When should I begin my annuity?


Q: I was a Federal Employees Retirement System employee and left the government in September 2005 under the Minimum Retirement Age +10 provision. I postponed my annuity to avoid the 5 percent penalty per year. I will be 62 in two months. Is there any advantage to waiting even longer to receive my annuity? Is it at all like Social Security, where the longer you wait, the more you receive?

On the flip side, what are the downsides of applying at age 62? I understand that if I am re-employed by the government, my salary will be offset by my annuity. I also understand that some places may not be as willing or able to hire an annuitant. Are there other disadvantages?

A: There isn’t any advantage to delaying the annuity. Whether your annuity begins at age 62, 65 or 70, the dollar amount you get will be the same: 0.01 x your high-3 x your years and full months of service on the day you left government. As a rule, if you return to work for the government, your new salary would be offset by the amount of your annuity. If you worked for at least one year, you’d be eligible for a supplemental annuity; if you worked for at least five years, you’d be eligible for a redetermined annuity. If, by chance, you were hired into a position that allowed you to keep both your annuity and the unreduced salary of your new position, you’d get no further retirement credit.

By the way, I’m not aware that agencies have any reluctance to rehiring annuitants, nor is there any bar to an agency doing so.


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Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to fedexperts@federaltimes.com.

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