Retiring from the Feds at 57

[Anonymous]

I'm currently 51 and would like to retire at 57 from my federal job. I'll have 15 years of service by that time. I've tried to psych myself out to stay the extra 5 years and retire at 62 years old, but I can't do it.

While I plan on retiring from my job, I absolutely intend on working doing something else. I'm a nurse, so that 'something else' can look like a myriad of things.

Here's my question, since I won't have a need for the pension at 57, can I still get health benefits at 57 and defer my retirement till 62 (without penalty) or does the health benefits go hand in hand with the pension?

Lastly, if more some reason I decide to take my pension at 57, is the penalty only until I turn 62 or is it a lifetime penalty?

Thanks!

[Anonymous]

OP here

I meant to say *I tried to psych myself TO stay until 62.

[Anonymous]

Under standard Fers- no, you can’t collect health benefits while deferring pension and yes if you retire at 57 with only 15 years of service it will be a lifetime penalty of ~25% of your total pension (you get 5% less for each year that you retire before 62) also keep in mind you will not be eligible for COLA adjustments until you reach 62.

[Anonymous]

Anonymous wrote:Under standard Fers- no, you can’t collect health benefits while deferring pension and yes if you retire at 57 with only 15 years of service it will be a lifetime penalty of ~25% of your total pension (you get 5% less for each year that you retire before 62) also keep in mind you will not be eligible for COLA adjustments until you reach 62.

Is there a difference between 15 years of service and 20?

[Anonymous]

Anonymous wrote:Under standard Fers- no, you can’t collect health benefits while deferring pension and yes if you retire at 57 with only 15 years of service it will be a lifetime penalty of ~25% of your total pension (you get 5% less for each year that you retire before 62) also keep in mind you will not be eligible for COLA adjustments until you reach 62.

OP here. Oh wow. It's worse than I thought. Thanks for clarifying.

I might have to rethink this plan.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Under standard Fers- no, you can’t collect health benefits while deferring pension and yes if you retire at 57 with only 15 years of service it will be a lifetime penalty of ~25% of your total pension (you get 5% less for each year that you retire before 62) also keep in mind you will not be eligible for COLA adjustments until you reach 62.

Is there a difference between 15 years of service and 20?

Correct me if I'm wrong, but retiring at 57 with 20 years wouldn't have made a difference regarding the penalty.

In general, as long as you're 62 and have a minimum of 5 years, you get to retire. The number of years naturally factors in how much you get.

[Anonymous]

57 vs 62 differences are really bad. The more you look into it the less you are likely to pull the plug at 57. Ask me how I know it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Under standard Fers- no, you can’t collect health benefits while deferring pension and yes if you retire at 57 with only 15 years of service it will be a lifetime penalty of ~25% of your total pension (you get 5% less for each year that you retire before 62) also keep in mind you will not be eligible for COLA adjustments until you reach 62.

Is there a difference between 15 years of service and 20?

Correct me if I'm wrong, but retiring at 57 with 20 years wouldn't have made a difference regarding the penalty.

In general, as long as you're 62 and have a minimum of 5 years, you get to retire. The number of years naturally factors in how much you get.

Eligibility Information
Age Years of Service
62 5
60 20
MRA 30
MRA 10
If you retire at the MRA with at least 10, but less than 30 years of service, your benefit will be reduced by 5 percent a year for each year you are under 62, unless you have 20 years of service and your benefit starts when you reach age 60 or later.

In general getting to 20 years allows a 60 year retirement, but OP just happens to hit 20 at 62 so no bueno.

[Anonymous]

Anonymous wrote:57 vs 62 differences are really bad. The more you look into it the less you are likely to pull the plug at 57. Ask me how I know it.

60 isn't so bad if you have 20 years of service but unfortunately it doesn't look like OP will.

[Anonymous]

If you are able to find another job with health insurance then you can do a deferred retirement where you don’t collect your pension or get health benefits until 62 but beginning at 62 you get an unreduced pension and health benefits.

[Anonymous]

Anonymous wrote:If you are able to find another job with health insurance then you can do a deferred retirement where you don’t collect your pension or get health benefits until 62 but beginning at 62 you get an unreduced pension and health benefits.

Sorry it’s postponed retirement not deferred retirement

https://fedemploymentattorneys.com/legal-blog/fers-deferred-retirement-vs-fers-postponed-retirement/

[Anonymous]

Try to hang in longer. Maybe look for a different job in the government. Remember, your high 3 will always be there so say if you are a GS-13 and you've been that for the last 3 years, you can look at GS-9 jobs. Your retirement will still be based on the original high 3. Lots of people do that. As a nurse, you probably have some other marketable skills to find something else to do in the government between age 57 and 62.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Under standard Fers- no, you can’t collect health benefits while deferring pension and yes if you retire at 57 with only 15 years of service it will be a lifetime penalty of ~25% of your total pension (you get 5% less for each year that you retire before 62) also keep in mind you will not be eligible for COLA adjustments until you reach 62.

OP here. Oh wow. It's worse than I thought. Thanks for clarifying.

I might have to rethink this plan.

Maybe try another area of nursing within the federal government? Different agency or even maybe public health?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Under standard Fers- no, you can’t collect health benefits while deferring pension and yes if you retire at 57 with only 15 years of service it will be a lifetime penalty of ~25% of your total pension (you get 5% less for each year that you retire before 62) also keep in mind you will not be eligible for COLA adjustments until you reach 62.

Is there a difference between 15 years of service and 20?

Correct me if I'm wrong, but retiring at 57 with 20 years wouldn't have made a difference regarding the penalty.

In general, as long as you're 62 and have a minimum of 5 years, you get to retire. The number of years naturally factors in how much you get.

Eligibility Information
Age Years of Service
62 5
60 20
MRA 30
MRA 10
If you retire at the MRA with at least 10, but less than 30 years of service, your benefit will be reduced by 5 percent a year for each year you are under 62, unless you have 20 years of service and your benefit starts when you reach age 60 or later.

In general getting to 20 years allows a 60 year retirement, but OP just happens to hit 20 at 62 so no bueno.

If I’m at 30 years before 62, do I avoid the penalty? (I’ll be there at 59.). I confess I find this remarkably confusing.

[Anonymous]

OP look into a ‘postponed’ retirement (which is different from a ‘deferred’ retirement). Avoids the penalty. But you don’t collect pension right away.