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FERS Deferred Retirement
Old 04-09-2013, 01:17 PM   #1
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FERS Deferred Retirement

Greetings all- Have just left the federal government with 10 1/2 years service and will reach the minimum retirement age (MRA) in September. I know that I can apply for my annuity at that time, however, there is a 5% permanent reduction in the benefit for every year one is under 62 yrs of age (30% for me). I also know that I can defer the annuity to avoid the reduction but don't particularly trust "the system" and that the money will be there in 6 years. Looking for insight from any former feds who chose to defer and what their experiences were. Thanks!
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Old 04-09-2013, 01:27 PM   #2
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If the federal government won't have the money to make your payments, then I don't expect that it will really matter whether you ever get paid. I would wait.
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Old 04-09-2013, 01:54 PM   #3
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I also believe you should wait until 62, if you can afford it. I don't see the point of unnecessarily throwing money away on the reductions like that. One of my coworkers just retired at MRA, but is taking FERS, permanent reductions and all. I don't understand that. Also, if you take it under 62 you won't get COLA until you are 62.
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Old 04-09-2013, 05:27 PM   #4
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Why didn't you wait until you were MRA, you are so close? By leaving early, you lose your health insurance. Are you covered elsewhere? I hope so, i would hate to know that you left early without knowing. I may leave at MRA because my reduced pension won't break me, and I would like to have the health insurance benefit.
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Old 04-09-2013, 10:27 PM   #5
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I'm under FERS and just hit 20 years of service in Febuary. Monday, May 13th will be my 56th birthday and that is also my MRA (ding, ding, ding). I am resigning on May 17th, but will take the last week as vacation. My last day in the office will be Friday, May 10th.

I am postponing the pension and health care until I am 60 to avoid the 30% penalty. Since I have 20 years, I don't have to wait until I am 62 to begin the pension penalty free.

I will go on COBRA for the first 18 months, then either roll that into a similar plan with BCBS or get something through the ACA until I reach 60.

Hopefully by then, my same sex partner of 25 years will be able to go on my health care plan. Her employer recently dropped health care for retirees.

I too am curious as to why you left before your MRA.
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Old 04-10-2013, 10:08 AM   #6
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Hi all-thanks for the responses. I was given a directed reassignment only 2 months after a voluntary reassignment (finally) home to Florida. I had been away from home, more or less, for 9 years and had just gotten settled. Plus there was going to be NO PCS to move once again. Since I don't participate in FEHB, the difference in my eventual benefit did not outweigh the costs of relocating even for 6 months. My only benefit loss is getting no credit for over 600 hours of sick leave (since I didn't meet both requirements). I am going to try and hold off on the annuity as long as possible to reduce the age penalty.
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Old 04-10-2013, 11:19 AM   #7
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I retired in 2009 at age 61.5, on "MRA+10", six months before my 62nd birthday, and decided to go ahead and take my FERS annuity/pension immediately. So, my monthly FERS deposit is reduced a little. (I am calling it an "annuity/pension", since I believe that technically it is supposed to be called an annuity but it is not what most people would call an annuity; it is essentially a pension).

I had two reasons for doing this:

First, I felt the same way you do about not trusting what might happen. Once your FERS annuity/pension is in place, it is easy to trust the system but it is not so easy beforehand.

Second, in my case I had FEHB to worry about and was afraid I would get "deferred" and "delayed" mixed up (one allows you to keep your FEHB and one doesn't, apparently? I am so clueless sometimes). I waited two years past FI for retiree FEHB, so no way was I going to take a chance of messing up and losing it.

At any rate, it seemed simpler to just take my FERS annuity/pension immediately. The 2.5% reduction was just $17/month, in my case, because frankly, my FERS annuity/pension was already pretty tiny. It was worth $17 to me to slide in under the wire, just barely before OPM started taking so long to process retirements. I only had to wait 86 days to be finalized but sometimes it takes a lot longer these days. I would have been sick with worry if I had to wait as long as some folks do these days.
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Old 04-10-2013, 11:33 AM   #8
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Thanks for the insight. Fortunately I have carried over my health benefits for life from my first career so I did not participate in any Fed benefits (other than a small life insurance). The big question is my trust in OPM and my (former) agency to properly file my paperwork so it is there in 6 years. I will be anxiously waiting to see my final SF 50 to ensure that at least the dates of service are correct.
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Old 04-10-2013, 11:38 AM   #9
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Quote:
Originally Posted by Scubablue View Post
Thanks for the insight. Fortunately I have carried over my health benefits for life from my career so I did not participate in any Fed benefits (other than a small life insurance. The big question is my trust in OPM and my (former) agency to properly file my paperwork so it is there in 6 years. I will be anxiously waiting to see my final SF 50 to ensure that at least the dates of service are correct.
It is easy to say, "Don't worry!" from my position, with that monthly deposit coming in like clockwork every month. But honestly I was worried just like you are. It is so easy to fall between the cracks in a big system like OPM. They did not tell me anything while they were working on my retirement application. I had no idea whether or not they even had it, for a long time. And then, it is kind of unnerving to hand over my badge, and to know that I cannot even get back into my workplace to talk to personnel if there are any problems that they could help with. I admit it; once OPM had finalized my retirement application and that first full deposit showed up in my checking account, I breathed a huge sigh of relief.

If you do decide to wait before taking your pension/annuity, I'd suggest at the very least taking down some names and phone numbers to call in case of problems, before your last day.
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Old 04-10-2013, 04:49 PM   #10
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Quote:
Originally Posted by Scubablue View Post
Hi all-thanks for the responses. I was given a directed reassignment only 2 months after a voluntary reassignment (finally) home to Florida. I had been away from home, more or less, for 9 years and had just gotten settled. Plus there was going to be NO PCS to move once again. Since I don't participate in FEHB, the difference in my eventual benefit did not outweigh the costs of relocating even for 6 months. My only benefit loss is getting no credit for over 600 hours of sick leave (since I didn't meet both requirements). I am going to try and hold off on the annuity as long as possible to reduce the age penalty.
Scubablue, it sounds like you have already been hosed by OPM and/or your HR office.

You should have received half credit for your 600 hrs of sick leave balance in your FERS annuity calculation: Don't retire from FERS in 2013 | GubMints
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Old 04-10-2013, 06:12 PM   #11
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Quote:
Originally Posted by Helen View Post
I'm under FERS and just hit 20 years of service in Febuary. Monday, May 13th will be my 56th birthday and that is also my MRA (ding, ding, ding). I am resigning on May 17th, but will take the last week as vacation. My last day in the office will be Friday, May 10th.

I am postponing the pension and health care until I am 60 to avoid the 30% penalty. Since I have 20 years, I don't have to wait until I am 62 to begin the pension penalty free.

I will go on COBRA for the first 18 months, then either roll that into a similar plan with BCBS or get something through the ACA until I reach 60.

Hopefully by then, my same sex partner of 25 years will be able to go on my health care plan. Her employer recently dropped health care for retirees.

I too am curious as to why you left before your MRA.
Best wishes for you and your partner. My husband and I have been together nearly 40 years. Can't imagine him not being able to share what we've built up together. The times they are a-changin'....
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