Early retirement and annuity reduction


Q. I am a 45-year-old letter carrier under CSRS with 25 years of service. If I accept an early retirement offer from the Postal Service, will I still be subject to the 2 percent-a-year penalty for being under my minimum retirement age? What other penalties will I face accepting a VERA at an early age?

A. Yes, as a CSRS employee, you’d be subject to the 2 percent per year permanent reduction in your annuity. Another effect would be that your annuity would be based on fewer years of service than if you’d waited until you reached age 55 and were eligible for an immediate unreduced annuity.


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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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