Government agencies may offer eligible employees early retirement options under Voluntary Early Retirement Authority (VERA) as part of efforts to downsize or restructure their workforce.
Effect on Your FERS Annuity
The FERS annuity begins on the first day of the month following retirement. Your FERS Basic Annuity is calculated based on the highest three consecutive years of salary, combined with your total years and months of creditable service. Unused sick leave can also be credited toward your service.
If you retire early under FERS, before age 55, there is no reduction to your annuity. Employees with at least one year of FERS service can receive the FERS Annuity Supplement once they reach their Minimum Retirement Age (MRA), which varies between 55 and 57 based on your birthdate. The supplement continues until you become eligible for Social Security at age 62, though it is subject to an earnings limitation.
Effects of Early Retirement on Benefits
Employees retiring under VERA or Voluntary Separation Incentive Payment (VSIP) must meet specific health benefits eligibility criteria to continue coverage after retirement. To keep Federal Employees Health Benefits (FEHB), employees must have been enrolled in FEHB for at least the last five years of their federal service, or continuously since first becoming eligible, unless an exception applies.
Employees may also continue Federal Employees Group Life Insurance (FEGLI) after retirement if they have maintained coverage for at least five years prior to retiring. The value and cost of FEGLI depend on the employee’s election made at the time of retirement.
Post-Retirement Employment
Retiring early under VERA does not restrict you from taking non-federal employment, though if you are receiving the FERS annuity supplement, it may be reduced or stopped if you exceed the earnings cap.
If you return to work for the federal government after retirement, you are considered a reemployed annuitant. In this case, your annuity continues, but your salary will be reduced by the amount of your annuity, unless OPM grants a waiver. After working full-time for at least one year, you may apply for a supplemental annuity. If you work full-time for five years, you can choose either a supplemental annuity or a recomputed annuity based on your new federal service.
For personalized guidance on your federal benefits, consult a Federal Retirement Consultant® to ensure you’re fully prepared for your retirement future.
