Q. When I reach my minimum retirement age of 56, I will have worked for civil service for almost 35 years. Will I receive a full retirement check without any penalties, or do I still have to wait until I’m 62 since Social Security is considered part of my retirement as I’m a FERS employee?
A. You’ll receive your full retirement annuity plus the special retirement supplement, which approximates the amount of Social Security benefit you earned while a FERS employee. The SRS will end when you reach age 62 and are entitled to a Social Security benefit.
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Some things you should keep in mind though when weighing retiring at 56 versus 62.
1. While you get the FERS supplement, your social security will be lower than the estimate you may have gotten from social security previously because they assume you work at your current salary until 62.
2. You will not get any COLA on your retirement amount until you reach the age of 62. So your pension amount is essentially frozen for six years.
3. You need to consider what you can pull from your TSP because there are restrictions since you are taking money out before being 59.5 years old. Make yourself aware of these.
4. If you retire at 62 or older, you get 1.1 versus 1 percent. Essentially you gain a ten percent addition, so in your example instead of it being 35% @ 56 versus 41% @ 62, it’d be more like 35% versus 45% (41 years * 1.1% =45.1%).
None of this prevents you from retiring at 56, you should just be aware of the impacts.