FERS Postponed Retirement

A FERS Postponed Retirement allows you to leave federal service once you've reached your Minimum Retirement Age (MRA) and have at least 10 years of creditable service. Instead of starting your pension immediately upon separation, you choose to delay receiving your annuity until a later date.

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Under the Federal Employees Retirement System (FERS), retiring at your MRA with at least 10 years of service qualifies you for early retirement. However, if you begin receiving benefits right away, your annuity will be permanently reduced by 5% for every year (or 5/12 of 1% per month) you're under age 62. By postponing the start of your pension, you can avoid this reduction and receive full, unreduced benefits when you choose to begin your payments later on.

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Understanding Postponed FERS Retirement

If you're thinking about leaving federal service before full retirement age but still want to keep your future pension and health benefits intact, a Postponed FERS Retirement might be the right strategy for you.

To be eligible for a postponed FERS retirement, you must:

• Have at least 10 years of creditable civilian federal service at the time you separate
• Be at or past your Minimum Retirement Age (MRA) when you leave
• Leave your FERS retirement contributions in the system (don't take a refund!)

Later on, once you hit the right age (typically 62), you can contact OPM to initiate your FERS pension.

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Key Distinction: Why "Postponed" Instead of "Immediate"?

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In the retirement classes I lead, one common question comes up:

“If I qualify for MRA+10 at separation, why wouldn’t I just start my pension right away?”

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Great question! You can start drawing your pension immediately under MRA+10, but there’s a catch—a permanent reduction of up to 35%, depending on your age when you start benefits. By postponing your retirement, you can significantly reduce or eliminate that reduction.

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And here’s the real perk: If you were eligible to keep your FEHB (Federal Employees Health Benefits) when you separated, a postponed retirement allows you to reactivate your FEHB in retirement—a benefit that deferred retirees don’t get.

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‍When Is Postponed Retirement a Smart Move?

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If you qualify for full FERS retirement (like MRA+30, age 60 with 20 years, or age 62 with 5 years), there’s typically no reason to postpone—it just doesn’t offer additional benefits.

Postponed retirement is most useful when:

• You’re eligible for MRA+10
• You want to avoid the early retirement reduction

And you’re willing to wait to start your pe

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How Postponed FERS Retirement Actually Works

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Let’s walk through an example.

Say you’ve got 10 years of creditable civilian service and you’ve reached your MRA. You’re ready to leave federal employment—but you don’t want to take the full pension penalty under MRA+10.

Here’s what you’d do:

1. Confirm your eligibility – You need 10 years total, with at least 5 years of civilian service (military time you bought back doesn’t count toward that 5-year minimum).
2. Leave your contributions in the system – Do not withdraw your FERS retirement contributions, or you’ll lose your eligibility for postponed retirement.
3. Wait until age 62 (or a lower age with reduced penalty) – When you’re ready, contact OPM to apply for your pension.

And just like that, you can start your FERS benefits with a reduced—or even eliminated—penalty and still retain access to FEHB.

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Also read - will fers supplement be eliminated

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Difference Between Deferred and Postponed FERS Retirement

Deferred FERS Retirement:

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• Who qualifies?
  You’ve left federal service before your Minimum Retirement Age (MRA) with at least 5 years of creditable service.
• When do you get benefits?
  In FERS deferred Retirement, You can start receiving your pension once you reach MRA or later, depending on your service.
• Key limitations:

• ❌ No access to FEHB (health insurance) or FEGLI (life insurance).
• ❌ No survivor benefits.
• ❌ TSP withdrawals may be subject to early withdrawal penalties.
• ❌ Cost of Living Adjustments (COLAs) don’t start until age 62.

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✅ Postponed FERS Retirement:

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• Who qualifies?
  You meet MRA with at least 10 years of service but choose to delay receiving your annuity.
• Why postpone?
  To avoid or reduce the early retirement reduction penalty (5% per year under age 62).
• Key advantages:

• ✅ You can reinstate FEHB and FEGLI upon drawing your pension.
• ✅ Survivor benefits are available.
• ✅ Avoids TSP early withdrawal penalty.
• ✅ You receive COLAs immediately if under age 62 when you start your annuity.

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In Short:

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