Law Enforcement Officers Get Early Retirement—But These Costly Mistakes Can Erode That Advantage Quickly

Key Takeaways

• Even with early retirement eligibility, law enforcement officers can lose substantial benefits due to poor timing, missed deadlines, or lack of coordination between federal programs.

• Understanding the unique structure of LEO retirement under FERS is critical to maximizing income, avoiding penalties, and protecting health and survivor benefits.

The Promise of Early Retirement for LEOs

Law enforcement officers (LEOs) under the Federal Employees Retirement System (FERS) enjoy one of the most advantageous retirement packages in public service. With eligibility to retire after 25 years of service at any age or at age 50 with at least 20 years of service, the system is designed to reward the high-risk and demanding nature of law enforcement work.

In 2025, this benefit remains intact and highly valuable, but only if used wisely. Too often, officers focus on reaching the eligibility date and overlook the equally critical decisions that must follow. Retirement isn’t just about when you can leave — it’s also about how you prepare for what comes next.

1. Retiring Without a Full Service Credit Check

Your pension depends heavily on the accuracy of your service history. Unfortunately, many officers discover discrepancies after they retire. If any portion of your career — including temporary service, military buyback time, or leave without pay — hasn’t been properly credited, your annuity calculation could be significantly lower.

Always request a Certified Summary of Federal Service and verify it against your records at least two years before your target retirement date. If you served in the military, review your buyback payment status. Without confirmation that your time has been credited, you risk leaving valuable pension dollars behind.

2. Misunderstanding the FERS Annuity Supplement

LEOs retiring before age 62 receive the FERS Special Retirement Supplement (SRS), which mimics Social Security income until you’re eligible to claim actual Social Security benefits. While this supplement is a key part of your early retirement income, it is subject to the Social Security earnings test.

In 2025, the earnings limit is $23,480. If you earn more than this amount through post-retirement employment, your supplement will be reduced by $1 for every $2 over the limit. That reduction applies regardless of your federal law enforcement status.

If you plan to work after retirement, especially in a job that doesn’t qualify for LEO retirement rules, factor in the potential loss of this supplement when budgeting.

3. Overlooking Survivor Benefit Elections

Choosing whether or not to provide a survivor annuity can significantly impact your spouse’s future — and your own health insurance eligibility. If you opt not to elect a survivor benefit, your spouse may lose access to your Federal Employees Health Benefits (FEHB) coverage in retirement.

This decision must be made when you file your retirement application and is irrevocable after that point. The maximum survivor benefit equals 50% of your unreduced annuity. Even the partial 25% survivor benefit keeps FEHB eligibility intact for your spouse.

Given rising healthcare costs and limited options in the private market, ensuring continued FEHB access for your spouse is often worth the cost of the reduction to your annuity.

4. Assuming FEHB Continues Automatically

You’re eligible to continue FEHB into retirement only if you’ve been continuously enrolled (or covered under a family member’s plan) for the five years immediately preceding retirement. This rule can catch some LEOs off guard — especially those who switched to a private health plan mid-career.

In 2025, this rule still applies without exception. If you don’t meet the requirement, you will not be able to carry your federal health insurance into retirement. Double-check your FEHB enrollment history and ensure you’re covered for the required time.

5. Failing to Coordinate With Medicare

LEOs who retire in their 50s often delay thinking about Medicare until age 65 approaches. That delay can be costly. Understanding how your FEHB coverage works with Medicare — and whether to enroll in Part B — takes research, especially since many FEHB plans waive deductibles or lower cost-sharing for enrollees with Medicare.

In 2025, Part B carries a standard premium of $185 per month. Whether it’s worth it depends on your FEHB plan, your medical needs, and your budget. If you miss the initial enrollment window at age 65 and enroll later, you could face a 10% penalty for each year you delay.

Don’t wait until the last minute. Review your FEHB plan’s coordination with Medicare well before your 65th birthday and discuss enrollment options with a licensed professional.

6. Overestimating the TSP as a Guaranteed Income Source

Your Thrift Savings Plan (TSP) is a powerful retirement tool, but it’s not a pension. It’s a defined contribution plan, meaning your retirement income from TSP depends entirely on how much you contributed, how the market performed, and how you manage withdrawals.

For LEOs retiring early, this introduces a risk: you might be relying heavily on a fund that’s subject to market volatility. While you can start penalty-free TSP withdrawals after age 50 under the special provisions for LEOs, that doesn’t mean you should drain your account too quickly.

In 2025, required minimum distributions (RMDs) begin at age 73. But if you plan to live 30+ years in retirement, your withdrawal strategy needs to last. A common mistake is withdrawing too much too soon, leading to shortfalls later in life.

7. Ignoring COLA Rules That Impact Your Pension

FERS law enforcement pensions are partially protected by cost-of-living adjustments (COLAs), but they aren’t fully inflation-proof. If inflation rises above 2%, your COLA will be lower than the inflation rate:

• 2% or less: Full COLA

• Between 2% and 3%: COLA is 2%

• 3% or more: COLA is 1% less than inflation

For 2025, the COLA is 2.5%, so your pension receives a 2% adjustment. Over a 25- to 30-year retirement, this erosion adds up. LEOs sometimes underestimate how inflation will reduce the purchasing power of their annuity.

To offset this, you should not rely solely on your pension. Diversifying income sources through TSP, other investments, or part-time work (mindful of the SRS limit) can help preserve financial security.

8. Not Reviewing Life Insurance Costs

If you’re enrolled in the Federal Employees’ Group Life Insurance (FEGLI) program, it’s crucial to reassess your coverage and cost structure before retirement. Basic coverage can continue into retirement, but Option B and Option C become significantly more expensive with age.

In your 50s and 60s, these premiums increase every five years. If you don’t review your FEGLI elections before you retire, you could be stuck with costly deductions or more insurance than you need.

Compare the rising cost of FEGLI to other insurance solutions, but remember: you must carry the coverage for at least five years prior to retirement to continue it into retirement.

9. Missing the Value of Sick Leave in Retirement Calculations

Unused sick leave can increase your creditable service when calculating your pension. One year of sick leave equals 2,087 hours. If you retire with 1,000 hours of sick leave, for example, that adds nearly six months of service to your annuity computation.

However, this only applies if you retire on an immediate annuity. If you separate and postpone retirement, your unused sick leave doesn’t count. Be careful about timing. If you’re close to earning another year of creditable service, delaying by even a few weeks might boost your lifelong pension.

10. Underestimating the Impact of Early Separation

If you leave before reaching age or service eligibility — even by a few months — you won’t receive the LEO retirement benefit. Instead, your pension would be calculated using the regular FERS formula, which is less generous:

• LEO formula: 1.7% x High-3 x 20 years, then 1.0% x High-3 x additional years

• Regular FERS: 1.0% x High-3 x all years of service (1.1% if age 62 with 20+ years)

For example, retiring at 19 years and 10 months may seem minor, but it’s the difference between receiving the enhanced 1.7% multiplier or a standard 1.0%. Plan your separation date with precision.

Why These Decisions Matter More for LEOs

LEOs face unique retirement challenges and opportunities. While the ability to retire early is a powerful advantage, it comes with a compressed decision timeline. You have less time to build your TSP, fewer years under FEHB if you joined mid-career, and a longer post-retirement life to fund.

That makes every decision — from when you retire to how you coordinate Medicare and FEHB — more consequential. It’s not enough to simply meet the eligibility requirements. Your goal should be to retire strategically, protecting what you’ve earned and preparing for what’s ahead.

Protect Your Advantage With the Right Guidance

LEO retirement under FERS is one of the strongest benefits in public service, but only when used to its full potential. Missing critical details like service credit, health coverage continuity, or the impact of early withdrawals can lead to regrets that are irreversible.

Get help before you file. Speak with a licensed professional listed on this website who understands LEO retirement provisions and can help you make informed choices. Your future is too important to leave to chance.