FERS Early Retirement: Eligibility, Annuity, and the Supplement

FERS early retirement is possible as early as age 55 to 57 with just 10 years of federal service, but leaving before the standard benchmarks almost always shrinks your monthly annuity. The main voluntary path is called MRA+10, and it carries a permanent 5% reduction for every year you are under 62 when payments begin. Two involuntary paths — offered only when your agency is restructuring or separates you against your will — avoid that penalty. Which route applies to you determines almost everything else about what retirement will actually pay.

Who Qualifies to Retire Early Under FERS

Under 5 U.S.C. § 8412, a FERS employee who has reached the Minimum Retirement Age (MRA) with at least 10 years of creditable service is entitled to an immediate annuity upon separation.¹ Your MRA depends on your birth year:

Born before 1948: MRA is 55
Born 1948–1952: MRA is 55 plus 2 to 10 additional months, increasing with each birth year
Born 1953–1964: MRA is 56
Born 1965–1969: MRA is 56 plus 2 to 10 additional months
Born 1970 or later: MRA is 57

Ten years is the floor. The standard, unreduced FERS retirement benchmarks are MRA with 30 years, age 60 with 20 years, or age 62 with just 5 years.¹ MRA+10 gets you out earlier than any of these, at the cost of a permanent reduction the others avoid.

Involuntary Early-Out Paths: VERA and DSR

Two additional early paths exist for employees who are not leaving purely by choice. Both require age 50 with 20 years of service, or 25 years of service at any age.

Voluntary Early Retirement Authority (VERA) becomes available when your agency is undergoing a reduction in force or major reorganization. The agency requests VERA from OPM, which grants it for a specific time window and employee group.²³ If your agency hasn’t obtained the authority, it isn’t available to you.

Discontinued Service Retirement (DSR) applies when you are involuntarily separated for reasons other than misconduct — typically during a reduction in force or when you decline a directed reassignment outside your commuting area. The age-and-service thresholds match VERA’s. The critical difference from MRA+10: a FERS discontinued service annuity carries no age reduction, even if you are under 55.⁴ That makes DSR financially better than MRA+10 in most situations where it’s an option.

How Your Annuity Is Calculated

The basic FERS annuity formula is 1% of your “high-3” average salary multiplied by your total years of creditable service.⁵ Your high-3 is the highest average basic pay you earned during any three consecutive years of federal service — usually your final three.⁶

An employee with a high-3 of $90,000 and 15 years of service would start at $13,500 per year ($90,000 × 0.01 × 15) before any reductions. Employees who wait until age 62 with at least 20 years of service get 1.1% per year of service instead of 1%.⁵ That extra tenth of a percent matters: the same employee at age 62 with 20 years and a $90,000 high-3 would receive $19,800 instead of $18,000. Early retirees don’t qualify for the 1.1% multiplier.

The 5% Age Reduction — and How to Avoid It

This is where MRA+10 gets expensive. If you start drawing your annuity immediately, it is permanently reduced by 5% for every year you are under age 62. Months count proportionally at 5/12 of 1% each. Retire at 57 and the cut is 25%. Retire at 55 and it’s 35%. The reduction never comes back, even after you turn 62.

You can avoid some or all of it by postponing when payments begin. Under a postponed MRA+10 retirement, you separate at your MRA with 10 years of service but delay the annuity start date. The reduction is calculated based on your age when payments actually begin, not when you separated.⁷ Wait until the first day of the month you turn 62 and the age reduction disappears entirely. It also disappears if your annuity starts after your 60th birthday and you have at least 20 years of service.

The catch: during the postponement window you receive no annuity payments and, as covered below, you lose your health and life insurance until they resume.

What Happens to Health and Life Insurance

Federal Employees Health Benefits (FEHB) and Federal Employees’ Group Life Insurance (FEGLI) can follow you into retirement, but only under specific continuous-enrollment rules.

To carry FEHB into retirement, you must retire on an immediate annuity and have been continuously enrolled in an FEHB plan for the five years of service immediately before retirement (or since your first opportunity, if that’s less than five years).⁸ FEGLI works the same way for its five-year rule.

If you postpone your MRA+10 annuity, FEHB and FEGLI stop at separation. You can temporarily continue FEHB for up to 18 months, but you pay both the employee and government shares of the premium plus a 2% administrative charge. When your annuity payments finally begin, you may re-enroll and the government share resumes.⁷

One boundary worth flagging: employees who separate before MRA and apply later for a deferred annuity (starting at age 62 with at least 5 years of service) cannot carry either FEHB or FEGLI into retirement at all.⁹ The break in service severs the continuous-enrollment chain. That is one of the biggest hidden costs of walking away too early.

The Special Retirement Supplement — Who Gets It, Who Doesn’t

Some FERS early retirees receive a monthly payment that bridges the gap between retirement and Social Security eligibility at 62. The Special Retirement Supplement (SRS) approximates the Social Security benefit you earned during your years of federal service.¹⁰

MRA+10 retirees do not qualify. To receive the SRS, you must retire at your MRA with 30 years of service, or at age 60 with 20 years. Disability retirees and deferred retirees are also excluded. The supplement stops the month you turn 62, whether or not you have filed for Social Security.¹⁰

The SRS is subject to an earnings test. If you work in retirement and earn more than the Social Security exempt amount — $24,480 in 2026 — your supplement is reduced by $1 for every $2 above the limit.¹¹ The supplement does not receive cost-of-living adjustments; it stays flat from the day you retire until it ends.

No COLAs Until Age 62

FERS retirees don’t receive annual cost-of-living adjustments on their basic annuity until they turn 62. Retire at 57 and your annuity holds at the same dollar amount for five years while inflation erodes it. You don’t get retroactive COLAs for those years once you hit 62.

When COLAs do start, FERS uses a less generous formula than Social Security or CSRS. If CPI increases 2% or less, you get the full amount. Between 2% and 3%, you get 2%. Above 3%, your COLA equals the inflation rate minus 1 percentage point.¹² In a 4% inflation year, your FERS annuity increases only 3%. Law enforcement officers, firefighters, and air traffic controllers are exceptions: they receive COLAs immediately upon retirement.¹³

Reaching Your TSP Before 59½

Normally, withdrawing from a tax-deferred retirement account before age 59½ triggers a 10% early-withdrawal penalty on top of ordinary income tax. The “Rule of 55” is the way around it for federal employees: if you separate from federal service during or after the calendar year you turn 55, you can withdraw from your TSP without the 10% penalty.¹⁴ Ordinary income tax still applies, but avoiding the extra 10% makes a real difference if you need TSP funds to bridge a postponement period or the years before Social Security.

The exception only covers your TSP, not IRAs or plans from previous employers. Separate before the year you turn 55 and the penalty applies to most TSP withdrawals until you reach 59½. Federal law enforcement officers, firefighters, and air traffic controllers get a lower age-50 threshold.

Filing Your Retirement Application

The central form is SF-3107, Application for Immediate Retirement, available from your agency’s HR office or OPM.¹⁵ You’ll document your full federal career, any military service you want credited, and your elections for health insurance, life insurance, and survivor benefits. If you’re married, expect to provide a marriage certificate along with birth certificates for you and your spouse.

Your agency completes SF-3107-1, the Certified Summary of Federal Service, which fixes your exact years, months, and days of creditable service. OPM feeds that record straight into the annuity formula, so any error affects your monthly payment for life. Review it before it goes.

If you are postponing your MRA+10 annuity rather than starting it immediately, use Form RI 92-19 instead of SF-3107.⁹ Once OPM receives your file, they assign a claim number beginning with “CSA” and use it for all future correspondence.¹⁶ Processing can take several months, and OPM typically issues interim payments at a reduced rate until the final calculation is complete. Missing documents are the most common cause of delay, so verify the package before it leaves your hands.

1
Office of the Law Revision Counsel. 5 USC 8412 – Immediate Retirement
2
eCFR. 5 CFR 842.213 – Voluntary Early Retirement
3
Office of the Law Revision Counsel. 5 USC 8414 – Early Retirement
4
U.S. Office of Personnel Management. CSRS and FERS Handbook Chapter 44 – Discontinued Service Retirement
5
Office of the Law Revision Counsel. 5 USC 8415 – Computation of Basic Annuity
6
U.S. Office of Personnel Management. FERS Information – Computation
7
U.S. Office of Personnel Management. What Happens if I Postpone the MRA+10 Annuity
8
U.S. Office of Personnel Management. Health Insurance FAQs
9
U.S. Office of Personnel Management. Applying for Deferred or Postponed Retirement Under FERS
10
U.S. Office of Personnel Management. CSRS and FERS Handbook Chapter 51 – Retiree Annuity Supplement
11
Social Security Administration. Receiving Benefits While Working
12
U.S. Office of Personnel Management. How Is the COLA Determined
13
Office of the Law Revision Counsel. 5 USC 8462 – Cost-of-Living Adjustments
14
Thrift Savings Plan. Information for TSP Participants Leaving Federal Employment
15
Office of Personnel Management. Standard Form 3107 – Application for Immediate Retirement
16
Office of Personnel Management. Federal Retirement Case Workflow