Posted on Thursday, 26th August 2010 by

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The FERS supplement and deferred annuities have attracted considerable attention recently. Many are thinking seriously about early retirement these days. Thankfully we have Linda Duncan, our HR and Benefits Forum Host, available to handle these often complex issues for our site visitors.

We recently added a Travel Forum and Nancy Holston’s article titled New England in Autumn highlights sightseeing in Maine and the best sights to see in the area. You can add her travel articles to your newsletter list if you are interested in traveling in retirement. Her next article will be on family vacation planning .

FERS Supplement Impact on Earnings

If you retire with a FERS supplement and go back to work in retirement your supplement is subject to the same Social Security earnings rules. Basically, if you are receiving a supplement and earn more than $14,160 a year in 2010 you would have to give back $1 for every $2 you earn over this limit.

CSRS employees that worked 40 quarters or more in the private sector and collect Social Security at age 62 are also subject to these same income limitations until they reach full retirement age

If you are looking for employment in retirement visit our Retiree Jobs Center for job listings and guidance. Job listings range from independent wine consultants to instructors and companies looking for retired feds that held security clearances.

Deferred Retirement Clarifications (FERS)

FERS employees are not eligible for a regular retirement until they reach their minimum retirement age (MRA) and have 30 years of service, age 60 with 20 years, or age 62 with 5 years service.  If you leave prior to your MRA, you can apply for a deferred retirement when you reach your MRA with 30 years of service, or at the age 62 with 5 years of service.  However, with a deferred retirement you will not be eligible for the FERS supplement, life insurance or health benefits when you leave.  If you wait to retire at your MRA, and you had Federal Employee Health Benefit (FEHB) coverage for the past five years, you can continue FEHB coverage into retirement.

Another consideration is the elimination of the cost of living adjustment (COLA) for those considering a deferred retirement for the time period between when they first elect this option and start to collect an annuity, often a period of many years. Inflation can significantly impact your deferred annuity. COLAs will resume when you start collecting your annuity and reach age 62.

The MRA + 10 Annuity option assesses significant penalties for taking an early annuity. Typically you can retire at your MRA with as little as 10 years service however for each year under age 62 you give back 5% of your payment.  If you elect this option at the MRA age of 57 the penalty would be 25% of your annuity payment!  If you elect this option and defer your retirement until age 62 no penalties are assessed.   You would also be able to enroll in the FEHB and FEGLI programs again when your deferred annuity starts if you were enrolled in these programs for the last five years of your federal employment.

We receive many calls from former employees and their survivors asking how to initiate a deferred annuity.  We added a complete section on this process on our site including links to the Deferred Retirement Application, OPM Form 1496A.  Review this section for complete guidance.  If a former federal employee dies before collecting the deferred annuity the surviving spouse is eligible to receive 50% of their annuity payable starting on the date the deceased employee attained the age and service requirements for the annuity. Lesser amounts are payable if the surviving spouse wants to collect earlier.

Travel Forum

Sign up for the new Travel Forum Newsletter.

Are you looking for a travel bargain?  Do you want to go somewhere you haven’t been before but want to know what to expect?  Maybe you’re open-minded and want to go on an adventure to someplace new.  The Travel Forum Newsletter has something for everyone.  It has tips for retirees but also great info on travel spots for anyone who loves to travel.

Do you have questions about a particular resort or vacation destination?  Do you have a suggestion for an article?  Send your questions or suggestions to the Travel Forum blog.

If you are receiving this newsletter you can add the Travel Forum articles to you newsletter list.  Just enter your email address and click enter. You will receive an email with instructions on how to add other forums to your list.

Learn more about your benefits, employment, and financial planning issues on our site and visit our Blog frequently at to read all forum articles.

Visit our other informative sites

The information provided may not cover all aspect of unique or special circumstances, federal regulations, and financial information is subject to change. To ensure the accuracy of this information, contact your benefits coordinator and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our articles are not intended nor should they be considered investment advice. Our reply is time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change.”

Last 5 posts by Dennis Damp


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