Q. I am 54 and have 28½ years in with the Postal Service. My first official retirement date is July 9, 2014. However, I am being told that if I retire now with the Voluntary Early Retirement Authority, my annuity will be higher than if I wait until 56 due to the 5 percent penalty for each year I am under 62. That would give me a 30 percent penalty on my annuity. Is this correct? I just want to go the way I will have the most in my annuity.
A. The person you talked to was confused. If you retire under the VERA, your annuity will be computed using the standard formula based on your high-3 and your 28½ years of service. If you wait to retire until your official retirement date, your annuity would be calculated using the same formula and your 30 years of service. In neither case would you be subject to the age penalty.