Deferred annuity


Q. I am 50 years old with 30 years of service. Can I resign and not receive any benefits, until I turn 57 years old, without penalty?

A. Yes, you could receive a deferred annuity at your minimum retirement age, which is 57. That annuity would be based on your High-3 and years of service on the day you left government. However, you wouldn’t receive credit in your annuity computation for any sick-leave hours you had when you resigned. Finally, you wouldn’t be eligible to re-enroll in either the FEHB or FEGLI programs.


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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


  1. Define “penalty”. My projected sick leave hours with 30 years are likely be a year’s worth, that’s a 3.33% hit to the retirement amount (1/30). Your high 3 would have not have received any raises, so even an annual 1.5% raise over seven years amounts to an eleven percent increase. Additionally you don’t get any COLA’s on the retirement until you hit age 62, and if inflation rises and you have 5 years (age 62 – 57) at just 2% inflation that’s another ten percent for retiring at age 57. That all said, if you’re getting income from somewhere else and would quit anyway, then you can bank the annuity starting at 57 and be ahead when you do officially retire from whatever else you are doing. As with anything you have to run the numbers.

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