If You’re in a Special Retirement Category, These Mistakes Could Cost You Thousands

Key Takeaways

• Special retirement provisions for public safety employees and other select roles come with unique rules that differ from standard FERS retirement. Missing key deadlines or misunderstanding your eligibility could lead to significantly reduced benefits.

• From incorrect service credit calculations to ignoring required minimum distributions, these mistakes can cost you thousands over the course of your retirement.

What Makes Your Retirement “Special”

• Also Read: How Civilian Employees Can Turn Military Time Into a Bigger FERS Pension
• Also Read: Dropping FEGLI Sounds Smart—Until You Realize What It No Longer Covers After Retirement
• Also Read: Hitting 20 Years in Law Enforcement? Here’s What You Can Expect From Your Pension

If you work in a role classified under a special retirement category—such as a federal law enforcement officer, firefighter, air traffic controller, or nuclear materials courier—you fall under enhanced provisions within the Federal Employees Retirement System (FERS). These roles typically allow for retirement after 20 years of service at age 50, or at any age with 25 years of qualifying service.

This accelerated eligibility sounds like a great deal—and it is. But it also brings unique conditions and timelines that you need to follow closely. Missteps can result in a lower annuity, delays in receiving benefits, or disqualification from supplemental income.

1. Misunderstanding the Minimum Service Requirements

Special retirement categories require 20 years of covered service in a qualifying position. That service must be continuous unless properly interrupted and documented. Here’s where many employees go wrong:

• Assuming non-covered time counts toward the 20-year requirement

• Transitioning to a non-special category job without completing the 20-year threshold

• Not properly documenting a break in service

To ensure you meet the requirement, maintain detailed records and check your SF-50 forms. Your agency’s HR office can help confirm whether your service counts toward special retirement.

2. Overlooking Mandatory Retirement Ages

In 2025, most federal employees in special retirement positions face mandatory retirement at age 57. If you don’t meet the 20-year threshold by then, you could be forced out without full eligibility.

Exceptions apply if you had breaks in service or entered the role later in life, but they must be documented and approved. Planning ahead ensures you won’t be caught off guard.

3. Miscalculating Your Annuity

Your annuity under FERS is more generous if you’re in a special category:

• 1.7% of your high-3 average salary for the first 20 years

• 1.0% for any additional years

Mistakes arise when:

• You assume the 1.7% applies to all years of service

• You rely on outdated high-3 salary projections

• You forget to include certain types of leave or overtime in your high-3 calculation

Request an estimate from your agency or use OPM’s annuity calculator to verify your numbers.

4. Missing Out on the FERS Special Retirement Supplement

If you retire before age 62 and meet the criteria, you’re eligible for the FERS Special Retirement Supplement—a payment that bridges the gap until you can receive Social Security.

To qualify:

• You must retire under special provisions

• You need at least one full calendar year of covered service after transferring to FERS (if you were originally under CSRS)

• You must not exceed the annual earnings limit from outside work ($23,480 in 2025)

Missing these can disqualify you from the supplement, costing you thousands per year.

5. Delaying Military Buyback Decisions

If you served in the military before joining federal service, you may be eligible to buy back that time and have it count toward your retirement.

This is especially important for special retirement positions, where hitting 20 years is critical. Waiting too long can:

• Increase your out-of-pocket cost due to accumulated interest

• Cause delays in crediting your service

• Potentially disqualify you from enhanced benefits if not completed before retirement

The buyback process typically takes months, so start at least a year before you plan to retire.

6. Underestimating the Cost of Health Insurance in Retirement

Keeping your Federal Employees Health Benefits (FEHB) coverage in retirement requires that you:

• Be enrolled for the 5 years immediately before retiring (or since first eligibility)

• Retire on an immediate annuity

Special category employees often retire earlier than standard FERS employees, but retiring too soon or under the wrong type of separation can make you ineligible for FEHB in retirement. That would mean paying full market rates for private insurance—potentially thousands of dollars more annually.

Verify your FEHB eligibility with your HR office before finalizing your retirement.

7. Forgetting to Elect Survivor Benefits

Electing a survivor annuity ensures your spouse or eligible dependents continue to receive income after your death. If you don’t make this election at retirement:

• Your spouse may lose FEHB coverage

• Survivor annuity payments won’t be available

• You can only change your election within specific timeframes and under limited circumstances

This mistake is irreversible in many cases. Review your options carefully during the retirement process.

8. Ignoring Required Minimum Distributions (RMDs)

Once you turn 73 in 2025, you must begin taking Required Minimum Distributions (RMDs) from your Thrift Savings Plan (TSP) and any other retirement accounts.

Failing to take RMDs results in a steep penalty—25% of the amount you should have withdrawn.

Plan ahead by:

• Reviewing your TSP balance annually

• Setting up automatic withdrawals

• Consulting a financial advisor if you have multiple accounts

9. Failing to Coordinate Social Security and Annuity Income

Your FERS annuity and Social Security benefits can interact in unexpected ways. If you’re not aware of how timing affects your income, you may:

• Miss out on the optimal claiming strategy

• Trigger IRMAA surcharges on Medicare Part B if your combined income exceeds certain thresholds ($106,000 individual/$212,000 couple in 2025)

• Lose a portion of your FERS Special Retirement Supplement due to outside earnings

Coordinating both streams of income takes planning. Consider speaking with a retirement counselor or a licensed agent to review your options.

10. Assuming Your Retirement Timeline is Fixed

Even if you’re on track for special category retirement, personal or professional changes could shift your plans. These may include:

• Promotions into non-covered positions

• Health concerns

• Changes in mandatory retirement policy

• Transfers between agencies

Always have a backup plan. Revisit your retirement goals annually and stay in contact with your HR office to ensure your path still aligns with your objectives.

Planning Ahead Protects Your Retirement

If you’re in a special retirement category, you’ve earned the right to retire earlier with better benefits—but that comes with stricter rules and higher stakes. Mistakes here aren’t just minor oversights. They can lead to delayed benefits, reduced income, or even loss of essential coverage.

Take time to review your service record, understand the annuity formula, verify your FEHB eligibility, and plan for taxes and RMDs. And most importantly, don’t go it alone.

Speak with a licensed agent listed on this website to get professional guidance tailored to your specific role and retirement goals.