As a federal employee under FERS, you pay into a retirement system while employed so that you can draw a pension in retirement. If you’re thinking about retiring and attempting to plan ahead, it is critical to have an idea of what this pension could be. Retirement Benefits Institute provides a FERS annuity calculator for this very purpose. One of the four required fields in our FERS annuity calculator is your estimated age at retirement. Let’s look at how your estimated age at retirement factors in to our FERS annuity calculator.
FERS employees generally have to reach one of three age and length of service requirements to be retirement eligible. First, you can retire at Minimum Retirement Age (MRA) with at least thirty years of service. For details on what your Minimum Retirement Age is, click here. The second age and length of service requirement is age sixty with at least at twenty years of service. Last is age sixty-two with at least five years of service.
These requirements are listed below:
- MRA with at least 30 years of service
- Age 60 with at least 20 years of service
- Age 62 with at least 5 years of service
Upon fulfilling the age and length of service requirements, you can retire from the federal government with full benefits. This means getting an unreduced pension, having the potential to keep FEHB and FEGLI, and receiving the Special Retirement Supplement (if retiring before age sixty-two). If you do not meet the requirements listed above, it doesn’t necessarily mean you can’t retire, but if you choose to retire you may have reduced benefits. You can retire when you reach your Minimum Retirement Age with at least ten years of service and less than thirty years; however, this option comes with significant reductions to your benefits. To learn more about this MRA +10 option, click here.
Age sixty-two and the enhanced annuity
FERS employees who reach age sixty-two with at least twenty years of service get the FERS enhanced annuity. The FERS enhanced annuity means your annuity will be equal to 1.1% of your high-three average salary for each year of service rather than 1% of your high-three average for each year of service.
If David waits until age sixty-two to retire, he will rack up two more years of federal service and be allowed to retire under the enhanced FERS annuity formula. Let’s assume that his high-three average has now increased to $103,000; this raises his gross monthly federal annuity to $3,021 ($103,000 x 1.1% x 32 years of service = $36,256 annually).
Understanding how your estimated age at retirement impacts your pension is vital to planning for a successful retirement. Our FERS calculator is a useful tool that can help you get a reasonable idea of your pension in retirement and aid in making retirement a reality.
To obtain your personalized pension calculation, click here now!