Thinking about retiring from the federal government? It can be a complex process, with several pathways, depending on your career and personal circumstances. With the right information and preparation, you can navigate it smoothly so you have access to your full Federal Employees Retirement System (FERS) benefits.
What You Need To Know
Retiring from the federal government is not as easy as other jobs. There are five pathways to federal retirement with FERS (Federal Employees Retirement System) benefits. The retirement options include: voluntary, early, disability, deferred, and phased. Each one has unique requirements.
How do I retire from the federal government?
With a federal government job, there are several ways to retire. It’s more complicated than a traditional job where you submit your retirement papers without much explanation.
Employees who started working for the federal government in 1987 or after are eligible for benefits under FERS (Federal Employees Retirement System).
With federal service employment, you have 5 options if you’re eligible for benefits under FERS:
- Voluntary
- Early
- Disability
- Deferred
- Phased
Let’s explore each option so you can make an informed decision about your future.
1. Voluntary retirement
This is the most common and straightforward type of retirement from the federal government and the one most comparable to retiring from a non-government job.
Voluntary retirement is based on:
- your age
- number of years of creditable service and
- any other special requirements
At what age can I voluntarily retire from the federal government?
Federal employees may be eligible to voluntarily retire and receive benefits if they meet the age requirement and have a specific number of creditable service years.
So, let’s start with age. In some cases, you need to reach the Minimum Retirement Age (MRA) to get benefits.
If you were born after 1969, the minimum age is 57.
If you were born before, the age will vary between 55 and 56 years old and 10 months. Here’s a chart from the U.S. Office of Personnel Management.
| If you were born | Your MRA is | |
| Before 1948 | 55 | |
| In 1948 | 55 and 2 months | |
| In 1949 | 55 and 4 months | |
| In 1950 | 55 and 6 months | |
| In 1951 | 55 and 8 months | |
| In 1952 | 55 and 10 months | |
| In 1953-1964 | 56 | |
| In 1965 | 56 and 2 months | |
| In 1966 | 56 and 4 months | |
| In 1967 | 56 and 6 months | |
| In 1968 | 56 and 8 months | |
| In 1969 | 56 and 10 months | |
| After 1969 | 57 |
Courtesy: U.S. Office of Personnel Management
What if I don’t have 30 years of service?
If you retire at the MRA and have at least 10 years of service but less than 30 years, your benefit is reduced by 5% yearly for each year you’re under age 62.
That’s unless you have 20 years of service and are at least age 50. Then, your benefit starts when you’re 60 or later.
Can I retire after 20 years of federal service?
You may be able to retire after 20 years of federal service, if you are at least age 50 with special provisions in certain roles or if your agency is undergoing any of these::
- a major reorganization
- reduction-in-force
- transfer of function
If you’re not 50 years old, you’ll need 25 years of service to retire from the federal government and must retire under specific provisions for air traffic controllers, law enforcement, firefighters, or Military Reserve Technician personnel.
2. FERS early retirement
This type of retirement is like a voluntary retirement, but the age and service requirements are temporarily lowered. This is done to increase the number of federal retirees in a given year or timeframe.
This usually happens due to:
- restructuring
- reshaping
- downsizing
- reorganization
- transferring of function
These retirees get an immediate annuity before they have qualified under normal circumstances.
It’s available to FERS and CSRS employees who generally meet these age and service requirements:
- Are at least age 50 with at least 20 years of creditable service or
- Any age with 25 years of service
When this happens to your agency, it is done under the Voluntary Early Retirement Authority or VERA. It’s also known as the “early out” retirement.
Most agencies, but not all, get approval from the Office of Personnel Management (OPM) to do this.
Sometimes, an incentive package or “buyout” is offered to encourage more people to retire early. This is known as a Voluntary Separation Incentive Payment (VSIP). Federal employees get lump-sum payments up to $25,000 (or the employee’s severance pay amount if that’s less).
Should I retire early from the federal government?
It depends on your personal situation - for you, your family, and/or your partner or spouse.
Early retirement offers can be unpredictable and may not align perfectly with personal retirement planning. Employees should consider their health insurance, the impact on their pension, and other financial factors, such as the need for immediate income or employment prospects outside federal service.
Ask yourself these questions before retiring early, and then determine if you're seeing these financial signs. They're indicators that early retirement may be good financial choice.
3. Federal government disability retirement
If you can no longer perform your job duties due to a significant physical or mental health condition and your agency has exhausted all attempts to keep you in a productive position through an accommodation or reassignment, you may be eligible for disability retirement from the federal government.
You will have to provide medical documentation and meet the eligibility requirements:
- Your disability will last at least one year
- Your agency hasn’t been able to accommodate you even though its considered you for other vacant positions at the same grade and pay level.
- You completed at least 18 months of federal service under FERS.
- While employed and subject to the federal retirement system, you became disabled because of disease or injury.
- Your application for separation must be received before separation or within one year thereafter.
- You must also apply for Social Security benefits.
You may also need to provide medical records after your separation to maintain your disability benefits.
Approval rates of disability retirement
While the federal government doesn’t release its approval rates for disability retirement, it’s not uncommon to have your application denied.
There’s an entire legal industry dedicated to representing federal employees in their claim.
If the OPM denies your disability retirement application, you have 30 days to request reconsideration, which is basically asking the OPM to review its decision.
4. Deferred retirement
If you leave your federal job before qualifying for the annuity, you may still be eligible for deferred retirement benefits.
Deferred retirement applies in these cases:
- You are not eligible for an immediate annuity within one month of separation
- Meet the minimum civil service requirements
- Don’t take a refund of retirement deductions after your separation
To be eligible, you must meet age and service requirements:
- 62 years old with 5 years of service
- Meet the MRA with 30 years
- Meet the MRA with 10 years
Remember, if you retire at the MRA with at least 10 years but not 30 years, your benefit is reduced by 5% a year for every year you are under 62. If this applies to you, you may also be able to postpone the beginning date of your annuity. This reduces the age reduction.
Unlike some of the other types of retirement, you are not eligible for health benefits, including life insurance or annuity supplement.
Should I take a deferred retirement?
Deferred retirement often results in lower lifetime benefits and does not include health insurance coverage through FEHB in retirement, which can be a significant drawback if you don’t have other insurance options upon retirement and even while still working.
Potential deferred retirees should weigh the long-term financial impacts and consider alternative health insurance options.
5. Phased retirement
With this type of federal retirement, you work part-time while getting about half of your retirement benefits and half your pay.
It’s a way to help federal employees, letting them partially retire because they’re only working part-time and getting benefits. It allows you time to adjust to retirement mentally and financially and to complete your retirement planning. You also get additional service credit toward full retirement.
It also helps the agency because it allows the employee to transfer their knowledge to their department, agency, and colleagues. In fact, it’s required 20% of the federal employee’s time is spent mentoring to facilitate that transfer of knowledge for the next generation of federal workers.
You’ll be eligible for immediate retirement if you:
- Reached their minimum retirement age (MRA) with 30 years of service or be at least 60 years old with 20 years of service.
- Have been a full-time employee for at least 3 years before entering phased retirement.
- Be in a position for phased retirement, as determined by your agency.
This arrangement can last for a predetermined period, after which the employee fully retires and begins to receive their full retirement benefits.
Retiring from the federal government
While age and years of service are important factors when considering retiring from the federal government, you also need to consider your overall benefits.
There are many nuances to retiring from a federal job. Talk with human resources and possibly a financial advisor and federal benefits expert to fully understand how this decision will impact your overall retirement plan.
Depending on the type of retirement, your benefits may be adjusted.
Preparation and understanding of each option are essential for making the best decision for your financial and personal well-being.
Resources
- FERS Retirement | U.S. Office of Personnel Management
- Phased Retirement | U.S. Office of Personnel Management
- CSRS Retirement | U.S. Office of Personnel Management