Retiring from the Feds at 57

[Anonymous]

NP here- can someone explain “postponed retirement”? Do you get the health benefits right away or are those postponed too? And is the pension $ unreduced if you retire at 57 but don’t collect until 62? That sounds like a good deal.

[Anonymous]

Anonymous wrote:

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/

OP here. Yes, this is what I was going to do to get the unreduced pension, BUT I wanted my health benefits to continue when retiring at 57. That's the real sticking point.

And the benefits concern is not really for me, but for my medically stable (but medically complicated) son who will be starting college around the time I planned on retiring.

He may need a surgery in his young adulthood, and I don't want to chance it by getting rinky dink insurance in that five year time span from 57 to 62, should he need it during those years.

But I like the idea of doing a GS 9 job in that five years...if I can get hired at that level.

[Anonymous]

Also, age discrimination happens and it is much worse outside the civil service. So at age 50 or higher there are invisible impediments to finding any new job.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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/

OP here. Yes, this is what I was going to do to get the unreduced pension, BUT I wanted my health benefits to continue when retiring at 57. That's the real sticking point.

And the benefits concern is not really for me, but for my medically stable (but medically complicated) son who will be starting college around the time I planned on retiring.

He may need a surgery in his young adulthood, and I don't want to chance it by getting rinky dink insurance in that five year time span from 57 to 62, should he need it during those years.

But I like the idea of doing a GS 9 job in that five years...if I can get hired at that level.

It seems like you have at least five years before 57 so take some time and figure out how your current skills can transfer elsewhere and if they are lacking take some classes or training to make yourself marketable. I don’t know where you work now and exactly what you do but look at FEMA, HHS, NIH, Defense, etc. My agency has an Accommodations and Disabilty Coordinator, look for jobs like that in OHR around the government or the Emergency Preparedness Specialists.

[Anonymous]

Anonymous wrote:

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.

MRA+30 means no penalty so yes you can retire at 59 with no penalty.

[Anonymous]

MRA+30 at 57, do you still get the COLA adjustment?

[Anonymous]

Anonymous wrote:MRA+30 at 57, do you still get the COLA adjustment?

I just retired from the fed gov with 34 years at my MRA (56.5 years old). I immediately started collecting my pension plus I receive the FERS supplement until I am 62. However, the COLA on pension does not begin until age 62, so until then, my pension will remain frozen at the retirement value. Once I turn 62, I will start receiving the COLAs.

There is a former federal CPA who has excellent free articles that address many of these issues named Chris Barfield. I paid him to run my retirement numbers for me. His website is https://www.barfieldfinancial.com/new-blog

Another excellent resource who summarizes everything that you'd ever need to know about federal retirement, which I found very helpful in my 5 years leading up to retirement is Dan Jamison's FERSGuide: https://www.amazon.com/FERSGUIDE-Dan-Jamison-CPA/dp/B08P8D7676

[Anonymous]

Anonymous wrote:

Anonymous wrote:MRA+30 at 57, do you still get the COLA adjustment?

I just retired from the fed gov with 34 years at my MRA (56.5 years old). I immediately started collecting my pension plus I receive the FERS supplement until I am 62. However, the COLA on pension does not begin until age 62, so until then, my pension will remain frozen at the retirement value. Once I turn 62, I will start receiving the COLAs.

There is a former federal CPA who has excellent free articles that address many of these issues named Chris Barfield. I paid him to run my retirement numbers for me. His website is https://www.barfieldfinancial.com/new-blog

Another excellent resource who summarizes everything that you'd ever need to know about federal retirement, which I found very helpful in my 5 years leading up to retirement is Dan Jamison's FERSGuide: https://www.amazon.com/FERSGUIDE-Dan-Jamison-CPA/dp/B08P8D7676

Thank you so much!

[Anonymous]

You can get Obamacare under the Affordable Health Care Act but I find it is pricey. I'm paying $1400 per month as a 63 year old female for my Affordable Health Care.

healthcare.gov

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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.

MRA+30 means no penalty so yes you can retire at 59 with no penalty.

Not the PP, but I too will have 30 yrs at age 59 and have already maxed out as a GS 15, so in that case, is there any reason to stay past age 59? Am I leaving anything on the table by leaving then? I too find this confusing.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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.

MRA+30 means no penalty so yes you can retire at 59 with no penalty.

Not the PP, but I too will have 30 yrs at age 59 and have already maxed out as a GS 15, so in that case, is there any reason to stay past age 59? Am I leaving anything on the table by leaving then? I too find this confusing.

Your multiplier is 1.1 age 62.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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.

MRA+30 means no penalty so yes you can retire at 59 with no penalty.

Not the PP, but I too will have 30 yrs at age 59 and have already maxed out as a GS 15, so in that case, is there any reason to stay past age 59? Am I leaving anything on the table by leaving then? I too find this confusing.

Another plea for federal employees to please!!! enroll in retirement seminars (preferably well before nearing retirement age) rather than crowdsourcing on line so that you can get the most up to date accurate facts + any relevant details specific to your agency.

However, in general under standard fers if you wait to retire until 62 to retire you will get 1.1% of your high three x year of service instead of 1% (so as a maxed 15 in dc instead of collecting a pension 59,600/year starting at 59 you would collect $69,700/ year if you worked until 62 not factoring in any COLA raises during that timeframe.)

Obviously whether or not that amount is worth the extra 3 years depends on your project projected life expectancy and whether you plan to take on secondary work (ie double dip) while collecting pension.

[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.

depends how good you are at work and if you are enjoying yourself. If you are just counting like days like 2/3 of feds then do yourself a favor and get a private job. Some challenge might do you some good.

[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.

I’m out at MRA+10, which in my case is 58. Entered after 20 years in private sector. I sat down with a financial planner with this goal in mind—it’s doable for me and I’m doing it.

There is no federal role I could be paid for that would convince me to take what are likely to be the four healthiest years of retirement and throw them on the pile.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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.

MRA+30 means no penalty so yes you can retire at 59 with no penalty.

Not the PP, but I too will have 30 yrs at age 59 and have already maxed out as a GS 15, so in that case, is there any reason to stay past age 59? Am I leaving anything on the table by leaving then? I too find this confusing.

Your multiplier is 1.1 age 62.

That extra ten percent effectively pays for the survivor benefit, if there’s a spouse to consider.