FERS retirement


Q. This is a two part question. I’m a FERS employee with a minimum retirement age of 56 1/2.
I would like to retire at my MRA if possible but want to make sure I understand the penalties and rules. First, I will be about 1 1/2 years short of 30 years with the government at age 56 1/2. It’s my understanding that I can still retire at that age but can postpone receiving an annuity to avoid the 5 percent per year penalty if I don’t take benefits until age 60. Is this correct?

Second, if I decide to postpone taking the annuity until age 60, I won’t be eligible to receive health care benefits until that time. I would need to find alternative health care during that gap between age 56 1/2 and 60. But would I be able to re-enroll again at age 60 with no issues?

A. Because you would have reached your MRA, you could retire under the MRA+10 provision. And because you would have at least 20 years of service, you could postpone the receipt of your annuity to age 60, thus avoiding the 5 percent per year age penalty. Your FEHB coverage would end after 31-days of premium free coverage. At that time, you could continue your coverage under the temporary continuation of coverage provision; however, you would be required to pay 100 percent of the premiums, plus 2 percent for administrative costs. Whether you elected to do this or not, you’d be able to re-enroll in the FEHB program when your annuity begins.


About Author

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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