Buyout and annuity


Q. I am 50 years old with 24 years of service under FERS. If I am offered a buyout, would the amount of my retirement annuity be based on the amount I would receive if I retired at 62 or a reduced amount minus the 2 percent reduction per year?

A. If you accepted a buyout, it would be based on the standard formula: 0.01 x your high-3 x your years and full months of service. There wouldn’t be any penalty for retiring early. P.S. For FERS employees who retire under the MRA+10 provision, the reduction is 5 percent (not 2 percent) for every year they are under age 62.


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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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