The FERS and You:

What You Should Know About Your Federal Employee Retirement (FERS) Benefits

As an employee of the federal government, you have great benefits through the Federal Employee Retirement System (FERS). But those great benefits are also convoluted, often making it difficult to understand how they can and should be applied to achieve a comfortable life in retirement.

This article will cover your FERS basic benefit plan. You will learn everything from how to determine your retirement eligibility to how your FERS income will be taxed.

We have been helping federal employees make a smooth and confident transition into retirement for many years at Minerva Planning Group, and we hope that this information can help you make a similar transition into the retirement you have worked so hard to attain.

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HOW DO I KNOW THE AGE AT WHICH I CAN RETIRE?

When you retire from federal service, you will receive three forms of income.

THREE INCOME SOURCES FOR FEDERAL GOVERNMENT EMPLOYEES

FERS basic benefit plan payments

Thrift Savings Plan distributions

Social Security benefits

The government calls your Federal Employee Retirement System benefit plan an annuity, but since its structure is similar to private-sector defined benefit pensions, we will refer to it as a pension in this article.

When determining the age at which you can retire and collect your FRS pension, you can use the formula that the government provides. At first glance, the formula seems simple; however, as with many of your federal benefits, once you delve deeper, the apparent simplicity becomes complex. The formula is:

Retirement Eligibility = Your Age + Number of Years of Creditable Service*

*Your creditable service is the length of your federal employment that is eligible for the FERS retirement. For a fuller explanation of creditable service, visit the OPM’s webpage on the topic.

DETERMINING MRA

In some cases, you must have reached a minimum retirement age (or MRA) to receive benefits. Your MRA depends on your birth year. You can use the following chart to determine your MRA.