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Summary on 5 Things to Know About Your FERS Annuity
1. Understand your FERS eligibility
2. Know your FERS annuity’s basic formula
3. The minimum retirement age?
4. Know how your Survivor Annuity works
5. Your COLAs will not keep up with inflation
1. FERS Eligibility
As a Federal employee, you are eligible for FERS if any of these categories apply to you:
If your initial career appointment was January 1, 1984, or later; or
If your initial career appointment was prior to January 1, 1984, but then you subsequently had a break in service of 366 days or more and had less than 5 years of creditable civilian service prior to January 1, 1987; or if you are a career employee and you elected to be covered by FERS (instead of CSRS).
2. Basic Formula
The amount of your annuity is simply 1 percent of the high-3 average pay multiplied by total creditable service*. However, if you retire after age 62 and you have at least 20 years of creditable service, the annuity is 1.1 percent of the high-3 average pay multiplied by total creditable service*.
3. Minimum Retirement Age for FERS?
FERS has a provision that allows you to retire with benefits beginning immediately if you have ten years of service and have reached the Minimum Retirement Age (at least 55). However, the annuity is reduced for each month you are under age 62. The reduction equals five percent per year (or 5/12 of one percent per month). To avoid the reduction, you can postpone payment. You can later apply for the benefit by writing to us or filing an “Application for Deferred or Postponed Retirement,” Form RI 92-19. You should submit the form two months before you want the benefit to begin.
4. Survivor Benefits
This type of annuity provides you with reduced annuity payments and, upon your death, provides your current and/or former spouse(s) with survivor annuity payments. An annuity with full survivor benefits to your current spouse is automatic if you are married at retirement unless your current spouse consents to a different election.
Reduction in the annuity to cover survivor benefits
The reduction to your annuity is 10 percent if you choose a full survivor annuity of 50 percent. The reduction is 5 percent if you choose a partial survivor annuity of 25 percent.
5. FERS Benefits Are Not Fully Protected From Inflation
FERS is a combination of federal annuity, Social Security and your TSP investments (plus the available 5 percent match from the government). But because its benefits are not fully protected from inflation, which exceeds 2 percent a year.