Ask The Experts: Retirement

By Reg Jones

FERS retirement

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Q. I have 13 years as a federal worker under FERS at GS 10. I left federal service at age 48. Am eligible to collect any type of federal retirement and how does age play a role? Read the rest of this entry »

FERS annuity supplement

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Q. Am I eligible to receive the FERS annuity supplement at age 60? I resigned federal service at age 52 with more than 20 years of service. Would this FERS annuity supplement apply to my situation or only to current employees? Read the rest of this entry »

FERS retirement

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Q. I have two years of temporary services. What are the pros and cons of buying back the temporary time?
I am approaching my 27th year of government services in June. Under FERS, at what age can I retire and get my TSP monies without being penalized? Read the rest of this entry »

Military buyback/FERS annuity

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Q. I will be 59 in July 2014. My SCD is 9/1/78. I have 13 years active duty military time that I bought back and 23 years Federal Civil Service time for a total of 36.9 years. If I retire at 59.5 in January 2015, would I be eligible for the FERS supplement based on Active duty and Federal Civil Service time, or should I wait until age 60 and I will have 23.6 years FERS time? I am completely confused about what to do and I am being told different things by my Personnel Office. Read the rest of this entry »

FERS supplement forecast

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Q. I am planning to retire at the end of August. It is rumored that the FERS supplement will be discontinued. My retirement plans depend on the supplement being available when I retire.  What are the chances that Congress will eliminate the supplement in the next six months? If I receive it and they discontinue it in 2015, will I continue to receive it?

A. I’m not a fortune teller, so I can’t predict the future. However, I can tell you that when Congress does enact a bill that takes something away, it does it prospectively. And, since that proposal never went anywhere in the last session of Congress, it’s unlikely to resurface and be enacted in this session. Further, the odds against Congress taking away a benefit that retirees are already receiving are slim, indeed.

FERS disability

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Q. I have 31 years in FERS, including seven years military buyback. I have an MRA of 58. I am 80 percent service connected VA. I am having issues doing my job due to service-connected and other disabilities acquired during my employment. Can I collect 100 percent unemployment and still retire FERS or do I have to file FERS disability? Read the rest of this entry »

Buying back time for military service

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Q. I am trying to get information regarding the buyback program. I served in the military for four years and got medically retired. I receive compensation from Veterans Affairs, so I thought that it would be a good idea to buy back my time. Could you tell me if this buyback is beneficial for a FERS employee? Read the rest of this entry »

FERS vesting

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Q. I had three years of federal service from May 2010 to June 2013, and left federal service. I also had four years of military service time, which I bought back. I have recently been hi ed for a part-time position with the federal government. If I work two years of part-time service, will I meet the five-year vesting requirement for FERS retirement? Also, will the two years of part-time federal service only count as one year toward the annuity calculation? Read the rest of this entry »

Calculating CSRS, FERS annuities

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In my last two columns I described the kinds of active duty service in the armed forces that are potentially creditable in your CSRS or FERS annuity, and what you have to do to get that credit. This time I’ll quickly go over the rules governing the computation of CSRS and FERS annuities for most federal employees. That way you’ll be able to see what the difference would be between a pure civilian annuity and one that includes credit for active duty service for which you’ve made a deposit.

Eligibility rules

Under CSRS, you can retire immediately if you are age 55 and have 30 years of service, 60 with 20 or 62 with 5. Under certain circumstances, you can retire at age 50 with 20 years of service or, if you have 25 years of service, at any age. However, your annuity will be reduced by 1/6 of a percent for each month you are under age 55. That’s 2 percent per year.

Under FERS, you can retire immediately at your minimum retirement age (MRA) with 30 years of service, 60 with 20 or 62 with 5, You can also retire at your MRA with at least 10 years of service but fewer than 30. However, if you retire under the MRA+10 provision and have fewer than 20 years of service, your annuity would be reduced by 5 percent for every year you were under age 62, age 60 if you had at least 20 years of service.

You could also retire early at age 50 with 20 years of service or, if you have 25 years of service, at any age. However, unlike CSRS retirees, there wouldn’t be any age penalty.

Note: To find out which kinds of active duty service in the armed forces are considered creditable and under what conditions, go to www.opm.gov/retirement-services/publications-forms/csrsfers-handbook/c022.pdf. To find out the same thing about civilian service, go to www.opm.gov/retirement-services/publications-forms/csrsfers-handbook/c020.pdf.

CSRS computation

Here’s how you compute a CSRS annuity:

*  1.5% x your high-3 x 5 years of service, plus
* 1.75% x your high-3 x 5 years of service, plus
* 2% x your high-3 x all remaining years and full months of service

This formula generates the basic annuity amount, which cannot exceed 80 percent of your average high-3 salary. However, unused sick leave is not included in that 80 percent limitation.

Two simple examples will illustrate the difference between making a deposit for four years of active duty service and not doing so. For simplicity’s sake, we’ll say your high-3 is $100,000 and you have 30 years of actual service.

* Without a deposit, your annuity would be $56,150.
* With a deposit, your annuity would be $64,250.

FERS computation

Here’s how to compute a FERS annuity:
.01 x your high-3 x all years of service
If you are age 62 and have at least 20 years of service, use this formula:
.011 x your high-3 x all years of service

Once again, some simple examples will illustrate the difference between making a deposit for four years of active duty service and not doing so. And I’ll use the same high-3 – $100,000 – and 30 years of actual service.

* Without a deposit, your annuity would be $30,000.
* With a deposit, your annuity would be $34,000.

If you were entitled to the .011 multiplier

* Without a deposit, your annuity would be $33,000.
* With a deposit, your annuity would be $37,400.

Note: Whether you are covered by CSRS or FERS, unused sick leave can’t be used to make you eligible for retirement. It can only be added to your years of service after you meet the age and service requirements.

The special retirement supplement

Because FERS is a retirement system that includes Social Security, if you retire before age 62, you’ll be entitled to the special retirement supplement, unless you are retiring under the MRA+10 provision.

The SRS approximates the amount of Social Security benefit you earned while a FERS employee. It doesn’t include periods of active duty service, whether or not you have made a deposit.

Using the FERS example above, if you are a FERS employee with 30 years of actual service and have made a deposit to get credit for your active duty service. That time will be included when determining your total years of service and used in your annuity computation. However only your actual service will be used in calculating your special retirement supplement. That’s because the SRS is paid out of the Civil Service Retirement and Disability Fund, not the Social Security Fund. However, when you apply for a Social Security benefit, it will be based on all your years of Social Security-covered employment.

A word about special category employees

Law enforcement officers, firefighters and air traffic controllers may retire at age 50 with 20 years of covered service. FERS employees may also retire at any age with 25 such years. All special category employees receive an enhanced benefit for which they pay by contributing more to the retirement system.

The rules for crediting are the generally the same for special category employees as they are for all other employees. However, there are a few variations on those rules. First, active duty service that precedes employment as a special category employee can’t be used to meet the years of service requirements for the enhanced benefit. Second, active duty service that interrupts a special category career is creditable toward the enhanced benefit, but only if the employee returns to a covered position and makes a deposit for that time.

Survivor annuity election

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Q. I will be retiring the end of May. My wife and I are both federal employees, and she will continue to work for another year and a half.  We are both FERS employees. We’re on the fence regarding a spousal annuity. If I were to leave her a full spousal annuity, would I be able to change that to a partial at a later date?  Read the rest of this entry »

FERS supplement after MRA

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Q. I retired at 52 under FERS as a law enforcement agent after 27 years of federal service. I immediately began my second career working outside federal government.  My monthly annuity includes the FERS supplement. I reached my minimum retirement age of 56 last month, but the supplement is still included in my monthly annuity.  I make more than the “needs tested” amount annually but am still receiving the FERS supplement.

Should the FERS Supplement disappear the month following your MRA birth month? Is it removed by OPM automatically, or does OPM continue to pay the supplement? How exactly is the FERS supplement needs tested? Is it incumbent upon me to notify OPM? How does this work? I don’t want to collect the payment if I’m not eligible, and I certainly don’t want to be surprised with a bill from OPM for these payments at the end of the year.  Read the rest of this entry »

FERS MRA+10 and heath coverage

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Q. If my wife chose to retire now, at her minimum retirement age of 56 with 13 years of FERS service, would she be able to postpone her annuity until age 60?  She currently carries FEHB (self), as long as she has had it the last five years, can I pick her up under my FEHB (self+1 or family) once she retires and then when she becomes 60 she can reinstate her own self-plan at that point? Read the rest of this entry »

Disability and deferred retirement

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Q. I am a FERS employee with the Defense Logistics Agency and have 22 years of service. I turn 50 on Sept. 30. I am considering deferred retirement when I turn 50. What penalties would be applied if my minimum retirement age is 56? I am 100 percent  VA disabled total permanent, but not sure I want to go through another disability battle with OPM. Read the rest of this entry »

Leaving federal service

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Q. I am a federal employee (FERS employee from January 1988 to the present) who will likely be leaving federal employment for a private sector position in a different city. What happens to the following:
1. Can I either leave my money in the TSP account or roll it over; in any case, I am not touching the balance until I retire.
2. Am I correct that my retirement annuity freezes until I actually retire and that it would be based on the following calculation — years of service (.26) x the average of the high-3 annual salary?
3. Do I get a lump sum payout for annual leave?
4. Can I get my sick leave back if I return to federal service?
5. I know health care terminates after 30 days. But am I eligible to get any Federal health care after I retire from the private sector?

Read the rest of this entry »

Planning for retirement

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Q. I will be 62 the end of June this year. I am in FERS, would like to retire this year and am trying to make a sound decision regarding what date would be best.
1) I have 918 sick hours accumulated. Will they convert 100% into service time?
2) When trying to calculate how much I will get for retirement, is it based on basic pay or total pay with locality adjustment?
3) Is there any penalty if I retire at age 62 if I have less than 20 years of FERS service?
4) Is there any offset with Social Security? Read the rest of this entry »

FERS retirement calculations

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Q. You recently stated in your posts you can receive your FERS retirement benefits calculated at the rate of .011 with 20 years of service, at age 62. Does this benefit rate of 1.1, apply if you left your employment before the MRA (resigned), have more than 20 years of service and elect to receive a deferred retirement at age 62? At age 60, benefits are calculated at .01. Is there a choice? Read the rest of this entry »

Surviving spouse’s retirement benefits

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Q. My husband retired under CSRS, and I expect to retire under FERS in a few years. When he retired, he elected survivor benefits for me, and I will do the same for him. What will be the rate the survivor will receive: only their benefit or their benefit plus the survivor portion? The answer will make a big difference in how comfortable we can live in retirement, before and after one of us passes. Read the rest of this entry »

FERS retirement multiplier

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Q. A recent post stated you can receive your FERS retirement benefits calculated at the rate of .011 with 20 years of service at age 62. Does this benefit rate of 1.1, apply if you resigned your employment before the minimum retirement age, have more than 20 years of service and elect to receive a deferred retirement at age 62? At age 60, benefits are calculated at .01. Is there a choice? Read the rest of this entry »

FERS Pension after buyout

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Q. I worked for the federal government as a FERS employee for 14 years and then took a buyout and left my position. Will I receive my full pension at age 62 based on my high-3 at the time I left? Read the rest of this entry »

OWCP and FERS disability retirement

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Q. I was approved for FERS disability retirement but remained on Worker’s Comp. and yet to take the FERS disability retirement. I had 18 1/2 years at air traffic control. When I reach age 62 and the FERS is recalculated, is the time on OWCP counted for that calculation? Read the rest of this entry »