Early retirement effects on annuity


Q. My service date is June 22, 1987, giving me 25 years of government service. I am under FERS; however, I am 43. If I take the early out my agency is offering, will my pension be penalized because I am under the age of retirement? Would my TSP lose value if I leave early? Would my monthly annuity be reduced under FERS? Would the IRS apply the 10 percent penalty tax because I have not reached the appropriate age to begin my withdrawals? Or does this not apply under the early out?

A. The age penalty on a FERS annuity doesn’t apply to someone retiring under the Voluntary Early Retirement Authority. You’d get the annuity you were entitled to based on your high-3 and years of service. However, you wouldn’t be able to receive the special retirement supplement until you reach your minimum retirement age, which in your case would be 56 years and 10 months.


About Author

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

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