FERS Deferred Retirement

You may qualify for a FERS Deferred Retirement if you separate from service before becoming eligible for an immediate retirement.

Let’s say you worked for the Federal Government for 5 years, but then you left (separated from service) and took another job in the private sector.

Even though you didn’t ‘retire from’ the Federal Government – your last job before retirement wasn’t a government job – you may still be able to draw a government pension.

Here are some of the requirements for FERS Deferred Retirement –

At least age 62 with 5 years in service
MRA and 30 years in service.

Your Minimum Retirement Age (MRA) depends on what year you were born. To see a current chart of Minimum Retirement Age for FERS.

Early Deferred Retirement = Reduced Pension

You can also claim a deferred retirement if you are...

MRA with 10 – 29 years in service

If you go this route, your pension will be reduced. You will give up 5% for every year that you are under age 62.

Example of Pension Reduction for Early Deferred Retirement

Let's say your MRA is age 56. You had 10 years in service - and want to request your deferred retirement at age 56.

Your pension calculation will be reduced by (62 years – 56 years = 6 years x 5% = 30%. This reduction is permanent – your monthly benefits will be reduced by this amount for the rest of your life.

Can You Wait Until Age 62?

I'm often asked if FERS should draw their deferred pension as soon as they can - or if they should wait until they are age 62 (or older).

Why wait? If you wait until age 62 to draw your pension, you will receive 100% of your benefit.

*Now if you have 30+ years in service - you can draw your deferred pension at your MRA without a reduction. But if you have between 10-29 years in service at MRA, you need to decided *when* you will request your deferred pension benefit.

Let’s take the same example and say that even though your MRA was 56 years old, you waited until age 62 (or later) to begin your FERS deferred retirement. Since you would be age 62 (or older) and have more than 5 years in service – you would receive 100% of your pension benefit.

Example: Monthly Pension Differences

Let's add some dollars to our previous example to show the difference it makes to wait.

For our example, let's say...

Your MRA is 56 years old
You have 10 years of creditable service
Your High-3 is $50,000

The FERS Retirement Formula is...High-3 Salary x Years in Service x Pension Multiplier = Annual Pension - Reductions

If you wait to draw your pension until you are age 62 (or older) you would receive...

$50,000 x 10 Years x 1% = $5,000 per year, about $416 per month.

But, if you retire when you are 56 years old, your pension would be reduced by (62 years - 56 years) = 6 years x 5% = 30% reduction

So for our example, if you retired at age 56, your deferred pension benefit would be...

$5,000 per year - 30% reduction = $3,500 per year, or about $291 per month.

Is FERS Deferred Retirement Right for Me?

Wondering if a FERS Deferred retirement might be right for you?

If you're looking for someone to help you get the most out of your Federal benefits and help you manage your personal and retirement finances - consider finding a financial planner who is also experienced in Federal benefits.

Learn more about how a Federal Retirement Planner can help you.

Return from FERS Deferred Retirement to FERS Retirement

Micah Shilanski - Financial Planner for Federal Employees

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