Federal Employee's Is Early Retirement an Option for You?

Is Early Retirement an Option for You? Here’s What You Need to Know

Published: May 13, 2025 | Expect: Danny Favreau

Early retirement sounds like a dream for many federal employees—more time, less stress, and the freedom to start a new chapter. Whether that means traveling, launching a new career, or just enjoying life at a slower pace, the idea is tempting. But before you start packing up your office, it’s important to understand the rules.

You Can’t Just Choose Early Retirement—It Has to Be Offered

Early retirement is typically only available when a federal agency is downsizing or restructuring. It’s not something you can apply for unless your agency extends the offer. While these offers were more common years ago, they still happen occasionally—so it’s smart to be informed just in case.

Do You Qualify?

To be eligible for early retirement through a Voluntary Early Retirement Authority (VERA), you must meet one of the following requirements:

• Be at least age 50 with 20 years of service, or
• Have 25 years of service at any age

If you’re enrolled in Federal Employees Health Benefits (FEHB) and/or Federal Employees’ Group Life Insurance (FEGLI), you can carry those into retirement—as long as you’ve been covered for the five years leading up to your retirement date.

Exception: The five-year rule may be waived if you’re affected by a reduction-in-force (RIF) notice.

The FERS Advantage

If you’re covered under FERS (Federal Employees Retirement System) and you take early retirement, you’re in a better position than your CSRS (Civil Service Retirement System) counterparts. Why? You may qualify for the Special Retirement Supplement (SRS)—a unique benefit that provides an additional payment approximating what you would get from Social Security.

There’s one catch: The SRS doesn’t start until you reach your minimum retirement age (MRA), and it ends at age 62, when you become eligible to claim Social Security.

Downsides to Keep in Mind

1. No Cost-of-Living Adjustments (COLAs)
   If you retire early under FERS, you won’t receive annual COLAs on your pension until you hit age 62.
2. The SRS Is Temporary
   The SRS disappears once you’re eligible for Social Security. It’s a bridge, not a permanent supplement.

What About CSRS Employees?

If you’re one of the remaining federal employees under CSRS, early retirement comes with a penalty: a 2% reduction in your annuity for each year you're under age 55. That’s a big difference compared to FERS employees, who can retire early with no age-based penalty.

Note: If you were hired after 1983, you’re automatically in FERS.

Final Thoughts

Early retirement can be a great opportunity—but only if you understand the trade-offs. If your agency offers it and you qualify, it’s worth considering. Just make sure you weigh the pros and cons carefully. Talk to a retirement specialist and consider how it fits into your long-term goals.

Need help evaluating your options? Schedule a free retirement review—our team specializes in helping federal employees make confident, informed decisions.

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