Q. I am covered by FERS. At my minimum retirement age of 56, I will have 28 years of federal service and approximately one year’s worth of unused sick leave. My understanding is that if I retire at that point, my annuity will be reduced by 35 percent – 5 percent for every year I am under 62. Is there any way I can avoid this age reduction to my annuity other than:
1. Continuing in federal service until I am 58, at which point I will have 30 years of service without counting any unused sick leave, or
2. Postponing receipt of my annuity until I am age 60?
For example, what if I wait to retire until I am 57, at which point I will have 30 years of service including my unused sick leave. Could I retire at that point and start receiving my annuity without an age reduction at some point before I am 60?
A. Sick leave is never counted until an employee has met the age and years of service requirements to retire. It can never be used to reach the years of service requirement. If you want to avoid the age penalty, you’ll have to wait until you have 30 years of actual service. Note: If you retired at your MRA with at least 20 years of service, your annuity would be reduced by 5 percent for every year you are under age 62.
