Q: Which is better and what are the advantages of taking a FERS disability retirement or a VERA. I am eligible for both but want to take the one most advantageous to me. I am a 26-year employee suffering from Parkinson’s disease and am going to retire either way.
A: I’ll give you the formulas, you can do the math. However, I’ll include a couple of facts along the way that may help you to decide which is better.
If you accept an offer of early retirement, your FERS annuity will be calculated as follows: 0.01 x your high-3 x your years and full months of service. Further, you won’t be subject to the 5 percent per year age penalty for being under age 62. When you reach your minimum retirement age, you’ll be able to receive the special retirement supplement until you become eligible for a Social Security benefit at age 62. The SRS approximates the Social Security benefit you earned while covered by FERS. While the SRS won’t be increased by any cost-of-living-adjustments, your annuity will beginning at age 62.
If you are approved for FERS disability retirement, during the first 12 months you’ll receive 60 percent of your high-3 minus 100 percent of any Social Security disability benefit you are eligible to receive. (You have to apply for a Social Security disability benefit or OPM won’t process your application.) After the first 12 months, you’ll receive 40 percent of your high-3 minus 60 percent of any Social Security disability benefit. Up to age 60, you will have to provide evidence to OPM that you are still disabled. At age 62, your disability benefit will be recomputed as if you had worked until age 62. Any Social Security disability benefit to which you are entitled will continue. Note: While you will receive any annual cost-of-living adjustments regardless of the age at which you retire, you won’t be entitled to receive the SRS. No disability retiree is.
