The FERS supplement is a great benefit for Federal Employees who retire before age 62, ensuring income stability until they are eligible to receive their Social Security benefit.

You may also hear the FERS Supplement referred to as the “Special Retirement Supplement or SRS” or as the “Annuity Supplement” (the TSP is an Annuity account) or “Social Security Supplement.” If you’re eligible for the FERS Supplement, it will automatically be included in your monthly pension payments once your retirement application2 is fully processed.

Whether you’re considering an early, immediate, or postponed retirement, understanding how the FERS Supplement fits into your overall retirement strategy is essential; including eligibility criteria, tax implications, and potential reductions.

Eligibility Requirements

You must meet these eligibility requirements in order to receive the FERS Supplement.

• You must be covered under FERS (or the earlier CSRS) to be eligible for the supplement.
• You need to be under the age of 62; the supplement is only meant to be a bridge to Social Security eligibility.
• You need to retire with an immediate annuity retirement, (not MRA+10). And, you need to meet one of the following requirements; you’ve met the Minimum Retirement Age (MRA is usually between 55-57) and you have at least 30-years of creditable service, or you’re at least 60-years old and you’ve completed at least 20-years of service.

Tax Implications

When you begin taking your Social Security, where only up to 85% of benefits may be taxed, 100% of your FERS Supplement is subject to Federal Income Tax. Depending on your total retirement income and location, you may also owe state taxes.

Your FERS Supplement may be reduced or eliminated if you earn additional income. Your FERS Supplement will be reduced by $1 for every $2 earned over the annual income limit; in 2025 that income limit is $23,400. FERS pension and TSP withdrawals are excluded from the calculation which is solely based on income from jobs. This reduction follows Social Security’s “earnings test” and is subject to annual OPM reporting.

If you’re eligible for the FERS Supplement, take the time to calculate your potential benefit, factor in tax obligations, and plan for any potential income gaps post-age 62. With proper preparation, the FERS Supplement can be a powerful tool in achieving a financially secure retirement. To gain a deeper understanding of how FERS Supplement impacts your retirement goals reach out to our team by filling out the form on this page. A member of our team will reach out to schedule a time to connect that works best for you.