Retirement penalty


Q. I have 27 years of service and am currently employed with the federal government. I am 52 years old and was born in 1965. If I decide to leave before reaching 30 years of service and take a reduced annuity upon reaching my minimum retirement age, will the penalty be 20 percent in each of the four years before reaching 60, or will the penalty get reduced as I get closer to 60?

A. When you apply for your annuity, it would be reduced by five-twelfths of 1 percent for every month (5 percent per year) that you are under age 62.


About Author

Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to


  1. I agree with Elaine. According to OPM’s website the penalty is tied to age 62, not 60:

    Early Retirement

    “MRA+10 Retirement

    If you have 10 or more years of service, you can retire at the Minimum Retirement Age (MRA).

    Age Reduction

    Under this type of retirement, your annuity will be reduced for each month that you are under age 62. The reduction is 5% per year (5/12 of a percent per month). However, your annuity will not be reduced if you completed at least 30 years of service, or if you completed at least 20 years of service and your annuity begins when you reach age 60.

    You can reduce or eliminate this age reduction if you choose to have your annuity begin at a date later than your Minimum Retirement Age. You can choose any beginning date between your MRA and 2 days before your 62nd birthday.”

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