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  • Question

  • Should I take a early civil service retirement (FERS)?

    Asked on 3/8/2008

    I have an opportunity to take an early retirement with the federal government. I am under the FERs system. Doing so, I will be able to immediately draw an annuity with no reduction in annuity based on 22 years of service. I am 53 years old. My original plan was to retire in 3 more years, and defer my annuity (which I won’t can't draw till age 62 because I would have to take a reduction based on years under 62) based on 25 years of service. The difference in me waiting 3 more years is about $400, which I still would’t be able to draw for 6 years. So basically I am able to draw 9 years early with a lower annuity. Also by taking an early retirement I would be able to draw a special supplement at age 56 through 62. The purpose of this supplement is to provide a level of income before age 62 similar to what I would receive at age 62 as part of a Social Security benefit. So does it make sense for me to retire? I will still work another job but not civil service.

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  • Categories: Federal Employee Retirement System - FERS, Pensions and Retirement Benefits

Answers

  • NewRetirement User

    71 year old from Rochester, NY

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  • Hi Ctay,

    Basically what you need to do is run an analysis to see where the breakeven point is for the two options. An example of what this looks like for whether to take social security at age 62 vs. 66 can be found at the link below:

    http://www.newretirement.com/Services/Social_Security_Start_Age_Calculator.aspx

    Does your employer's HR group offer any tools to help you model what the breakeven point is? There are a number of variables to consider including the benefit levels for each option, plus the projected change in your income from switching jobs.

    Bud Hebeler's site http://www.analyzenow.com/ has some good free programs to help you explore this yourself.

    You may also want to talk with Financial Advisor about your decision. This section gives you some background on the considerations for choosing a Financial Advisor.
    http://www.newretirement.com/Services/Professional_Financial_Advisors.aspx

  • Login to rate this answer:   Answered on 3/8/2008
**All above answers are provided as general information only. No warranty is made regarding the fitness or accuracy of the information provided in this answer. You should seek advice from a licensed CPA, attorney or CERTIFIED FINANCIAL PLANNER™ as to your unique financial situation.