.

To preserve FEHB:

• Stay enrolled for 5 consecutive years before retirement.

• Choose a plan that allows continuation into retirement.

9. Retiring Before Your Agency Processes Your Paperwork

Early retirement for LEOs often coincides with a flurry of paperwork, from annuity applications to FEHB continuation and TSP distributions. But retiring before your agency finalizes your paperwork can delay or reduce your benefits.

FERS processing timelines in 2025 still take between 60 to 90 days. Any missing documentation or incorrect job codes can delay annuity payments, trigger incorrect high-3 calculations, or cause a loss in health benefits.

Start the process at least 6 months before your projected retirement date. Keep copies of:

• SF-3107 (FERS Application)

• Retirement annuity estimate

• Employment history and SF-50s

10. Overlooking the TSP Withdrawal Rules

Your Thrift Savings Plan (TSP) can play a crucial role in bridging the gap between retirement and Social Security. But if you retire before age 55 (or 50 for public safety employees), early withdrawal penalties apply.

Fortunately, LEOs qualify for the age-50 exception in 2025. If you separate in the year you turn 50 or later, you can access your TSP without the 10% early withdrawal penalty. But you must separate from service in the same calendar year you turn 50 or older.

If you retire at 49—even if your birthday is just weeks away—you’ll face penalties unless you roll over the funds or use the 72(t) rule for substantially equal periodic payments.

Make Sure You Catch These Before It’s Too Late

LEO retirement benefits are among the most generous in the public sector, but only if you follow every rule precisely. One wrong assumption about your service years, mandatory age, or high-3 salary can reduce your annuity or delay your separation date. Worse, missing paperwork or early separation from a covered position can strip away hard-earned benefits.

Before setting a retirement date, work closely with your agency’s HR department and a retirement specialist who understands the nuances of law enforcement retirement. The earlier you start, the more control you’ll have over your financial future.

For personalized advice, get in touch with a licensed professional listed on this website.