What is MRA?
Minimum Retirement Age is a threshold that was created for FERS and CSRS to determine a federal employee’s eligibility for retirement. Depending on the year someone is born, the MRA for that person can range between ages 55 and 57. In addition to age, a federal employee’s years of service also determine retirement eligibility.
Understanding the MRA chart
Below is the chart used by OPM to determine a federal employee’s Minimum Retirement Age:
|If you were born||Your MRA is|
|In 1948||55 and 2 months|
|In 1949||55 and 4 months|
|In 1950||55 and 6 months|
|In 1951||55 and 8 months|
|In 1952||55 and 10 months|
|In 1965||56 and 2 months|
|In 1966||56 and 4 months|
|In 1967||56 and 6 months|
|In 1968||56 and 8 months|
|In 1969||56 and 10 months|
|In 1970 and after||57|
For those who’s MRA falls on an age expressed in years and months, you simply take your date of birth and add the number of years as well as however many months to it to find your MRA date.
MRA as it pertains to the FERS Supplement and Social Security:
The earliest age that a person can start taking their Social Security is age 62. They can delay their withdrawals up to age 70, and by doing so, increase the monthly annuity that they receive.
For those federal employees who retire before 62, the FERS has a supplement of additional income to help bridge the gap from retirement to age 62. This is known as the Special Retirement Supplement, or simply the FERS Supplement.
In order to be eligible to receive the FERS Supplement, you have to retire under one of the following rules:
- Retire at your MRA with 30 or more years of creditable service
- Retire at age 60 or older with 20 or more years of creditable service
- Retire with Special Provisions (such as a firefighter, LEO, air traffic controller, and more) and be either 50 years old, or have 25 years of service.
So let’s say that Bob has been working as a federal employee for 31 years and decides to retire when he’s 58. Because he met one of the rules listed above (retire at MRA with 30 years or more of service), he’ll start to receive the FERS Supplement along with his regular pension amount.
Once Bob turns 62, the FERS Supplement will turn off and he’ll only be receiving the regular pension. This is true even if Bob decides he doesn’t want to take his Social Security yet.
Should you start your Social Security when your FERS Supplement ends?
In the example above with Bob now being 62 and eligible for Social Security, why would he not start taking his Social Security now? By delaying his Social Security payments, Bob’s payments will atomically increase every single year until his age 70, which is the latest he can delay it. Bob will have to live on money from other accounts that he has in replacement of the FERS Supplement, or he might not even need the money at all if his FERS pension is enough.
Very few things in finance are guaranteed to grow. While we do not know how the future of Social Security will play out, the way the rules are written today would make us recommend more often than not to delay Social Security until 70 if our clients can afford to wait. It also depends on the health of the client as well, as life expectancy will play a role in the decision making process.