Special Category Retirements Come With Perks—But Also Penalties If You Miss the Small Print

Key Takeaways

• Special category retirement offers valuable perks like earlier retirement eligibility and enhanced annuity formulas, but these benefits come with strict rules and potential pitfalls if you’re not fully informed.

• Missing deadlines, miscounting service time, or failing to meet specific eligibility conditions can reduce or delay your benefits. It’s critical to understand how the small print can shape your retirement outcome.

What Counts as Special Category Retirement in 2025?

Special category retirement applies to select public sector roles that carry high-risk, physically demanding, or security-sensitive duties. In 2025, this category includes:

• Law enforcement officers (LEOs)

• Firefighters

• Air traffic controllers (ATCs)

• Customs and border protection officers

• Nuclear materials couriers

• Capitol Police and Supreme Court Police

Each group has unique eligibility criteria, but they all qualify for earlier retirement and receive enhanced annuity benefits. These provisions reflect the demanding nature of their jobs and the expectation of shorter career spans.

Eligibility Requirements Are Not as Flexible as You Might Think

The general rule for special category employees is retirement after:

• 20 years of covered service at any age once you turn 50, or

• 25 years of covered service at any age

But the key word is “covered”. Only years spent in qualifying positions count. Time spent in other federal roles or temporary promotions outside the covered category does not count toward special category retirement.

You must be serving in a covered position on the day you retire to qualify for the enhanced benefits. If you transfer out too soon, you may lose eligibility entirely.

The Enhanced Formula Sounds Great, But Timing Is Everything

Special category retirees benefit from a different annuity formula under the Federal Employees Retirement System (FERS):

• 1.7% of your high-3 average salary for each of the first 20 years

• 1.0% for each additional year beyond 20

This results in a significantly larger annuity if you retire after 20 years. For example, someone with 20 years of special category service can expect 34% of their high-3 salary, compared to 20% under standard FERS rules.

However, this benefit can backfire if you don’t reach the full 20-year mark. Even 19 years and 11 months won’t qualify you for the 1.7% multiplier. You’ll fall back to the regular FERS rate of 1.0%, unless you return to a covered role and complete the required service.

Mandatory Retirement Creates a Deadline You Can’t Control

Unlike regular FERS employees, most special category workers face mandatory retirement:

• Age 57 for LEOs, firefighters, and ATCs

• Age 56 for some customs enforcement roles

This means you must retire by the end of the month you reach that age, assuming you meet the service requirements. The only exception is a waiver granted under rare circumstances, usually for no more than 1 year.

Mandatory retirement can complicate your planning if you’ve had breaks in service, military time that hasn’t been bought back, or years spent in non-covered roles.

Sick Leave Helps, But It Doesn’t Extend Special Service Credit

Unused sick leave is credited toward your total service time for annuity calculation purposes, but it does not count toward meeting the 20- or 25-year special category threshold.

So if you retire with 19 years of special category service and 1 year of sick leave credit, you’ll still only get the regular 1.0% multiplier unless you meet the 20-year covered service requirement.

Military Buyback Can Save You—But Only If You Use It Right

Military service can be credited toward your FERS retirement if you complete a deposit for that time. However, for special category retirement:

• Military service does not count toward the 20- or 25-year covered service minimum unless it interrupts special category service.

• It can count toward your total FERS service for the annuity formula and eligibility for the FERS minimum retirement age (MRA) provisions.

In other words, military buyback helps—but it won’t replace covered service requirements for enhanced benefits.

You May Lose the FERS Supplement If You Return to Work

Special category retirees who retire before age 62 and are eligible for an immediate annuity usually qualify for the FERS Special Retirement Supplement (SRS). This supplement bridges the gap until you’re eligible for Social Security.

However, SRS comes with an earnings limit. In 2025, if you earn more than $23,480 from non-federal employment, your supplement is reduced or eliminated.

Returning to work in the private sector can reduce or suspend this benefit. And if you return to federal service, your annuity may be offset or even halted, depending on how you re-enter the workforce.

Health Insurance Can Be Tricky in Early Retirement

If you’ve had at least 5 years of continuous Federal Employees Health Benefits (FEHB) coverage before retiring, you can continue that coverage into retirement. But for special category employees who retire early, FEHB coverage coordination with Medicare later can be complicated.

At age 65, Medicare becomes primary for retirees, but until then, FEHB is your main coverage. Be sure you:

• Understand how your FEHB plan treats early retirees

• Review whether you’ll need Medicare Part B at 65

• Consider the cost and coverage implications of delaying Medicare enrollment

Cost-of-Living Adjustments May Not Kick In Immediately

For regular FERS retirees, COLAs (cost-of-living adjustments) start at age 62. Special category retirees who take immediate retirement before age 62 also receive COLAs right away, which is a valuable benefit. However, if you retire under deferred or postponed retirement rules due to ineligibility at separation, you may not receive COLAs until later.

And remember, COLAs are prorated in the first year based on your retirement month. They also vary depending on the Consumer Price Index and may be capped for FERS retirees when inflation exceeds 2%.

Make Sure Your Designation of Retirement Type Is Correct

When you file for retirement, you must designate your retirement as a special category. Errors in your paperwork—or delays in submitting it—can result in:

• Missed enhanced benefits

• Delays in processing

• Incorrect annuity amounts

Check with your agency’s HR department before submitting your retirement application. Ensure that your SF-3107 and related documentation are marked correctly and submitted with all required evidence of covered service.

TSP Access Follows FERS Rules, Not Special Category Rules

Your Thrift Savings Plan (TSP) withdrawals follow the same rules as regular FERS employees. You can access your TSP without penalty at:

• Age 59½ in general

• Age 50 if you separate during or after the calendar year in which you turn 50 (this applies only to special category employees)

You may use installment payments, partial withdrawals, or purchase an annuity. However, early withdrawals may trigger tax consequences, and strategic planning is essential to avoid large tax liabilities in early retirement.

Deferred and Postponed Retirement Options Are Limited

Special category employees who leave federal service before becoming eligible for immediate retirement can choose deferred or postponed retirement. But both come with reduced benefits:

• Deferred retirement forfeits FEHB and life insurance

• Postponed retirement may allow FEHB reinstatement but only if you meet MRA and other rules

Neither option includes the enhanced 1.7% multiplier unless you met the 20-year special category requirement before separation. Timing your exit incorrectly can cost you thousands in lifetime income.

Survivor Benefits Work the Same—But Only If You Elect Them

Special category retirees can provide the same survivor benefit options as other FERS retirees:

• Full survivor benefit (50% of your unreduced annuity)

• Partial survivor benefit (25%)

• No survivor benefit

Electing a survivor benefit ensures your spouse retains access to your FEHB coverage. Without it, your spouse loses FEHB eligibility upon your death.

This election also reduces your monthly annuity, so you’ll want to weigh the costs against the long-term protection it provides your family.

Understanding the Stakes Before You File

Retiring under special category provisions can offer a significant advantage—if you follow the rules. Mistakes often stem from not understanding the difference between covered and non-covered service, failing to monitor your service time precisely, or assuming you’ll be automatically granted enhanced benefits.

Even a few months of miscalculation can shift you into a completely different retirement path.

Small Details, Big Outcomes: Get Professional Support

Special category retirements are more complex than standard FERS retirements. From mandatory retirement ages and enhanced annuity formulas to Medicare coordination and TSP access, each element must align precisely with your career timeline.

Before making any decisions, review your service record carefully, speak with your HR office, and get in touch with a licensed professional listed on this website for personalized retirement planning.