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TSP Fund Allocation Advisory

Pension Eligibility

These are the qualifying ages and corresponding number of years of service at retirement that are necessary for federal retirement benefits to be paid with “no strings attached” or reductions in payments.

For CSRS

Age 55 and 30 years of service at retirement

Age 60 and 20 Years of service at Retirement

Age 62 and 5 Years of service at Retirement 

For FERS

MRA and 30 years of service at retirement

Age 60 and 20 Years of service at retirement

Age 62 and 5 Years of service at retirement 

MRA Plus 10

If you are under the FERS system and have met your Minimum Retirement Age, you can receive your pension with just 10 years of service at retirement, but there is a catch. For every year that you are under age 62, your pension will be reduced by 5%. However, if you retire but don’t start collection your pension until age 62, there will be no reduction. This is not an “all or none” rule i.e. if you take your pension at age 60, the reduction will be 10% not the 25% that exists if you started taking your pension at age 57. 

Your Pension Calculation 

For FERS

If you are 62 years of age and have 20 or more years of service, the formula is:

1.1% X the number of years of federal service X Your High Three

If you don’t meet both criteria above, the 1.1% drops down to 1.0%

-Examples- 

         FERS federal employee with 20-years federal service and age 62 at    

         retirement with a High Three of $100,000:

1.1% X 20=22% X $100,000 = $22,000 Annual Pension

If that 62 year old federal employee retired at age 61 instead of age 62:

1.0% X 20=20% X $100,000 = $20,000 Annual Pension

If that 62 year old federal employee retired with 19 years instead of 20:

1.0% X 19=19% X $100,000 = $19,000 Annual Pension 

For CSRS Employees

1.5% of your High Three for your first 5 years of federal service

1.75% of your High Three for your next 5 years of federal service

2.0% of your High Three for every year of federal service thereafter

Example

CSRS Federal Employee age 62 with 20 years of Federal Service at Retirement and a High Three of $100,000

1.5% X $100,000 = $1500 X five =$7,500

1.75% X $100,000 = $1750 X five = $8,750.00

2.00 % X $100,000 = $2000 X ten = $20,000

$7500 + $8750 + $20,000 = Annual Pension of $36,250