Federal Law Enforcement Officers, Here’s How You Can Retire Early Without Losing Benefits

Joshua Melendez
March 1, 2025

Key Takeaways:

You Can Retire Early with Financial Security: Federal Law Enforcement Officers have pathways to retire early without losing out on important benefits.
Optimize Your Retirement Planning Now: Maximize your financial future by making strategic decisions about your pension, insurance, and health benefits.

Understand Your Federal Law Enforcement Retirement Benefits

Federal Law Enforcement Officers (LEOs) often face unique job challenges, making early retirement both appealing and feasible. If you’re considering stepping away from your role sooner than the standard retirement age, you’re not alone—and the good news is that you can do it without giving up essential benefits. Here’s what you need to know to make the most of early retirement as a federal LEO.

Federal Early Retirement Options for LEOs

Due to the nature of your role, the government offers you a specialized retirement package to encourage earlier retirement. Unlike many other federal positions, you have access to the Federal Employee Retirement System (FERS) with unique rules for LEOs that include an enhanced annuity calculation. Here are the main early retirement options available:

Retirement at Age 50 with 20 Years of Service: As a federal LEO, you qualify for retirement benefits as early as age 50 if you have at least 20 years of service.
Any Age with 25 Years of Service: If you’re not quite 50 but have completed 25 years of service, you’re eligible to retire and still receive full benefits.

Why LEO Retirement Plans Are Different

Federal LEOs’ work is demanding, physically challenging, and sometimes hazardous, so the retirement system recognizes this with unique provisions. The formula for calculating retirement benefits is more favorable, and it allows you to retire earlier with greater financial security. This provision aims to help you transition to a less physically demanding phase of life while still providing for your retirement.

The FERS Special Retirement Supplement

For federal LEOs, an important part of early retirement benefits is the FERS Special Retirement Supplement (SRS). This supplement is designed to fill the income gap between early retirement and the age when you become eligible for Social Security, which is generally age 62. Here’s how it works:

Eligibility for SRS: If you retire before 62 with the required years of service, you’ll receive the FERS Special Retirement Supplement until you qualify for Social Security.
How SRS is Calculated: The amount you receive from SRS is an approximation of the Social Security benefit you’ve earned while working as a federal employee. However, it’s worth noting that any income you earn from work after retirement can reduce your SRS through the earnings test.

Maximize Your Annuity with Careful Timing

To make the most of your annuity, consider timing your retirement carefully. Your annuity under FERS for LEOs is calculated at a higher rate—1.7% of your high-3 average salary for the first 20 years of service, compared to 1% for standard federal employees.

An Example Calculation: Suppose you’ve put in 20 years of service as an LEO with an average high-3 salary of $90,000. Your retirement annuity would be calculated as:

20 years × 1.7% × 90,000 = $30,600

Years Beyond 20: For each additional year beyond 20, the calculation changes to 1% of your high-3, meaning that working longer could significantly increase your total annuity.

Health Benefits—Maintaining Your FEHB

One of the biggest concerns for early retirees is health insurance coverage. Fortunately, federal LEOs who retire with at least five years of FEHB (Federal Employees Health Benefits) coverage can continue this benefit into retirement. Here’s what you need to know:

FEHB Eligibility: As long as you’re enrolled in FEHB at retirement and have been for the previous five years, you can carry your FEHB coverage into retirement.
Cost Considerations: Although you’ll need to cover the full premium cost, the benefit remains an excellent value, as the government still covers a significant portion of the premium, even in retirement.

Medicare Enrollment and Coordination

Medicare becomes available at age 65, but as an LEO retiring early, you’ll need to consider how your FEHB and Medicare will work together down the line. Many federal retirees choose to maintain FEHB as their primary coverage, while others opt for Medicare Part B to minimize out-of-pocket costs. Here’s a quick guide:

FEHB and Medicare Coordination: Enrolling in Medicare Part B at age 65 can help reduce costs since Medicare covers some expenses that FEHB may not, like copayments and deductibles.
Decision Timing: Decide on Medicare Part B when you approach age 65; delaying could result in a penalty if you later decide to enroll.

Consider FEGLI for Life Insurance Coverage

Federal Employees’ Group Life Insurance (FEGLI) is another important benefit for federal LEOs, and early retirement can impact your FEGLI coverage. If you’re thinking about taking early retirement, consider how your life insurance needs may evolve:

FEGLI Coverage in Retirement: Retiring early can give you the option to retain your FEGLI coverage, but premiums increase significantly with age.
Options for FEGLI Reduction: FEGLI allows retirees to reduce their coverage at certain age milestones to control premium costs. It’s wise to assess your family’s needs for coverage and decide if reducing it is beneficial.

Thrift Savings Plan (TSP) Strategies

The Thrift Savings Plan (TSP) is a powerful tool for federal LEOs looking to boost their retirement income. Since you may be considering retirement in your 50s, let’s explore how to make the most of your TSP:

TSP Withdrawal Rules: Federal employees can start taking penalty-free withdrawals from TSP as early as age 50 under certain conditions for LEOs. If you retire at or after 50, these withdrawals are not subject to the standard 10% early withdrawal penalty, allowing you to tap into your TSP funds without extra costs.
Catch-Up Contributions: In 2025, the SECURE 2.0 Act allows those aged 60-63 to make increased catch-up contributions. If you’re nearing retirement, these can help you build additional savings in your final working years.

Plan Your Retirement Timeline

Considering early retirement? Here’s how to plan your timeline effectively to maximize your benefits and streamline the process:

Determine Eligibility: Check if you meet the age and service requirements (50 with 20 years or any age with 25 years).
Review Your High-3 Calculation: Confirm that your high-3 salary average is optimized for the highest annuity possible.
Map Out SRS and TSP Usage: Plan how you’ll use the FERS Special Retirement Supplement and whether you’ll draw from your TSP early.
Plan Health Benefits: Decide on your FEHB and Medicare coordination strategy in advance to avoid last-minute issues.

Making the Transition Smooth

Early retirement requires careful consideration and planning. Check with your HR department to ensure your records are up-to-date and accurate. Make sure to submit your retirement paperwork as soon as you’re ready, ideally about 60 days before your planned retirement date. You’ll also want to keep copies of everything for your records.

Forge Ahead with Confidence

Retiring early as a federal LEO is achievable with a strong understanding of your benefits and a sound financial strategy. By leveraging your specialized retirement options, maximizing your annuity, and optimizing your health and life insurance, you can confidently move into this new phase with your benefits intact and your future secure.