MRA+10 Retirement: Should You Start Now or Postpone?

A Federal Employee’s Guide from the Field

If you’re a federal employee approaching your Minimum Retirement Age (MRA) with at least 10 years of service, you’ve probably heard of the MRA+10 retirement option.

In theory, it sounds simple: reach your MRA, have 10 years of service, and you can retire. But as we often tell clients, the timing of when you start your annuity can dramatically impact your lifetime income and benefits.

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In our experience advising federal employees through this decision, the MRA+10 provision is best thought of as a flexibility clause one that gives you the option to leave federal service early without walking away from your pension entirely. The key is knowing how to use it wisely.

Let’s walk through what it really means, who qualifies, and how to avoid the costly mistakes we see far too often.

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Understanding MRA+10: The Flexibility Built into FERS

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Under the Federal Employees Retirement System (FERS), you become eligible for an immediate pension (annuity) once you reach your Minimum Retirement Age and have at least 10 years of creditable service.

Your MRA depends on your birth year:

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To qualify, you must also have at least five years of civilian service under FERS and separate from a FERS-covered position.

So if you’re 57 with 12 years of service, you meet the basic requirements. You can retire right now under MRA+10 but there’s a trade-off.

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The 5% Age Reduction Rule

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If you begin your MRA+10 annuity before age 62, your pension is permanently reduced by 5% for every year you’re under 62.

That’s roughly 5/12 of 1% per month.

Here’s what that looks like in real life:

• Let’s say your unreduced FERS pension would be $18,000 per year.
  
  
• If you retire at 57 five years before 62 your benefit is reduced by 25%.
  
  
• Your new pension becomes $13,500 per year, or $375 less per month, for life.
  
  

We’ve met many employees who didn’t realize this reduction was permanent until after they filed. Once your annuity starts, there’s no way to undo that choice.

That’s where postponing your retirement comes in.

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Why Postponing Often Pays Off

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If you meet the age and service requirements but want to avoid or lessen that 5% cut, you can postpone starting your annuity until a later age such as 60 or 62.

This means you separate from service but wait to “turn on” your pension later.

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We often help clients model this exact trade-off. For example, one client retired from DHS at age 57 with 15 years of service. Instead of starting her annuity immediately (and taking a 25% reduction), she waited until 62. That decision added roughly $5,000 per year to her pension for life and preserved her eligibility to restart FEHB and FEGLI coverage.

Here’s a simple comparison:

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When you look at the math, postponing often makes sense especially if you can bridge a few gap years with other income or TSP withdrawals.

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Protecting Your Health and Life Insurance

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This is where many employees make a costly mistake: confusing postponed retirement with deferred retirement.

Here’s the key difference:

• Postponed retirees can reinstate FEHB and FEGLI coverage once their annuity begins, provided they met the 5-year coverage rule before separating.
  
  
• Deferred retirees cannot. Once you defer, your FEHB and FEGLI are gone for good.
  
  

In our experience, this single misunderstanding has cost some federal employees hundreds of thousands of dollars in lifetime health benefits. If you’re leaving federal service before 62, take time to verify whether your path allows FEHB reinstatement later.

During the “gap years,” you may use Temporary Continuation of Coverage (TCC) for up to 18 months or bridge coverage through a spouse’s plan or private insurance.

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The FERS Supplement: Don’t Count on It

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Another common surprise is the FERS Annuity Supplement the benefit designed to “bridge” your income until age 62.

If you retire under MRA+10, you do not receive the supplement. It’s only available to those with full, unreduced retirements (like MRA+30 or 60 with 20 years).

If your plan includes leaving early, you’ll want to account for that missing income. Many of our clients use TSP withdrawals or part-time consulting to fill that gap until Social Security eligibility begins.

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Funding the Gap Years

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If you separate under MRA+10 but postpone your annuity, you still need income during those gap years. Here’s what we typically help clients evaluate:

• TSP withdrawals: If you leave service in or after the year you turn 55 (50 for law enforcement/firefighters), you can take TSP withdrawals without the 10% early withdrawal penalty.
  
  
• Part-time or contractor work: Common among retirees in technical or management roles provides income without locking in a reduced pension.
  
  
• Savings or Roth withdrawals: Tax-efficient sources to bridge until annuity begins.
  
  

We’ve guided many employees through this phase, and the pattern is clear: those who plan 2–3 years ahead rarely feel financial pressure to “retire early just to get something.”

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Real-World Examples

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Case 1: Immediate MRA+10
Lisa, age 57 with 12 years of service, decides to retire and start her annuity right away. Her FERS pension is reduced 25%, from $2,000 to $1,500 a month.

Case 2: Postponed MRA+10
Marcus, also 57 with 12 years of service, separates but waits until 62 to claim his annuity. His pension starts at the full $2,000/month, and his FEHB coverage restarts seamlessly.

Marcus’s decision adds $6,000 a year for life over $120,000 if he lives to 82. Same career, same service time just smarter timing.

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When to Seek Professional Guidance

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MRA+10 retirement looks simple on paper, but as we often remind clients, the paperwork is the easy part the timing is the art.

There are layers to consider:

• Will postponing affect your spouse’s survivor benefit?
  
  
• How will FEHB reinstatement line up with your new coverage?
  
  
• What’s the best age to restart your annuity for tax efficiency?
  
  
• How should TSP withdrawals fit into your bridge plan?
  
  

In our experience, employees who make these decisions with a federal benefits–specialized advisor often preserve tens of thousands of dollars in lifetime value and avoid paperwork headaches that can delay benefits for months.

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Key Takeaways

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• MRA+10 gives flexibility to leave early, but starting too soon triggers a 5% annual reduction before 62.
  
  
• Postponing your annuity can avoid the penalty and protect FEHB/FEGLI eligibility.
  
  
• Deferred retirement means losing your health and life insurance coverage permanently.
  
  
• MRA+10 retirees are not eligible for the FERS supplement, so plan to bridge the income gap.
  
  

With careful planning, you can turn the MRA+10 rule into a strategic early-retirement option not a costly shortcut.

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‍Let’s Build Your Federal Retirement Plan

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If you’re nearing your MRA or considering leaving service with 10+ years under FERS, this is the time to plan not guess.

Our team specializes in federal retirement income planning, helping employees align their TSP, FERS annuity, and FEHB decisions for a smooth and confident transition into retirement.

Schedule your complimentary consultation today, and let’s build your personalized MRA+10 strategy one that fits your timeline, minimizes tax, and keeps your benefits intact.

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Related tags:

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FERS COLA 2025

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Disclaimer: This article is for educational purposes only and does not constitute individualized retirement or investment advice. Always consult with a qualified fiduciary advisor before making benefits or retirement decisions. The author and firm are not affiliated with or endorsed by the Thrift Savings Plan, the Federal Retirement Thrift Investment Board (FRTIB), or any U.S. government agency.

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