Meeting age and service requirements are two necessary conditions for annuities, especially in terms of an immediate and unreduced annuity. However, suppose you are looking to leave the employ of the federal government or were let go due to downsizing. In that case, you may be entitled to a postponed or deferred annuity if you don’t currently qualify for voluntary retirement. Although some agencies currently undergoing reorganization and substantial restructuring, among others, utilize voluntary early retirement to increase the number of eligible employees for retirement, it isn’t always the case.
Proposed annuities are available to FERS employees who meet specific criteria, including service requirements (under the MRA+10 provision) and the age requirement. Unfortunately, CSRS employees are not eligible to receive a proposed annuity. For FERS employees, though, individuals may choose to postpone receiving an annuity to another date to eliminate or reduce the age penalty should they fail to meet unreduced annuity requirements.
Annuities are calculated according to the FERS formula, depending on the length of service, unused sick leave, high-3 of your separation, and the remaining age penalty. Although you are ineligible for SRS, you can receive Social Security benefits and a COLA on FERS civil service benefits starting at 62. However, this does eliminate any FEHB and FEGLI coverage on the date of separation. Once your retirement begins, you may reenroll if you had previously been enrolled for five consecutive years prior to separation.
Deferred annuity eligibility is dependent upon a few circumstances for individuals planning to leave the government before reaching immediate annuity eligibility. Qualifications include a minimum of 5 years of civilian service and refraining from requesting a retirement contributions refund. Plus, individuals under FERS and CSRS are eligible based on your high-3 and length of service (at the point of separation). This case is much unlike voluntary retirement, where unused sick leave will not be used to calculate service time. Finally, those covered by CSRS can begin receiving their deferred annuity upon reaching 62, with an amount that will increase with annual COLAs.
However, more deferred annuity options are made available to those covered by FERS. These options include unreduced deferred annuity eligibility at age 62 with a minimum of 5 years of service, age 60 with a minimum of 20 years of service, or minimum retirement age with a minimum of 30 years of service. Upon meeting your MRA, you will become eligible for a reduced FERS annuity at the ten-year service mark. This reduction includes a 5% penalty for each year you were less than 62 years old at the point of separation. It is important to note that deferred retirees are ineligible to receive FERS SRS (special retirement supplement), which typically approximates the SS benefit earned during employment (paid up to 62).
Contact Information:
Email: [email protected]
Phone: 8007794183
Bio:
For over 20 years, Jeff Boettcher has helped his clients grow and protect their retirement savings. “each time I work with my clients, I’m building their future, and there are few things that are more important to a family than a stable financial foundation.”
Jeff is known for his ability to make the complex simple while helping navigate his clients through the challenges of making the right investment decisions. When asked what he is most passionate about professionally, his answer was true to character, “Helping my clients – I love being able to solve their problems. People are rightfully concerned about their retirement income, when they can retire, how to maximize their financial safety and future income.” Jeff started Bedrock Investment Advisors for clients who value a close working relationship with their advisors.
A Michigan native, Jeff grew up playing sports throughout high school and into college. While Jeff is still an ‘aging’ athlete, Jeff will take more swings on the golf course than miles running these days. He creates family time, often with weekly excursions to play golf, a hobby he shares with his three young children.
Disclosure:
Investment Advisory Services are offered through BWM Advisory, LLC (BWM). BWM is registered as an investment advisor and only conducts business in states where it is properly registered or is excluded from registration requirements. We are currently either state or SEC-registered in the following states: Arizona, Florida, Illinois, Kansas, Louisiana, Michigan, New York, Oregon, Texas, and Washington. Registration is not an endorsement of the firm by securities regulators and does not mean the advisor has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Although we make great efforts to ensure the accuracy of the information contained herein, we cannot guarantee all information is correct. Different types of investments involve higher and lower levels of risk. There is no guarantee that a specific investment or strategy will be suitable or profitable for an investor’s portfolio. There are no assurances that a portfolio will match or exceed any particular benchmark. Any comments regarding guarantees, safe and secure investments, guaranteed income streams, or similar refer only to fixed insurance and annuity products. They do not refer, in any way, to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company and are not offered by BWM Advisory, LLC. Guaranteed lifetime income is available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC-insured. Not affiliated with the U.S. Federal Government or any government Agency.
