Retiring from the Feds at 57

[Anonymous]

Anonymous wrote:

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.

I think for you it's less of an issue because the 25% penalty isn't as much numerically for you as it would be for someone with 20 years. For you the value of getting to keep FEHB while retiring early probably exceeds the pension penalty.

[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.

Is this what is meant by the “golden handcuffs”?

[Anonymous]

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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.

But is also important to remember that from your MRA (for me 56.5) until you reach age 62, you get the FERS supplement which is totally free money. For me that is $25,000 per year completely free money. That more than makes up for any increase in pension by sticking around until 62. If I invest that $125K+ wisely, I can more than make up for staying in my government job for another 5.5 years. It's like being paid to not work!

[Anonymous]

Anonymous wrote:

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.

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.

But is also important to remember that from your MRA (for me 56.5) until you reach age 62, you get the FERS supplement which is totally free money. For me that is $25,000 per year completely free money. That more than makes up for any increase in pension by sticking around until 62. If I invest that $125K+ wisely, I can more than make up for staying in my government job for another 5.5 years. It's like being paid to not work!

Just keep in mind there’s a (fairly stringent) earnings test to receive the standard FERS supplement so it only applies if you aren’t planning to double dip and take another job after federal retirement. (And even if you don’t work at all post FERs retirement and claim the full supplement from ~57-62, whether or not that ends up being worth more than an extra 10% of a cola adjusted pension for the rest of your life is highly dependent on your salary, years of service, inflation, life expectancy, etc)

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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.

I think for you it's less of an issue because the 25% penalty isn't as much numerically for you as it would be for someone with 20 years. For you the value of getting to keep FEHB while retiring early probably exceeds the pension penalty.

It's true. The penalty is really de minimus. I'm glad to have the pension (and the survivor benefit for my spouse) but it's not the bulk of my plan. Getting FEHB back at 62 is a big, big deal, though.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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.

I think for you it's less of an issue because the 25% penalty isn't as much numerically for you as it would be for someone with 20 years. For you the value of getting to keep FEHB while retiring early probably exceeds the pension penalty.

It's true. The penalty is really de minimus. I'm glad to have the pension (and the survivor benefit for my spouse) but it's not the bulk of my plan. Getting FEHB back at 62 is a big, big deal, though.

If you draw the pension early I think you get to continue FEHB immediately. I'd double check but I think that's the tradeoff for getting the pension sooner with penalty.

[Anonymous]

Anonymous wrote:

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.

Is this what is meant by the “golden handcuffs”?

Haha, not even close.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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.

I think for you it's less of an issue because the 25% penalty isn't as much numerically for you as it would be for someone with 20 years. For you the value of getting to keep FEHB while retiring early probably exceeds the pension penalty.

It's true. The penalty is really de minimus. I'm glad to have the pension (and the survivor benefit for my spouse) but it's not the bulk of my plan. Getting FEHB back at 62 is a big, big deal, though.

If you draw the pension early I think you get to continue FEHB immediately. I'd double check but I think that's the tradeoff for getting the pension sooner with penalty.

Please, please go to retirement training- there is misinformation in here. Fed with 32 years and is 54.

[Anonymous]

Im looking to switch to fed job mid career with hopes of health insurance carrying into retirement. Are these retirement trainings something routinely offered to federal employees? Or are there private pay workshops?