Q. I will have 30 years in service on Aug. 8, 2018. I will apply for retirement under the Voluntary Early Retirement Authority (VERA) at that time and see where the dart hits the dartboard. I will be 49 years old (plus a few days) — young enough to perhaps move onto something else. Is there anything I should know?
A. You can’t apply for a VERA. You can only agree to retire if your agency is authorized to offer a VERA and your position is included in that offer.
I’m retiring under VERA in Jan, just three months short of my MRA. Things I’ve learned that you may want to consider:
– The VERA offers that I have seen have specified a minimum age of 50.
– If you’re FERS, you won’t get your Special Retirement Supplement until you reach you MRA, not matter when you retire.
– You can’t withdraw from your TSP without penalty until you’re 55.
Odd they would specify a minimum retirement age of 50.
OPM states that to be eligible to retire under VERA one must have either:
Minimum 20 years credible Federal Civilian Service (including military buy back) and be at least 50 years old or;
Minimum 25 years credible Federal Civilian Service (including military buy back) at any age (can be under 50 as long as you have 25 years).
You are correct – I remembered seeing the 50, but years of service also matter!
David, Rick, I will have turned 49 in 2018; have 30 years “on the books” in OCT and hopefully retiring [in DEC].
I’ll hit 30 years myself (counting military buyback) in 2 1/2 years when I will be 49 as well. But my agency is NOT offering a VERA and not foreseeing any RIF’s, so I’ll have to wait till my MRA in 9+ years when I will have 37+ years should I choose to go.
Unless your agency is offering a VERA or you are facing a RIF or are serving in law enforcement, firefighting or air traffic control you won’t be able to retire till you hit your MRA even though you have over 30 years.
With the incoming Trump administration we all may see many more agencies offering VERAs/buyouts and facing RIFs due to promised cuts.
A couple of things to keep in mind if you accept an early retirement offer. You won’t be able to begin IRS penalty free withdrawals from your TSP till you hit age 55. You also won’t be able to directly contribute to it if you get a job in the private sector. You can still manage your TSP and move funds around within the TSP however.
You’ll have to set up a 401k account with your new employer or set up an independent IRA account. You can roll that 401k or IRA into your TSP when you leave that job or also roll your TSP into your 401k if you choose. Applicable transfer/roll fees may apply.
Second thing to keep in mind if you are offered and accept early retirement, if you plan on also applying for the FERS Special Retirement Supplement (SRS) you will have to wait till you reach your MRA before you are eligible to receive it.
Eligibility for the FERS SRS expires when you reach 62, regardless of whether you apply for early Social Security or not.
There is also an earnings test/limit to the SRS similar to early social security. If you plan on working while receiving both FERS and the FERS SRS, if you make over $15K/year in wages from employment (either self employed or working for somebody) your SRS will be reduced by $1 for every $2 you are over the $15K limit. If you make over $45K/year in wages your SRS could reduced to zero. There is no earnings limit/Test for your regular FERS annuity or your TSP withdraws when you are old enough.
Murphy’s Law being what it is, I’m not betting on there being a VERA any time soon. I’m also betting there [will] be a RIF before there is talk of a VERA. As long as one of them happens [before] I turn 57, I’ll be happy.
Darren – yes you are covered for early retirement either way (VERA or RIF) due to your having over 25 years of service. If your position is being RIF’d/eliminated and your agency does NOT have another job they can offer you that is within two pay levels of your current your pay grade, is within your commuting area AND THAT YOU ARE QUALIFIED FOR, then you can take early retirement.
If you agency DOES have another job they can offer you that meets the above 3 conditions and you refuse the offer, you will not be eligible for early retirement and your separation will be considered a resignation. However if there are RIF’s in your area, more likely than not your agency will NOT have another job to offer you.
Usually if RIF’s are coming, the agency will also seek at least a targeted VERA to cover only those areas where RIF’s or facility/base closings are going to occur to hopefully entice enough of those eligible for early retirement/regular retirement to retire and limit the numbers of workers they have to process for termination of employment!
David, thank you for your reply.
I understand the RIF process. If my position is on the list and there’s nowhere for me to move laterally, then it’s “Pack your stuff!” with no questions asked.
It’s the VERA that confounds me; and I’ve addressed this with Reg also.
Using my SCD (Service Computation Date) I will have 30 years Federal service @ age 49, on 8AUG2018.
[Somewhere] I read that in the absence of a RIF, the earliest I could voluntarily retire [at that point] would be [31DEC2018].
Somewhere else, I read that in the absence of a RIF or my ineligibility for a VERA; which you addressed on 17DEC16; the earliest age I could [voluntarily] retire was 57 (My MRA). That’s 10 years away and I have other family that are [also] getting on in age; waiting for me to retire, so we can change locale before age becomes a hindrance (No so much [for me] but [for them]). There are also personal concerns/considerations that are factors in my/our wanting to know the earliest/how I can move on.
Another important thing to keep in mind if you are a FERS retiree who is under 62 – you will NOT receive ANY annual Cost of Living increases for your FERS retirement until you reach 62 years of age. It doesn’t matter if you took an early retirement or retired regularly between your MRA and age 62.
Example, you take early retirement at age 50 with 30 years of service. Your high 3 is $50K/year, so your gross FERS retirement annuity would be $15K/year (before taxes, FEHB premium deductions, etc).
That same $15K/year amount will remain unchanged till age 62, all the while your taxes and your FEHB premiums will still increase year over year. Your take home FERS annuity amount will shrink considerably over the next 12 years till you start getting annual cost of living increases when you hit 62.
I already know that whenever, or however I can leave Federal service, I will not be able to do nothing. I’ll have to get another job after I leave; maybe [two]. (Sigh) /:-\ since my high 3 is considerably less than $50K/yr. and the resulting figures would also be considerably less.
The bad thing is the FER’s retirement system was billed by Ronald Reagan as a way workers could take their retirement benefit with them. Sadly this is only partially true. If you take a deferment your “banked” sick leave does not count, you lose it in its entirety, the health care option is null and void and you cannot carry over the life insurance election either. You will also forgoe the small yearly increase retirees get. Those are pretty stiff penalties for just deferring your retirement with 30 years vested. The benefit of possibly working on a second career outweigh any further increases in the pathetic FERS system though but make sure you know what your getting into.
I’m sharing your opinion with our readers.
To add a new wrinkle to my situation…..
I developed a seizure disorder (Grand Mal seizures) in AUG 1993 and I have been on medication to control said disorder. I won’t go into the boring clinical explanation [here]. In AUG & SEP of 2016 I had to have surgery and was prescribed a similar yet different medication that; as it turned out, on May 22 2017; I was taking [incorrectly]. Consequently, I had a seizure [at work]. When I followed up with my doctor, I was, of course, scolded and prescribed a higher dosage. Now, I have no choice but to take my meds [correctly] or; I was warned/guaranteed; I [will] wind up in the hospital if I take [this] medication incorrectly. As of this post, I am in the process of filing for disability.
Well they finally offered me the Vera/Vsip, now I’m hoping they will release me at the end of the month. I haven’t been able to get ahold of anyone to find out where to send my approval. I am a Marine Civilian with just under 28 years.
If that offer was made officially with a written notice, where you need to send your acceptance should be on it. If it was offered orally, you’ll have to ask the person who made the offer. All else failing, you should call the servicing personnel office for your organization.
No everythings in writting, but all it says it put in for the retirement which and did and signed everything, but theres a spot for the HR Rep to sign and I can’t get ahold of anyone because of the 4th. I am pushing because I want to leave the end of the month
I looked in EBIS to find out when my “Date of Retirement” would be. According to the Estimate Report for Disability Retirement, it’s 5DEC2017. I’m wondering how accurate that date is.
Just received notice (21FEB2018). (Note the date since my last post). I’ve been approved for the VERA/VSIP; the buyout amount being the pre-tax $25K. [I knew] I wouldn’t be able to retire early and do nothing; I also had that gut feeling I wouldn’t be approved for the higher amount.
So, now…..it’s look for a job to pay what bills I have.
Why were only offered the 25k? did they get rid of the 40k? I chose to get my 40k split up biweekly for one year, less on taxes and its like getting my regular pay.
I’m not aware that any agency has offered a buyout that exceeded $25,000.
Reg, my limited understanding of the whole VSIP/VERA process; with regard to the $$ is; as I was so informed this morning; ‘…..$25K minimum [up to] $40K; doesn’t mean you’re gonna get the $40K.’ – Paraphrased. (And I didn’t). So, in [my] case DoD opted for the lesser $$ figure…..go figure.
Well, at least now, I can move on to other things; none of which apply to these proceedings. I was given yet another verbal estimate (Today) of when I’d likely be out the proverbial door; ‘…..end of FEB or early MAR (Of [this] year)? That remains to be seen.
I wish you well.
Thank you, Sir.
Back in July they did, I thought it was extended, last day of 30k was in August, but I thought it was extended, Google it and see what you find out. Plus I think k it depends on your grade and how long you have been in
Well, Evonne, I’m at the bottom of the ladder, so to speak; have been my entire “career.” A high school diploma is just a foot in the door anymore, IF one is lucky. /:-/ It’s my own fault, really; never went to college.
Back in July they did, I thought it was extended, last day of 30k was in August, but I thought it was extended, Google it and see what you find out
I officially retired early on 28FE2018. Now, I am answering questions from folks who were higher up on the ladder than I was, who retired closer to their retirement age [years ago]; questions such as, ‘how were you able to retire at your age?’ ‘What does this mean for your retirement?’ ‘What does this mean for you medical?’ (I do need medical). I mentioned why one or two times here, somewhere.
I was told by HR that my medical coverage will continue at the same rate I was paying/that was taken out of my check every payday while I was working. “You mean your cost won’t go up?” The answer I was given by HR was, ‘No.’