As a federal employee, you know that your comprehensive retirement package is one of the best benefits packages available. Yet, for one reason or another, you might desire to leave federal employment at some point. Perhaps you become disabled and can’t continue working, or you simply receive a lucrative offer from a private employer. With regard to your FERS annuity, you might be worried that you’ll lose it all if you separate from employment early.
It’s actually a myth that your FERS annuity is an all-or-nothing benefit. You won’t necessarily lose the entire thing just because you leave federal employment before fulfilling retirement requirements.
This myth comes about because of rules regarding “immediate annuities”. It is true that in order to receive an immediate annuity, meaning an annuity that begins in the month following your last day of service, you must fulfill the following requirements:
- 5 years of service at age 62, or
- 20 years of service at age 60, or
- 30 years of service at your Minimum Retirement Age
Because of those rules, many people believe their federal annuity benefit will be lost if they don’t meet requirements. In reality, though, you could possibly receive a deferred annuity. You must work at least five years in order to claim the deferred annuity benefit, and payments will begin on the future date at which you could have received an immediate annuity.
Not everyone is eligible for the deferred annuity option, so investigate this issue carefully before making a decision. If you need help exploring your retirement funding options, give us a call. We can help you decipher complicated regulations, anticipate your benefits, decide upon a target separation date, and more.