Civil Service Early Retirement

You may be offered Civil Service Early Retirement by your Federal Agency if there is a major reorganization going on.

If you are offered Early CSRS Retirement, you must meet the following qualifications:

Be at least 50 years old with 20 years of creditable service
Be any age with 25 years of creditable service

You must also have served at least one of your last two years as a CSRS.

You can only take Civil Service Early Retirement when the government offers it to you. You can not choose to take an Early Retirement on your own.

If you are ready to retire, but don't meet the requirements for regular CSRS retirement - you should look into Deferred CSRS retirement.

Civil Service Early Retirement Pension Calculation

When you accept an Early Retirement, your pension will be calculated the same way that it would for a normal CSRS Retirement.

If you are over age 55 when you take your Early Out - you will receive 100% of your pension. However, if you are under age 55, your pension will be reduced.

Early Retirement Pension Reductions

If you are under age 55 and accept an Early Out Retirement, your pension will be reduced.

Your CSRS Pension will be reduced by one-sixth of a percent for each full *month* you are under age 55.

This is a permanent reduction in your pension. Your pension will not go back up when you reach 55.

Let's take a look at an example...

Example of Pension Reduction for Early CSRS Retirement

So let’s say you were offered a Civil Service Early Retirement. And you would be age 54 and 6 months when you retire.

For our example, we'll say you had a High-3 Salary of $55,000 and 25 years of creditable service.

Without considering your age - your pension would be calculated as...

$55,000 x 5 years x 1.5% = $4,125.00
$55,000 x 5 years x 1.75% = $4,812.50
$55,000 x 15 years x 2.0% = $16,500.00

$4,125.00 + $4,812.50 + $16,500.00 = $25,437.50 per year
$25,437.50 / 12 = $2,120 per month

But, because you would be taking an Early CSRS Retirement before age 55 - your pension will be reduced.

In our example, you will be 54 years and 6 months old when you retire. Since there are 6 months between your retirement date and age 55, your pension would be PERMANENTLY reduced by 1%.

Your pension would be $2,120 - 1% = $2,099 a month.

So if you were going to receive a CSRS pension of $2,120 per month but retired at age 54 and 6 months, you would now receive a pension of approximately $2,099 per month.

Remember, this reduction is permanent. Your pension will increase by retirement Cost of Living Adjustments, but you will never get that 1% back.

Choosing Civil Service Early Retirement

While it may have come as a surprise - an early retirement from the Civil Service Retirement System can have lots of benefits.

Before you accept your agency's offer of an Early Retirement - make sure you are financially prepared for retirement.

Since there are so many factors involved - I encourage you to seek advice from a professional familiar with Federal Employee Benefits. They can help you make sure that you understand all of your options and that you make the best choice for your situation.

Is CSRS Early Retirement Right for Me?

Wondering if a CSRS Early Retirement might be right for you?

Are you looking for someone to help you understand your Federal benefits and how to make the best choices for your personal situation?

Click here to learn more about how a Federal Retirement Planner can help you.

Return from Civil Service Early Retirement to CSRS Retirement

Micah Shilanski - Financial Planner for Federal Employees

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