Q. I am Chapter 38, with 17.5 years of federal service. I am 55 years old and under the Federal Employees Retirement System. How can I early out and keep insurance? If I do not touch the retirement until 62, is there a penalty? A. You can’t “early out” because you haven’t met the new age and service requirements to retire: age 50 with 20 years or any age with 25.