Immediate annuity or disability retirement


Q. I am a FERS employee, age 60 with 20 years service, and have several health issues which have decreased my ability to perform the duties of my position. There is no position in which I can be placed. I have been told by a human resources retirement counselor that because I am eligible for an immediate annuity, I cannot file for disability retirement since it would be more beneficial financially to voluntarily retire. I was also told that after applying for voluntary retirement, I should file for disability through Social Security. Is this correct? Which is the most beneficial financially?

A. Your HR retirement counselor is mistaken. The fact that you are eligible for immediate retirement based on your age and service isn’t a bar to your applying for disability retirement. However, if you do, you must apply for Social Security disability benefits. Otherwise, the Office of Personnel Management won’t review your application.

Your HR retirement counselor is also mistaken about which form of retirement would be most beneficial financially. As a disability retiree, for the first 12 months, you’d receive 60 percent of your high-3, minus 100 percent of any Social Security disability benefit. After the first 12 months, and until age 62, you’d receive 40 percent of your high-3, minus 60 percent of any Social Security disability benefit. At age 62, your annuity would be converted to a regular annuity, which would be based on your actual service, plus the time you were on disability retirement.

If you retired on a regular annuity, your annuity would be 20 percent of your high-3 (0.01 x high-3 x 20 years of service).

It’s obvious which kind of retirement would be financially most beneficial.


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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

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