The minimum age at which a federal employee may retire is under the Federal Employees Retirement System (FERS) and allows for a retirement age lower than 65.
The minimum age will establish the point at which a person can retire when they have completed sufficient years of service: this may vary depending on the employee’s year of birth.
Understanding the minimum retirement age
When talking about the minimum retirement age for an eligible employee, the reference is 57 years old. However, it should note that this average depends on birth year. Retirement at age 57 is possible for people born after 1970.
However, if the worker was born before 1948, the retirement age was 55. When the worker was born in 1963 or 1964, the retirement age was 56. That implies that workers born before 1963 were able to have their minimum retirement age before 2019.
What is the federal retirement age calculation, and how to understand it?
As we indicated above, the minimum retirement age for a federal employee abides by the Federal Employees Retirement System (FERS).
The retirement calculation in this system is based on a fairly common rule when it comes to computing how a person can retire: it is what is called the Rule of 80. According to this formula, the combined 80 years must be reached when age and federal service rendered is added: it is then when you can realize retirement.
For example, we could say that a person who starts working in Federal service at age 25 and works 28 years until age 53 has already reached the Rule of 80 (in fact, the sum of 53 + 28 would result in 81). However, here comes into play the application for minimum retirement age. If you applied the minimum retirement age rule at age 57, you would still have four years of work remaining. You would have slightly less since time fractions are counted.
Suppose an employee wishes to retire as soon as he/she becomes eligible. In that case, the system allows for six more years of contributions on his/her part and the waiver of six years of annuity payments: they would have to wait until the minimum retirement age is reached.
The possibility of retiring at the minimum age does not mean you are required to do so. Under the rules of the Social Security Administration, it is possible to retire early at age 62. Many federal employees retire at age 60 even when they are eligible to do so earlier.
Different retirement scenarios
It is important to remember that there are different keys and scenarios to try to understand some other retirement models.
For example, involuntary separation from work may occur along with reducing or reorganizing federal labor resources. In this case, it is important to meet the eligibility rules: minimum of 20 years of service and, in the case of those under age 50, a minimum of 25 years of service.
In the case of disability, must certify non-disability accommodation in regular jobs. In this case, a worker with at least 18 months of service and disability for their usual tasks is a candidate.
A relevant aspect is that workers can also delay or defer benefits. That can occur when work is stopped before an immediate retirement. In that case, it is necessary to credit at least five years or more of service with a minimum age of 62. If ten years of service are credited but less than 30, a 5% reduction is applied for each year less than 62. The exception is when 20 years of service have been reached, and the worker retires at age 60 or more.
On the other hand, in the case of retirement benefits, the worker becomes eligible within 30 days of the last employment performed. However, it will depend on previous periods of service and ages. For example, at age 62, the worker must at least accumulate five years of service.
When the minimum retirement age has been reached, it is possible to obtain benefits immediately with 10 to 30 years of service. Logically, some reductions are applied when having less than 30 years of service: specifically, a 5% reduction per year less than 62. However, there is an exception to this, i.e., having completed 20 years of service and retiring at age 60 or more.