By Reg Jones
Q: I recently read an article on the minimum retirement age in which the author states, “Here are some reasons that the MRA+10 option is not more popular than it is (other than the fact you’ll not be receiving an annuity for two years).” I’ve been considering the MRA+10 option for quite some time now, and this is the first that I have heard of not receiving and annuity for two years. In all of the literature I’ve read on MRA+10, I cannot find any mention of it. Do MRA+10 retirees have to wait two years to receive their annuity?
A: The statement you quoted makes no sense. If you retire under the MRA+10 provision, you would be entitled to an immediate annuity. However, it would be reduced by 5 percent for every year you were under age 62 unless you had at least 20 years of service and retired at age 60 or later. To reduce or eliminate the age penalty, you could retire and defer the receipt of that annuity to a later date.
Ronald Weeks Says:
July 9th, 2011 at 4:55 pm
I can find no supporting documentation for the statement concerning reduction based on at least 20 years of service. I beleive the reduction is based on age 62 regardless of the years of service. EX; MRA @ 56 with 23 years of service. The retiree takes an immediate MRA+10 annuity. The immedaite annuity will be reduced by 5% per year below age 62. A $1,000 full unreduced annuity based on High 3 and age 60 would be reduced to $700 beginning at age 56 under MRA+10. Your commentary would only reduce the annuity by 20%.