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Question for Federal Employees. I will have 20 years of creditable service at age 61. Does it make sense to retire early (i.e. Age 58), but defer taking my annuity until age 61; take the 15% hit for retiring early and begin drawing the annuity immediately; or continue to work until age 61. This would be based on the assumption that I have nonretirement assets that could cover me for that three year period. There would be no measurable difference in high-three salary computation. Medical insurance would be a non-issue as I am retired military, and have Tricare. Has anyone faced this scenario? What did you do? Would you do it again?
As a general rule, I would suggest the option that gives you the higher monthly income. That is what you will live on month to month. The concept of total lifetime income only makes sense if you are an accountant.
Why? Because what your monthly income amount is about is where you live. It is practical, not conceptual. It what pays the bills.
Hi, I co-op for NASA during my college years, pretty much a federal government employee, but obviously not continuously due to school for 6 years. I am looking to go back into the federal government again (the Navy). How do those co-oping years calculate into my retirement? thanks
Because, I'm not even sure I want to wait until 61. Lol Financially, it is obviously better to wait as long as possible (even longer than 62), but money isn't everything. I'm just trying to look at options.
My FERS training manual indicates that if you want to take the annuity at age 58 with reduction, this would be an MRA + 10 Retirement and the annuity would be reduced 5% for each year under age 62 for a total of 20%, not 15%.
Also if you retire at age 61 with 20 years of service, you would be eligible for 1 year of the FERS supplement - about 50% of the estimated Social Security benefit at age 62 (e.g., $10K). This is the supplement to "replace" Social Security until you are eligible to file at age 62. With deferred retirement or MRA +10, you do not receive the supplement.
Last edited by ABQ2015; 03-29-2015 at 09:28 PM..
Reason: Added note on FERS supplement.
My FERS training manual indicates that if you want to take the annuity at age 58 with reduction, this would be an MRA + 10 Retirement and the annuity would be reduced 5% for each year under age 62 for a total of 20%, not 15%.
Also if you retire at age 61 with 20 years of service, you would be eligible for 1 year of the FERS supplement - about 50% of the estimated Social Security benefit at age 62 (e.g., $10K). This is the supplement to "replace" Social Security until you are eligible to file at age 62. With deferred retirement or MRA +10, you do not receive the supplement.
Yes, so true. I'm retiring at 60 with 20 due to the special supplement.
My FERS training manual indicates that if you want to take the annuity at age 58 with reduction, this would be an MRA + 10 Retirement and the annuity would be reduced 5% for each year under age 62 for a total of 20%, not 15%.
Also if you retire at age 61 with 20 years of service, you would be eligible for 1 year of the FERSsupplement - about 50% of the estimated Social Security benefit at age 62 (e.g., $10K). This is the supplement to "replace" Social Security until you are eligible to file at age 62. With deferred retirement or MRA +10, you do not receive the supplement.
The OP will have only 20 years. The FERS supplement is pro-rated based on a full career of Social Security being 40 years. So 20 years/40 years is 50%. Most retirees have career service of 30 years or more.
and if you get another job that exceeds $15K a year I think, the supplement is withheld. Goes back to the SS earnings thing.
OP, I would hang in as long as I could or until 62. if at all possible. some jobs are not worth the pain.
but good luck.
as a retired FERS employee, it was worth it to me
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