How Many Years of Federal Service to Retire?
Understand the minimum service years required for federal employees to retire. Navigate eligibility criteria for a secure retirement.
Eligibility for federal retirement benefits depends on several factors, including an employee’s age and the specific federal retirement system under which they are covered. This article clarifies the service requirements necessary to retire from federal employment, providing a comprehensive overview of the different scenarios and how creditable service is calculated.
Understanding Federal Retirement Systems
The federal government operates two primary retirement systems for its civilian employees: the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS). The CSRS is the older system, covering most federal employees hired before January 1, 1984. Employees under CSRS generally do not pay Social Security taxes and do not receive Social Security benefits unless they qualify through other employment. This system offers a defined benefit pension plan.
FERS covers federal employees hired after December 31, 1983. This system is a three-tiered program, combining a basic benefit plan (pension), Social Security benefits, and the Thrift Savings Plan (TSP), which includes government matching contributions. The distinctions between CSRS and FERS are significant, impacting retirement eligibility and benefit structures.
Service Requirements for Voluntary Retirement
Voluntary retirement under federal service depends on a combination of age and years of creditable service. For employees covered by the Federal Employees Retirement System (FERS), the Minimum Retirement Age (MRA) varies from 55 to 57 based on the employee’s birth year. For instance, if born before 1948, the MRA is 55, while for those born in 1970 or later, it is 57.
To qualify for an unreduced immediate retirement benefit under FERS, employees must meet specific age and service combinations. These combinations include reaching their MRA with at least 30 years of creditable service, or being age 60 with 20 years of service. Another option is to retire at age 62 with at least 5 years of creditable service.
For employees under the Civil Service Retirement System (CSRS), the voluntary retirement age and service requirements differ. An unreduced immediate annuity is available at age 55 with 30 years of service, at age 60 with 20 years of service, or at age 62 with 5 years of service. It is important to note that CSRS employees generally need to have served in a CSRS-covered position for at least one of the last two years before retirement.
Calculating Creditable Service
The calculation of “years of federal service” for retirement eligibility includes various types of employment. Creditable service encompasses periods of federal civilian service during which retirement deductions were withheld from an employee’s pay. This includes service under career or career-conditional appointments.
Military service can also be creditable for retirement if it was active service, terminated under honorable conditions, and performed prior to separation from civilian service. To receive credit for military service performed on or after January 1, 1957, a deposit, known as “military buyback,” is required. This deposit amounts to 3% of the base pay earned during military service for FERS employees and 7% for CSRS employees. If the deposit is made within three years of federal employment, interest charges may be waived, but interest begins to accrue thereafter.
Temporary or intermittent federal service performed before 1989, where retirement deductions were not initially withheld, can become creditable if a deposit is paid. Unused sick leave under FERS can increase an individual’s total creditable service for annuity computation, but not for determining eligibility. Combining service under different systems, such as CSRS Offset or FERS-CSRS component, involves specific rules for crediting all service periods.
Other Retirement Eligibility Scenarios
Beyond standard voluntary retirement, federal employees may be eligible for other retirement scenarios with differing service requirements. Early Voluntary Retirement, available under the “MRA+10” provision for FERS employees, allows retirement at an employee’s Minimum Retirement Age (MRA) with at least 10 years of creditable service, but less than 30 years. This option results in a permanent reduction of benefits, by 5% for each year the employee is under age 62.
Disability retirement is another scenario, available when an employee is unable to perform job duties due to disease or injury. For FERS employees, 18 months of creditable civilian service is required for eligibility. CSRS employees generally need 5 years of service to qualify. The disability must be expected to last at least one year and render the employee unable to perform useful and efficient service in their current position.
Certain occupations, due to their demanding nature, have “Special Provisions” for retirement, allowing for earlier eligibility. These include Law Enforcement Officers (LEOs), Firefighters, and Air Traffic Controllers. For these roles, retirement may be possible at age 50 with at least 20 years of service, or at any age with 25 years of service. These provisions account for the rigorous physical and mental requirements of these professions, and include mandatory retirement ages, such as age 57 for LEOs and firefighters, and age 56 for air traffic controllers.