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Here’s What Happens When You Take FERS Early Retirement Before Age 60

Ali Syed
March 31, 2025

Key Takeaways

Taking early retirement under FERS before age 60 significantly affects your pension amount, health coverage options, and eligibility for key benefits.
While you can retire as early as your Minimum Retirement Age (MRA), doing so without 30 years of service means accepting permanent reductions in your pension.

Understanding Early Retirement Under FERS

If you’re considering retiring under the Federal Employees Retirement System (FERS) before turning 60, you’re not alone. Many government employees look at early retirement as a way to enjoy more freedom or to start a second career. But before you submit that application, it’s critical to understand how stepping away early impacts your benefits.

In 2025, early retirement under FERS is possible if you meet the Minimum Retirement Age (MRA), which ranges from age 55 to 57 depending on your year of birth. However, unless you have at least 30 years of creditable service at your MRA—or 20 years at age 60—you’ll be subject to reduced benefits.

Eligibility Basics: Know Your MRA

Your Minimum Retirement Age depends on your birth year:

Born before 1948: MRA is 55
Born between 1953–1964: MRA is 56
Born in 1970 or later: MRA is 57

If you meet your MRA with fewer than 30 years of service, you’re eligible for what’s known as the MRA+10 provision. This allows you to retire, but your annuity will be permanently reduced.

How the MRA+10 Retirement Works

The MRA+10 option is available if you:

Are at least your MRA
Have at least 10 years of creditable service

You can choose to retire under MRA+10, but your FERS pension will be permanently reduced by 5% for each year you are under age 62. For example:

If you retire at 57 with 20 years of service, your annuity is reduced by 25% (5 years x 5%).

You can postpone receiving your pension to lessen the penalty, but this also means you’ll delay health and life insurance benefits.

Health Insurance and FEHB Implications

Retiring before age 60 can affect your eligibility to continue Federal Employees Health Benefits (FEHB) coverage. Here’s what you need to know:

You must be eligible for an immediate annuity to continue FEHB into retirement.
If you postpone your annuity, you also postpone FEHB coverage.
You must have been enrolled in FEHB (or covered under a family member’s plan) for at least 5 consecutive years before retirement.

This means if you retire at your MRA under the MRA+10 rule and delay your annuity to reduce the penalty, you won’t have FEHB coverage during the postponement period.

What Happens to the FERS Supplement?

The FERS Special Retirement Supplement (SRS) is designed to bridge the gap between your FERS retirement and your eligibility for Social Security at age 62. But not all early retirees qualify.

You are not eligible for the FERS Supplement if:

You retire under MRA+10
You voluntarily separate before age 60 without at least 20 years of service

The supplement is generally only available if you retire under a voluntary unreduced retirement, such as:

At MRA with 30 years of service
At age 60 with 20 years
At age 62 with 5 years

How Your Pension Is Calculated Early

Under FERS, your pension is calculated as:

1% of your High-3 average salary multiplied by your years of creditable service

If you retire at age 62 or later with at least 20 years of service, the multiplier increases to 1.1%.

Example:

Retiring at age 57 with 25 years of service and a High-3 average of $80,000:
- Pension = 1% x 25 x $80,000 = $20,000 annually
- Reduction = 5% x 5 years = 25%
- Final pension = $15,000 annually

This reduction is permanent and will not be reversed even when you turn 62 or begin Social Security.

Delaying Your Annuity: Pros and Cons

You can avoid the age-related reduction by postponing your annuity. For example, you might retire at 57 but delay receiving your pension until 60 or 62.

Pros:

Avoid or reduce the 5% per year reduction
May preserve eligibility for full pension amount

Cons:

No income from your pension until the deferred date
No access to FEHB or FEGLI coverage during the deferral period

This is a balancing act. If you have other income or coverage sources during the delay, postponement might be worthwhile.

Impact on Social Security Timing

Since the FERS supplement isn’t available under MRA+10, you’ll need to wait until age 62 to claim Social Security.

Even then, claiming Social Security at 62 will result in reduced benefits compared to waiting until your Full Retirement Age (FRA), which is 67 for those born in 1960 or later.

If you rely on early retirement under FERS, plan for a lower income stream until Social Security becomes available.

Penalties Are Permanent, Not Temporary

One of the most misunderstood aspects of early FERS retirement is the permanence of reductions.

The 5% per year reduction for retiring under age 62 is permanent.
Even when you reach age 62, your annuity does not increase.
Unlike Social Security, there is no automatic adjustment for waiting after retirement.

Make sure you understand that these cuts apply for life.

Early Retirement for Special Categories

Law enforcement officers, air traffic controllers, and firefighters have different retirement rules under FERS.

They can retire at age 50 with 20 years of service, or at any age with 25 years.
Their annuity formula uses a 1.7% multiplier for the first 20 years and 1% thereafter.
They qualify for the FERS supplement automatically if under age 62.

If you’re in a special category, your early retirement doesn’t face the same reductions as regular employees.

Survivor Benefits and COLAs

Even if you retire early, you can elect survivor benefits for your spouse. This will reduce your pension, but ensures continued income for your survivor.

Also, retirees under age 62 generally don’t receive cost-of-living adjustments (COLAs) until age 62, unless you’re in a special retirement category.

This can further reduce your pension’s purchasing power over time.

Steps to Take Before You Retire Early

Before finalizing your early retirement decision, take these important steps:

Calculate your pension using multiple scenarios (immediate vs. postponed)
Verify FEHB and FEGLI eligibility if you want to keep federal insurance
Review your Social Security statement for age-based benefit comparisons
Consult with your HR specialist for personalized figures
Meet with a licensed agent to assess supplemental retirement income options

Taking early retirement might offer you freedom, but it can also lock in lower benefits. Make your decision with all the facts in hand.

What It Means to Retire Before 60 Under FERS

Retiring under FERS before age 60 is entirely possible, but it comes with trade-offs. Your pension is smaller, health coverage may be delayed, and there’s no bridge payment like the FERS supplement. But with proper planning, early retirement can still be a viable and satisfying option.

If you’re thinking about retiring early, speak with a licensed agent listed on this website to help you weigh your options and understand how your choices affect your future.