FERS Retirement Planning

Retirements are usually at the end of the year, so some federal employees believe that’s the only time to retire. But there’s no such requirement—you may and should start preparing for retirement as soon as it’s in sight.

We’ll start with the basics: when you can retire voluntarily, how benefits are calculated, and how inflation adjustments function. As more than nine-tenths of you are under FERS, we’ll start there.

We’ll first look at retiring on an immediate annuity under standard or early retirement criteria, then at scenarios where payments wouldn’t start immediately. Then we’ll talk about one of the more intricate components of service time for retirement, credits for active-duty military service, before finishing with survivor benefits.

If you already know this, then great. If you don’t, the moment to learn is now.

FERS Retirement Eligibility

Years of creditable service and age determine eligibility for an immediate unreduced annuity. FERS combinations are:

At age 62 with five years of service

At age 60 with 20 years of service

At your MRA with 30 years of service

MRA varies from 55 to 57, depending on birth year.

You can retire at your Minimum Retirement Age (MRA) with at least ten but fewer than 30 years of service, but your annuity will be lowered by 5% for every year you’re under 62. Postponing your annuity might decrease or eliminate the penalty. That makes sense if you’re leaving the government for a job in the private sector, for example.

If your agency is undertaking a reduction-in-force (RIF), restructuring, or transfer of function and gives you an early retirement opportunity, you can retire on an immediate unreduced annuity as early as the age of 50 with at least 20 years of service or at any age with 25.

Standard FERS pension calculation

The annuity formula is straightforward:

0.01 x the average of the highest three consecutive years of basic pay (your “high-3) x years of creditable service, with full months past the final full year awarded proportionally.

For 62-year-olds with 20 years of service, the calculation is:

0.011 x “high-3” x years of creditable service, with full months past the final year credited proportionally

Note that unused time won’t be added to your years of service until you’re eligible to retire.

The high-3 is the average of your highest three years of basic pay, weighted by duration of service. This three-year period begins and concludes on the highest-paying dates. If you’re like most federal employees, you’ll earn the most in the 36 months (78 pay periods) before you retire.

Special category  FERS calculation

Special categories of employees, like law enforcement officers and firefighters, have different rules than other government workers. They can retire:

At 50 with 20 years of service

At any age with 25 years of service

The annuity will be calculated with an enhanced formula: 0.17 x high-3 x 20 years of covered service, plus 0.01 x additional years and full months of service.

FERS special retirement supplement (SRS)

SRS approximates your FERS Social Security benefit. It stays at its original monetary level until age 62, when you first become eligible for regular Social Security. You can apply for Social Security at that time. SRS payments terminate either way. Your SRS will be lowered or terminated if you earn more than the Social Security earnings limit while receiving it.

Note that special category employees who retire before their MRA won’t be subject to the Social Security earnings limit until their MRA. During that window, you can earn as much as you want.


COLA is received by:

• regular retirees aged 62 or more;

• law enforcement officers, air traffic controllers, and firefighters;

• military reserve technicians aged 50 with 25 years of service who lost their military status due to medical reasons;

disability retirees; and

• special CIA personnel.

COLAs are paid for retirements from jobs subject to mandatory retirements, such as law enforcement officers, firefighters, and air traffic controllers, no matter whether the person worked up to the compulsory retirement age or retired early.

If you retire before 62, no matter which month you turn 62, your annuity will be enhanced by the full FERS COLA paid the following January.

FERS and CSRS COLAs aren’t identical. If the annual percentage rises by 2% or less, FERS will match CSRS. If it grows 2 to 3%, it won’t exceed 2%. And if it rises 3% or more, it will equal the CSRS increase minus 1%.

Contact Information:
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