Contemplating extending your working years beyond your Minimum Retirement Age (MRA)? Delving into the FERS 10% Bonus available at age 62 could offer valuable insights. Here’s what you need to know:
Unlocking the FERS 10% Bonus at Age 62
Picture this: You’re eligible for an immediate pension at 60, boasting 20 years of service. Upon retirement, your FERS annuity is calculated using the standard 1% formula. Fast forward two years to age 62, and your annuity undergoes recalibration with the 1.1% formula. The result? A significant 10% boost to your FERS pension, enduring for the duration of your retirement.
Additional Perks of Retiring at Age 62
Extending your tenure offers a multitude of advantages:
- Accumulating more years of creditable service translates to a higher pension.
- Wage increases during extended service further elevate your High-3 salary, amplifying your pension.
- Continued full-salary employment facilitates additional contributions to your Thrift Savings Plan (TSP), augmented by Catch-Up Contributions and agency matches.
- Accumulation of Unused Sick Leave and Annual Leave during extended service enhances your pension and results in a larger lump-sum payment upon separation from service.
- Notably, age 62 marks the advent of Cost Of Living Adjustments (COLAs) for FERS retirees, augmenting financial security in retirement.
A Heftier Retirement Fund for Prolonged Retirement
As per the Social Security Administration, one in four individuals reaching age 65 today will live to 90. Considering the prospect of an extended retirement, ensuring financial adequacy becomes paramount. By extending employment beyond MRA, you cultivate a larger annuity and bolster your TSP nest egg, fortifying your financial position for the long haul.
Consulting with an FRC® trained advisor well-versed in federal benefits empowers you to navigate the intricacies of the FERS 10% Bonus. Together, you can assess its impact on your retirement outlook, safeguarding against financial uncertainties in your golden years.
