Thread: FERS retirement at 62?

I retired last year with 31 years and did the math and the extra .1% was not worth me hanging around another 4 years. I wanted out! I may or may not start my SS withdrawals at 62 and just maybe postpone and start to dip into my TSP until I reach 66.6 years and collect SS then. I'll see where I'm at financially, which way the markets and my investments are heading and then decide. Until I'm at that crossroad....I'm living like there's no tomorrow.

Originally Posted by konakathy

I retired last year with 31 years and did the math and the extra .1% was not worth me hanging around another 4 years. I wanted out! I may or may not start my SS withdrawals at 62 and just maybe postpone and start to dip into my TSP until I reach 66.6 years and collect SS then. I'll see where I'm at financially, which way the markets and my investments are heading and then decide. Until I'm at that crossroad....I'm living like there's no tomorrow.

I have a co-worker who is not in the best of health, and he is staying in to get his extra .1%. I have tried explaining to him, is it really worth working shift-work for several more years just to get a few hundred dollars a month? To him it is. For me, get me the flock outta here!

I've run the math too. for me it's worth it to stay in til 62, bc I can stack another almost 75K into my tsp in those 3 years, not to mention deferring taxes on the same. and I can also squeak some additional into my outside roth accts each of those years, and finish getting agency quals that will enable me to do some post-retirement work in summers helping out with wildfire mgt until I'm 70'ish. which would also allow me to put 2-4K extra into Roth accts each year post-retirement. to meet my mini-farm land purchase-mgt/small biz post-retirement goals, working til 62 will help make it doable. pretty iffy otherwise.

That's the whole thing about retirement. You have to do the math. I may want to retire now but can I afford it? Or, is it worth hanging around another couple of years for an extra $1000 a year? You have to do the math.

Originally Posted by DrDetroit

If you are getting the social security bridge, then that can offset the .1% pension gain at 62. Seems to me the supplement/bridge is one of the best retirement benefits we have, basically free money. What am I missing?

I agree but that supplement/bridge can go away if you get another job.
None of the supplement goes away if you make < $16k.
I around $16k, $1 is taken for every $2 that you earn.
So that around $48k income, your supplement is gone.

Excellent thread. I really appreciate the insight of those of have retired via FERS and can weigh in on the pros and cons of the timing of FERS retirements, sick leave credit, etc. A lot to think about - I am 5.67 years out from age 60 and will have 30.33 years in at that point.

Originally Posted by McDuck

I agree but that supplement/bridge can go away if you get another job.
None of the supplement goes away if you make < $16k.
I around $16k, $1 is taken for every $2 that you earn.
So that around $48k income, your supplement is gone.

Additionally, if you qualify for MRA+30 for FERS retirement <62 and qualified with significant Active-Duty Military time you bought back, well, the "supplement" equation Does Not allow those military years to count (yes, even though we paid SS out of our Military Paychecks... its part of the law with Congress created/enacted FERS). So I'm MRA eligible at 34-years (with 9.3 years of that from US Army time I bought back), so I'd take about a 30% cut to my SS-Supplement payments till age 62 (compounded of course). This isn't "right" but likely won't change; and it factors into my waiting to retire.
I'm about 57; plan to work at least 2-more years, would like to get out then, but I'll only be 3-years away from 62 and +.1 factor, plus the problem with the Supplement above.

Originally Posted by alevin

I've run the math too. for me it's worth it to stay in til 62, bc I can stack another almost 75K into my tsp in those 3 years, not to mention deferring taxes on the same.

This is a pretty good point. The difference in retiring at 57 and 62 in today's money is $120k in TSP contributions, and that certainly isn't an opportunity to dismiss lightly. It all depends on a myriad of variables for each individual, but this one would be very high on my reasons to stay past 57.

Originally Posted by FAAM

Additionally, if you qualify for MRA+30 for FERS retirement <62 and qualified with significant Active-Duty Military time you bought back, well, the "supplement" equation Does Not allow those military years to count (yes, even though we paid SS out of our Military Paychecks... its part of the law with Congress created/enacted FERS). So I'm MRA eligible at 34-years (with 9.3 years of that from US Army time I bought back), so I'd take about a 30% cut to my SS-Supplement payments till age 62 (compounded of course).

And this is why I asked if there was anything I was missing, I did not know this. Pretty huge for me since I bought back 12 years. I did already get an estimate however from my HR department and I was satisfied with the amount, although I have never seriously crunched those numbers since I am so far away from retirement (13 years).

To get a rough estimate of what your SRS would be, use the following formula:

Take your Social Security benefit estimate available from the Social Security Administration, divide it by 40, and multiply the product by your total years of actual FERS service rounded to the nearest whole number.
For example, if your Social Security benefit at age 62 is estimated to be $6,000 and you have 30 years of service, you’d plug those numbers into the following formula to get your answer:
Social Security benefit at age 62 x 30 ÷ 40 or, in this example,
$6,000 x 30 ÷ 40 = $4,500
The amount of your SRS is set on the day you retire. It isn’t increased by cost-of-living adjustments, regardless of how long you receive it, unless you are a special category employee, such as a law enforcement officer or firefighter. Their SRSs are increased by COLAs.

The way I Look at supplement vs 62 yrs:
Example:
supplement at 57=$1200/month X 12 months X 5 years=$72,000
If one decides to stay until 62, you get an extra 10% plus salary increases which would be between $300-$500 depending on your salary base.
@62 = $500 extra every month X12 months X 12 years =$72,000
You need to be alive past 74 years old (62+12) to break even vs what you would have received from 57-62 years old.

However, one must consider additional info:
Supplement- you can work part time as additional income for under the annual max - $15, 720
15720 X 5yrs = $78600
@62 - you get extra 5% a year (TSP gov't matching)from 57-62 years plus your contributions.
$18500X5=$92,500 plus 5% matching.

so, retiring is really dependent on your current financial situation, and how much you enjoy your job, coworkers and mgmt.

supplement is calculated by what your SS would be at 62 e,g. $2500
If you worked 30 years(less any military buyback), you divide 30/40=75%.
$2500 X.75 =$1875.00, your supplement

if your 30 years include 10 years MBB = 30-10=20; 20/40=.50
$2500X.50= $1250.00

now you got me wondering about the temporary time I bought back, not quite half a year's worth, but I didn't have a clue it wouldn't count for supplement calculations. I didn't buy back the time for that, more to get me to 30yrs a little faster, an give me an edge over someone in another position if it came to a RIF. which it might yet before I get to 62. We're hardpressed financially. they'll be counting the days til I retire, wishing I'd go out sooner so they can hurry up and combine my vacated position with someone else's halftime position into a single position. We all know that will be the plan when I leave.

Are you talking about Military Buyback? If you are talking about federal work, it is included in your supplement.
Only MBB an non fed time are excluded

Originally Posted by alevin

now you got me wondering about the temporary time I bought back, not quite half a year's worth, but I didn't have a clue it wouldn't count for supplement calculations. I didn't buy back the time for that, more to get me to 30yrs a little faster, an give me an edge over someone in another position if it came to a RIF. which it might yet before I get to 62. We're hardpressed financially. they'll be counting the days til I retire, wishing I'd go out sooner so they can hurry up and combine my vacated position with someone else's halftime position into a single position. We all know that will be the plan when I leave.