Catch 62 for FERS Employees?
Think there is no Catch 62 for FERS Employees. Not long ago I was skimming over a site with a lot of interesting federal retiree information. I noticed a headline where the author had written something like “Are You Prepared for your Annuity to Drop 40%?”
Immediately I of course figured he was writing about the CSRS Military Service buy back issue and its built-in “Catch” at age 62, where retired employees (In the civil service retirement world we call retirees “annuitants”) can indeed lose 40% (or even more) of their annuity. I’ve written plenty on that issue, you can always start reading about Common Catch 62 Questions here if you want to know more.
But nope, I re-read what I had been skimming over and sure enough, he was talking about an issue affecting FERS retirees. Hmm, though I, hadn’t read about this, best I research more … and was I glad I did.
FERS Flavored Catch 62
If you are a FERS retiree, or a potential FERS retiree, you need to listen up too, because if you are not thinking your retirement through, something could jump up on your 62nd birthday and give you the sort of birthday surprise you really, really don’t want to have.
First of All, This Does Not Affect All FERS Retirees.
To find out if it affects you, you’ll have to read on.
For those of you who retire, under FERS, that is, with a ‘normal immediate retirement’, that is:
- 30 years of creditable service and be at least your Minimum Retirement Age (MRA)
- or 20 years of creditable service and be at least 60 years old.
You will get a special supplement from your retirement until you are age 62 … with the stated purpose of making up for the fact you won’t get Social Security retirement benefits before age 62 … even though Social Security is one of the three major “Pillars” of a FERS retirement.
Note, as with many retirement benefits there are special regulations and eligibility “gates” for “Special Provisions” FERS employees, typically those in ATC, Law Enforcement or Fire Fighters. If you fall into those categories, read more about “Special Provisions Employees” here.
So Suppose You Don’t Decide To Start Social Security at Age 62?
Well, that’s one of the main reasons for writing this article.
For years I have been saying to FERS employees, “Hey, don’t worry, there is no “Catch 62” for FERS”. And, essentially, I wasn’t wrong.
The standard CSRS retiree “Catch 62” provision, where OPM will give “free credit” for military time until the retiree reaches 62, and then take the credit for retired years away, for life, can’t happen under FERS.
It can’t happen, mainly, because you can’t get any “free credit” for military time while retired, below age 62, under FERS.
But What If You Are a FERS and CAN Retiree Before 62?
You really need to aware of the provision for military service credit and military service buy back options even under FERS, because indeed, for folks like Special Provisions Employees, the 62nd birthday can be very important, just as it always had been for your CSRS federal retirement system brethren.
Learn Now or Regret Later
But I really had my eyes opened by this excellent article by retirement planning expert Micah Shilanski from http://www.plan-your-federal-retirement.com/. If you are planning yourself to be a federal retiree someday, as I already am, you really should acquaint yourself with Micah’s site. He has some of the best information I’ve found anywhere.
There’s a LOT more to retiring from the Federal government than just living long enough. And there are many decisions that can be made, even quite early in your career, that can affect your retirement for as long as you live, and even as long as your survivors may live.
So in-between reading websites from crabby old men like me, your busy schedule on FaceBook, and watching the NFL, you should start learning about the huge, complex “organism” that you are a part of .. the Federal Retirement System.
Is there anything which comes to mind right this minute that is actually more important than empowering you own retirement? Frankly, I can’t think of anything … but feel free to leave a comment and tell me if you think I’m wrong. Especially about Catch 62 for FERS Employees.