When am I Eligible to Retire From the Federal Government?
This is probably the single most asked question by federal employees, and for good reason.
Federal employees work hard, endure constant change, and understand their retirement benefits rely heavily on meeting specific criteria. While retirement from the private sector relies mostly on a worker’s own readiness, the federal government adds additional eligibility metrics based on a worker’s retirement system, age, and years of creditable service. Let’s explore each of these below along with some other special considerations:
1. Retirement system: Federal employees will fall under one of two retirement systems. Generally, those hired before 1984 will fall under the Civil Service Retirement System (CSRS) and those hired in 1984 or later will adhere to the Federal Employee Retirement System (FERS). It is important to confirm your retirement system because each will slightly differ in their age and service requirements.
2. Age and years of service: Workers covered by CSRS tend to adhere to slightly more generous eligibility requirements, receive larger pensions, but do not receive social security benefits. In order to retire with full eligibility under CSRS, workers must meet one of the below:
In order to retire with an immediate, unreduced pension, workers under FERS must meet one of the following:
Minimum Retirement Age ranges from age 55-57 depending on your date of birth.
3. Reduced and postponed pensions: Generally, federal employees are entitled to pension benefits once they reach 5 years of service. If they choose to separate from service before full eligibility, they may decide to postpone receiving their pension until one of the above requirements are met. Alternatively, they may be able to receive an immediate benefit but at a reduced rate if they have reached their MRA and have at least 10 years of creditable service.
4. Voluntary Early Retirement Authority (VERA): Occasionally, agencies will downsize or reorganize and offer early eligibility for full retirement. Under VERA eligibility changes to:
It is important for federal employees to understand the requirements to receive a full and unreduced pension benefit. However, retirement eligibility is just one part of the equation. Federal employees also need to understand how their benefits work and whether they are financially ready for retirement. The advisors at SCO Wealth Management not only understand the retirement eligibility requirements but can help employees evaluate their financial readiness. Please use us as a resource for your questions or schedule a complimentary review of your retirement plans.
Federal employees work hard, endure constant change, and understand their retirement benefits rely heavily on meeting specific criteria. While retirement from the private sector relies mostly on a worker’s own readiness, the federal government adds additional eligibility metrics based on a worker’s retirement system, age, and years of creditable service. Let’s explore each of these below along with some other special considerations:
1. Retirement system: Federal employees will fall under one of two retirement systems. Generally, those hired before 1984 will fall under the Civil Service Retirement System (CSRS) and those hired in 1984 or later will adhere to the Federal Employee Retirement System (FERS). It is important to confirm your retirement system because each will slightly differ in their age and service requirements.
2. Age and years of service: Workers covered by CSRS tend to adhere to slightly more generous eligibility requirements, receive larger pensions, but do not receive social security benefits. In order to retire with full eligibility under CSRS, workers must meet one of the below:
- Age 62 with 5 years of service
- Age 60 with 20 years of service
- Age 55 with 30 years of service
In order to retire with an immediate, unreduced pension, workers under FERS must meet one of the following:
- Age 62 with 5 years of service
- Age 60 with 20 years of service
- Minimum Retirement Age (MRA) with 30 years of service
Minimum Retirement Age ranges from age 55-57 depending on your date of birth.
3. Reduced and postponed pensions: Generally, federal employees are entitled to pension benefits once they reach 5 years of service. If they choose to separate from service before full eligibility, they may decide to postpone receiving their pension until one of the above requirements are met. Alternatively, they may be able to receive an immediate benefit but at a reduced rate if they have reached their MRA and have at least 10 years of creditable service.
4. Voluntary Early Retirement Authority (VERA): Occasionally, agencies will downsize or reorganize and offer early eligibility for full retirement. Under VERA eligibility changes to:
- Age 50 with 20 years of service or any age with 25 years of service
It is important for federal employees to understand the requirements to receive a full and unreduced pension benefit. However, retirement eligibility is just one part of the equation. Federal employees also need to understand how their benefits work and whether they are financially ready for retirement. The advisors at SCO Wealth Management not only understand the retirement eligibility requirements but can help employees evaluate their financial readiness. Please use us as a resource for your questions or schedule a complimentary review of your retirement plans.