When Can You Retire From Federal Government?

Federal government employees have access to structured retirement systems designed to provide financial security after their careers. Understanding the specific eligibility criteria for these systems is important for federal employees planning their careers and future finances. The federal retirement landscape can appear complex due to the different systems and rules that govern eligibility and benefits. Familiarizing oneself with these regulations is important for understanding when and how one can retire from federal service.

Understanding Federal Retirement Systems

The two primary federal retirement systems are the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS). CSRS generally covers employees hired before January 1, 1987. The CSRS is a defined benefit plan, meaning the annuity amount is predetermined by a formula based on years of service and salary.

FERS covers most new federal employees hired on or after January 1, 1987, and those who voluntarily switched from CSRS to FERS. This system comprises three main components: a basic FERS annuity, Social Security benefits, and the Thrift Savings Plan (TSP). The TSP is a defined contribution plan, similar to a 401(k), with government contributions and employee matching options. Eligibility rules for retirement differ significantly between CSRS and FERS, making it important for employees to know which system applies to their service.

Voluntary Retirement Eligibility

The specific age and service requirements for voluntary retirement depend on whether an employee is covered by FERS or CSRS. Meeting both the age and service conditions concurrently is necessary for eligibility.

Under FERS, employees can retire at their Minimum Retirement Age (MRA) with 30 years of creditable service. Alternatively, employees aged 60 with 20 years of service, or those aged 62 with 5 years of service, are eligible for an immediate annuity. The Minimum Retirement Age varies based on an employee’s birth year: if born before 1948, the MRA is 55; for those born in 1948, it is 55 and 2 months, increasing incrementally to 57 for those born in 1970 or later.

For employees covered by CSRS, an employee can retire at age 55 with 30 years of service. Eligibility also extends to those aged 60 with 20 years of service, or individuals aged 62 with 5 years of service. These age and service combinations allow for an immediate unreduced annuity.

Other Retirement Eligibility Scenarios

Beyond standard voluntary retirement, other scenarios allow federal employees to qualify for retirement benefits. These pathways have their own specific eligibility conditions under both FERS and CSRS.

Voluntary Early Retirement Authority (VERA) is offered during agency reorganizations, downsizing, or workforce restructuring. Under a VERA, eligibility requires employees to be at least age 50 with 20 years of creditable federal service, or to have 25 years of creditable service at any age. This authority temporarily lowers the age and service requirements from standard retirement rules. An agency must receive approval from the Office of Personnel Management (OPM) to offer VERA.

Deferred retirement is an option for employees who leave federal service before meeting immediate retirement criteria but have sufficient creditable service. For FERS, an employee with at least 5 years of civilian service can apply for a deferred annuity, payable at age 62 or their MRA. Under CSRS, an employee with at least 5 years of creditable civilian service is eligible for a deferred annuity at age 62.

Disability retirement is available to employees unable to perform their job duties due to a medical condition. For FERS, an employee must have completed at least 18 months of creditable federal civilian service and be disabled for useful and efficient service in their current position. The disability must be expected to last at least one year. Under CSRS, an employee must have at least 5 years of creditable civilian service and meet disability criteria. The agency must certify it cannot accommodate the employee’s medical condition or reassign them.

Counting Your Service Credit

Counting service credit is important for federal employees to determine their retirement eligibility and potential retirement date. Various types of service contribute to meeting the required years of service.

Creditable civilian service includes most full-time and part-time federal employment, provided proper retirement contributions were made. This service is documented in an employee’s Official Personnel Folder (OPF) and is used for calculating eligibility and annuity.

Military service can also be credited toward federal retirement, potentially allowing employees to meet service requirements sooner. To receive credit for active duty military service performed after 1956, employees undergo a “military buyback” process, which involves depositing funds equal to a percentage of their military earnings. For FERS, this deposit is 3% of base military pay, and for CSRS, it is 7%. If the deposit is made within three years of civilian service, no interest is assessed, but interest accrues thereafter. Most military retirees cannot receive credit for federal civil service purposes unless they waive their military retired pay, with limited exceptions.

Temporary service can count towards creditable service. If proper contributions were not made during temporary employment, employees have the option to make a deposit to convert that service to creditable time.

Unused sick leave can extend an employee’s creditable service for annuity computation, but it does not count towards meeting the minimum service requirements for retirement eligibility. When an employee retires, accumulated unused sick leave hours are converted into additional months and days of service for the annuity calculation. For FERS employees retiring on or after January 1, 2014, 100% of unused sick leave is credited towards their annuity, while CSRS employees also receive 100% credit regardless of retirement date.

The Retirement Application Process

Once an employee has determined their eligibility and gathered all necessary information, the retirement application process involves several steps. This process begins with contacting the agency’s Human Resources (HR) or Benefits Office.

The HR office provides the necessary forms, which include Standard Form (SF) 3107 for FERS applications and SF-2801 for CSRS applications. These forms are comprehensive and require detailed personal and service information. Employees should read the instructions to ensure accurate completion, as errors can delay processing.

Along with the application forms, employees must submit various supporting documents. Common requirements include birth certificates, marriage licenses if applicable, and military discharge papers (DD Form 214) if military service is being credited. It is advisable to maintain copies of all submitted documents.

The completed application package is submitted to the agency’s HR office. The agency then reviews and forwards the application to the Office of Personnel Management (OPM) for final adjudication. Employees should anticipate that the processing of retirement applications can take an average of three to five months, during which time they may receive interim pay before final annuity payments begin. OPM is the final authority on retirement benefit computations.