FERS | Your Benefit from Day One
As a Federal Employee, you are enrolled in the Federal Employees Retirement System (FERS) from the first day of full-time employment forward. This benefit covers all full-time employees in the executive, judicial, and legislative branches of the federal government.
While FERS could undergo changes in coming years (as most corporations have now shifted from a pension system to 401K contributions), at this time, FERS remains one of the best retirement packages.
Although FERS makes a generous contribution toward your retirement, there is often a significant gap between what you will receive and what you want to have in order to retire comfortably.
FERS: The Exceptions You Need to Know
If you have less than 5 years of service when you leave employment with the Federal Government, you can withdraw your contributions (which will be taxed, unless you do a rollover).
This amount will not be what you see on your paystub, as early leavers forfeit the government’s contributions to their FERS benefit.
If you’ve served for 5 or more years, then you qualify for a deferred retirement; even if you leave at age 45, your FERS benefit will remain on the shelf and ready for distribution to you, beginning at age 62. If you have at least 10 years of service, you can receive benefits earlier, at a reduced rate.
While the current Administration is working to shorten lengthy OPM processing times, we encourage you to plan for a 6-month wait while your retirement package is finalized. Once OPM processes your retirement paperwork, you’ll receive back pay for any missed supplement payments. Errors in paperwork almost always delay payments beyond 6-months. You can get support at no cost by filling out the form on this page
If you withdraw your FERS contributions, you will forfeit your future FERS annuity. This means that if you return to Federal Service, you won’t be allowed to replace withdrawn funds (in order to restore retirement benefits). That said, your Thrift Savings Plan (TSP) and Social Security benefits won’t be affected.
Deferred Retirement is Available Under the FERS System
Instead of taking an immediate annuity payment when you leave Federal Service, you choose to leave your pension with the government (provided you have 5-years of creditable service) – making it possible for you to collect your retirement payment once you’re at the qualifying age of 62 (or, in some instances, earlier).
Your Thrift Savings Plan (TSP) remains yours to invest as you want. Many individuals planning for retirement choose to relocate these funds to a place with more flexible withdrawals, higher earnings with income protections against loss, and better inheritance options (some TSP accounts make no provision for inheritance, with any unused funds returning to the Federal Government).
The FERS basic benefit plan provides a retirement based on your length of service and your High-3 (which is the average of your highest three consecutive years of earned income; not including overtime, bonuses, or other forms of payment).
It’s a good practice to verify that that your recorded years of creditable service is correct; you’ll receive an update annually, the SF-50; you can use this same form to submit corrections.
To get help calculating your future pension benefit as well as an analysis of your monthly income in retirement, you can call HR Shared Services, attend a My Federal Benefits workshopFederal Retirement Events or reach out for a free consult by filling out the form on this page
To learn more about your Social Security benefits, access your statement at SSA.gov. Our team at My Federal Benefits includes a Social Security Expert with nearly two decades of work serving within the Social Security Administration.
My Federal Benefits advises Federal Employees to begin preparing for retirement by completing paperwork correctly from the outset; that way you’ll be in the best possible position when that future retirement date comes along.
Often, workplace managers bring in the My Federal Benefits team to help with paperwork for early and mid-career employees, and for employees looking at VERAs or preparing for retirement.
Your Retirement Application can be found on the OPM website but talk to someone who knows about the best day to retire, how not to leave money on the table, and how to put yourself in the best position for a worry-free retirement. Reach out to our team to help you understand your benefits by filling out a form on this page.
