Immediate Retirement

What is an Immediate Retirement under FERS?

The Immediate Retirement under FERS is the main way of qualifying for the pension.  Sometimes it’s referred to as the full, normal, or voluntary retirement under FERS.    The Immediate Retirement sets the requirements for how to qualify for the pension immediately upon retiring without incurring a penalty or losing health insurance coverage.

Who is eligible for an Immediate Retirement?

There are two categories of qualifying for any retirement under FERS, and those are the age requirements as well as the length of service requirements.  Depending on your age when you separate from service, as well as how many years of creditable service, will determine if you qualify for an Immediate Retirement or not.  

The good news is that if you don’t qualify under the normal Immediate Retirement qualifications, it’s possible to retire under a Deferred Retirement or a Postponed Retirement.  Those qualifications are covered in another discussion.  

Let’s look at what the eligibility requirements are for an Immediate Retirement:

• Retire at your Minimum Retirement Age (MRA) or older with at least 30 years of service; or,
• Retire at age 60 or older with at least 20 years of service; or,
• Retire at age 62 or older with at least 5 years of service.

Note that the above eligibility for an Immediate Retirement is different for federal employees who are retiring under Special Provisions, including but not limited to firefighters, law enforcement officers, and air traffic controllers.

The age requirements are straightforward.  If you aren’t sure what your MRA is, please reference this table to find out what it is:

Source: https://www.opm.gov/retirement-services/fers-information/eligibility/ 

Your length of service is what usually takes a little bit longer to determine.  Your length of service is found by adding up the years, months, and days of your time in the federal government, including any sick leave and bought back military time.  

Oftentimes people will look at their Leave and Earnings Statement and find what their Service Computation Date (SCD) is.  The problem is that the SCD used to determine Leave eligibility rather than retirement eligibility.  

Instead, OPM will based retirement eligibility based on your RSCD – Retirement Service Computation Date.  Sometimes the SCD and the RSCD are the same, but not all the time.  The best way to find what your RSCD is is by requesting a Certified Summary of Federal Service from your local HR.  

The specific form number is SF 3107-1, found here.

What are the Pros and Cons of an Immediate Retirement under FERS?

Immediate Retirement is the gold standard when it comes to FERS, meaning it is the retirement option that all other retirement options (Deferred and Postponed) are referenced to when it comes to eligibility.  The main benefit of retiring under the Immediate Retirement is that your pension is penalty-free.  Under a Deferred Retirement, if you retire without having met the age and service requirements, there is a 5% per year permanent penalty imposed on your hard-earned pension for every year younger than 62. The only exception to this is retiring younger than 60 but older than MRA with at least 20 years of service, in which case you can defer your retirement to age 60 without a penalty.  The other benefit with the Immediate Retirement under FERS is that you can continue to keep insurance coverage into retirement, which includes FEGLI, FEHB, Dental, and Vision.

The negatives of the Immediate Retirement under FERS would be that it can conflict with a person’s lifestyle and retirement goals.  If someone doesn’t want to continue working past a certain age and/or they don’t have the length of service requirements, then it can be tough to want to stick it out to qualify for an Immediate Retirement.

The Immediate Retirement under FERS is going to provide the maximum retirement benefits, but it comes at a cost of working longer than one might have hoped.

Sources

https://www.opm.gov/retirement-services/fers-information/eligibility/