Federal Retirement Supplement (Special Retirement Supplement) Complete Guide

For federal employees under the Federal Employees Retirement System (FERS), one of the most important benefits is the Federal Retirement Supplement, also called the Special Retirement Supplement (SRS). This benefit is designed to bridge the gap between the time a retiree leaves federal service and when they become eligible for Social Security at age 62.

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In simple terms: if you retire before age 62 under FERS immediate retirement rules, you may automatically receive the Federal Retirement Supplement. This extra annuity, paid by the Office of Personnel Management (OPM), is meant to approximate the portion of Social Security you earned through federal service. It is not permanent it ends at age 62 but it can make a significant difference in ensuring your income stability if you choose to retire early.

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The supplement comes with specific eligibility rules, a clear calculation formula, earnings limits, and annual reporting requirements. In this guide, we’ll explain exactly who qualifies, how it’s calculated, how earnings impact the benefit, and why some retirees may decline it. By the end, you’ll have a full understanding of how the Federal Retirement Supplement works in 2025.

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Immediate FERS Retirement Rules

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Social Security is one of the three components of the FERS retirement. When a FERS employee retires before age 62 under the immediate retirement rules, the first lifetime monthly FERS annuity checks will begin one or two months after the employee’s retirement date.

The table below summarizes the several types of immediate retirement available under FERS:

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When a FERS employee retires under these rules between their Minimum Retirement Age (MRA) (55 to 57 depending on birth year), they will immediately receive their FERS annuity. Retirees can also take penalty-free withdrawals from their traditional TSP account. But the earliest age to collect Social Security retirement benefits is 62.

Since many FERS employees retire before age 62, OPM automatically pays the Special Retirement Supplement until the retiree reaches that age.

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Calculation of the SRS Annuity

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The Federal Retirement Supplement is meant to mimic the portion of Social Security you earned from federal service. OPM calculates it using this formula:

Supplement=Estimated SS Benefit at 62×(Years of FERS Service40)\text{Supplement} = \text{Estimated SS Benefit at 62} \times \left(\frac{\text{Years of FERS Service}}{40}\right)Supplement=Estimated SS Benefit at 62×(40Years of FERS Service​)

For example, if your estimated Social Security benefit at 62 is $1,600 per month, and you have 30 years of FERS-covered service, your supplement would be:

$1,600×3040=$1,200 per month\$1,600 \times \frac{30}{40} = \$1,200 \text{ per month}$1,600×4030​=$1,200 per month

It’s important to note that this is only an estimate, and OPM’s exact calculations may differ.

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The Special Retirement Supplement (SRS) annuity is automatically issued by OPM to eligible FERS retirees. However, retirees have the option to decline it by notifying OPM in advance.

Key points to know about the SRS annuity:

• It does not receive cost-of-living adjustments (COLAs).
  
  
• Payments stop automatically in the month the retiree turns age 62.
  
  

Some retirees choose to decline the SRS, particularly if they plan to return to work after leaving federal service. This is because earnings from post-retirement employment can reduce or even eliminate the SRS benefit if they exceed the allowable “exempt amount.”

Important details regarding reductions:

• The earnings test applies only to the SRS annuity, not to the regular FERS annuity.
  
  
• For employees retiring under Special Provisions (Law Enforcement Officers, Firefighters, Air Traffic Controllers, and Customs & Border Protection Officers), the earnings reduction does not apply until they reach their Minimum Retirement Age (MRA).
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Earnings Test and Exempt Income

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The SRS is subject to the earnings test the same rule applied to early Social Security benefits.

• In 2024, the exempt earnings amount was $22,320.
  
  
• In 2025, this amount is expected to increase slightly in line with Social Security adjustments.
  
  
• Income above the exempt limit reduces the SRS by $1 for every $2 earned.
  
  

Important:

• This reduction applies only to the SRS, not the FERS annuity.
  
  
• Special provision retirees (law enforcement, firefighters, air traffic controllers, CBP) are exempt from the earnings test until they reach their MRA.
  
  

Examples of Reduction

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• Phyllis: Retired in June 2020 at 57 with 30 years of service. She immediately qualified for SRS. If she earned more than $18,240 in 2020, her SRS was reduced accordingly.
  
  
• Donald: Retired in 2019 at 52 as a federal firefighter. He received SRS right away. Because he was a special provision employee, his SRS wasn’t subject to the earnings test until he reached his MRA in 2021.
  
  

Reporting Earnings to OPM

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Every year, retirees must report their income using Form RI 92-22 (Annuity Supplement Earnings Report).

• OPM sends the form annually to FERS retirees at or past their MRA who are receiving the SRS.
  
  
• For example, in 2025, retirees will report their 2024 income.
  
  
• Wage data comes from W-2 Box 3 (Social Security wages).
  
  
• Self-employment data comes from Form 1040 Schedule SE.
  
  

Failure to report accurately can result in overpayment demands or suspension of benefits.

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FAQ'S

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1. What is the Federal Special Retirement Supplement (SRS)?

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The Special Retirement Supplement (SRS) is an additional benefit paid to certain FERS (Federal Employees Retirement System) retirees.

• It’s designed to bridge the income gap between the time a retiree stops working and when they first become eligible for Social Security at age 62.
  
  
• The payment is meant to represent the Social Security benefit earned during federal service only.
  
  
• It is not paid after age 62 at that point, retirees transition to actual Social Security.
  
  

2. What is the warning about the FERS Supplement?

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The “warning” is that:

• The SRS is not permanent. It ends at age 62 regardless of whether you claim Social Security.
  
  
• It is subject to an earnings test similar to Social Security. If you earn income from wages or self-employment above the annual limit ($22,320 in 2024), your supplement is reduced $1 for every $2 earned above the limit.
  
  
• Some federal employees mistakenly assume the supplement continues indefinitely or is unaffected by outside earnings—that’s the big caution.
  
  

3. Will the FERS Supplement be eliminated in 2025?

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• As of now (August 2025), the FERS Supplement has not been eliminated.
  
  
• In recent years, there have been proposals in Congress to eliminate or reduce the supplement as a cost-saving measure, but none have passed into law.
  
  
• Retirees who qualify in 2025 are still eligible to receive it under current rules.
  
  

4. How much is the FERS Supplement per month?

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The amount depends on your years of federal service and your estimated Social Security benefit at age 62.

Formula (simplified):

FERSSupplement≈(Years of FERS Service ÷ 40)×Age-62 Social Security BenefitFERS Supplement ≈ \text{(Years of FERS Service ÷ 40)} × \text{Age-62 Social Security Benefit}FERSSupplement≈(Years of FERS Service ÷ 40)×Age-62 Social Security Benefit

Example:

• If your projected Social Security at 62 is $1,600/month
  
  
• And you worked 30 years under FERS
  
  

30÷40=0.750.75×1,600=1,20030 ÷ 40 = 0.75 0.75 × 1,600 = 1,20030÷40=0.750.75×1,600=1,200

You would receive about $1,200/month until age 62.

In practice, many retirees receive between $800–$1,200 per month, but it varies widely by service time and salary history.

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