Age and benefits

Q: I’m a FERS employee. I’ve read information on the OPM website that indicates that I can retire at age 57, based on my birth date. However, I hear fellow colleagues mentioning that early retirement is not available until age 59 1/2. Is there a difference in benefits between retirement at these two ages besides the 5 percent per year pension reduction to age 62?

A: FERS employees can retire on an immediate, unreduced annuity at their minimum retirement age, which ranges between 55 and 57, depending on their year of birth. They also can retire at their MRA with at least 10, but fewer than 30, years of service; however, if they do, their annuities are reduced by 5 percent for every year they are under age 62. When your colleagues mentioned age 59 1/2, they may have been thinking about the point at which an employee may make an age-based withdrawal from a TSP account or when a tax-penalty free withdrawal may be made from an IRA.