By Reg Jones
5 percent penalty
December 14th, 2012 | Uncategorized
Q. I will be 60 years old in February. I will have 16 years and five months of total service with Customs and Border Protection and am covered for retirement with FERS. What does the 5 percent penalty mean “if I retire under the age of 62”? Does this apply only to my Social Security benefits or my FERS retirement? I will not ask for any Social Security benefits until I reach the age of 62. I am also retired from the military with 20 years of total service.
A. Because you have fewer than 20 years of service, you’d be retiring under the MRA+10 provision (minimum retirement age with at least 10 years of service). As such, your annuity would be reduced by 5 percent for every year you are under age 62 (5/12 percent per month). The fact that you are retired military is irrelevant.
Tags: 5 percent-per-year penalty, annuity reduction, FERS, military service, MRA+10, RETIREMENT, SOCIAL SECURITY
Comments
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Ken Says:
December 14th, 2012 at 2:05 pmAnother option not discussed is to combining 20 years plus 16 would give 36 years and no 5% reduction because the MRA for 30 years is 56.