Getting your FERS pension cut in half is sure to have a huge impact on your lifestyle. But in this episode, Micah is here to tell you that there is a way of not letting this situation come to pass.
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If you have more questions about FERS or SRS (Special Retirement Supplement), leave us a comment below and we’ll try to answer it in a future video.
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How To Avoid Getting Your FERS Pension Cut in HALF
For federal employees who are covered under the Federal Employees Retirement System (FERS), the prospect of having their pension cut in half can be a frightening one. However, there are steps that can be taken to prevent this from happening. Here are some tips on how to avoid getting your FERS pension cut in half.
1. Know and understand the rules: The first step in avoiding a pension cut is to familiarize yourself with the rules and regulations that govern the FERS system. Understanding the factors that could lead to a reduction in your pension can help you take proactive measures to prevent it from happening.
2. Work towards a full career: One of the main factors that can lead to a pension cut is not completing a full career under FERS. In order to be eligible for an unreduced pension, you must have completed at least 30 years of service or be at least 60 years old with 20 years of service. Working towards completing a full career can ensure that you receive the full amount of your pension.
3. Avoid early retirement: Retiring before reaching the minimum retirement age can result in a significant reduction in your pension. For FERS employees, the minimum retirement age ranges from 55 to 57, depending on your year of birth. By waiting until you reach the minimum retirement age, you can avoid a reduction in your pension.
4. Be mindful of part-time work: If you continue to work part-time after reaching your minimum retirement age, it can impact your pension. Your pension will be reduced if you work part-time in a position covered by FERS, even if you have already met the minimum service requirements.
5. Purchase military service credit: FERS employees have the option to purchase military service credit, which can increase their length of service and ultimately their pension benefit. By purchasing military service credit, you can ensure that your pension is not cut in half.
6. Consider making catch-up contributions: FERS employees have the option to make catch-up contributions if they have not reached their annual limit in previous years. By making catch-up contributions, you can increase your retirement savings and ultimately your pension benefit.
7. Seek professional advice: If you are unsure about the best course of action to protect your FERS pension, it may be helpful to seek advice from a financial planner or retirement specialist. They can offer personalized guidance based on your individual circumstances and help you make informed decisions to avoid a pension cut.
In conclusion, protecting your FERS pension from being cut in half requires careful planning and adherence to the rules and regulations governing the system. By familiarizing yourself with the requirements for an unreduced pension and taking proactive measures, you can safeguard your retirement income and enjoy a secure financial future.
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I retired from federal service on 12/30/2022 after about 23 years and 6 months, since I commenced federal service on 06/21/1999..I turned 61 years old on 02/08/2023. Presently, I am collecting $1756.99 per month for a gross amount of $1051 from my FERS annuity plus $855 per month from my FERS annuity supplement. I also collect surving spouse benefits of $1698 per month as a widower from social security since I turned 61 on 02/08/2023, 1 year after I turned age 60. Age 60 is the minimum age to collect surviving spouse benefits from social security as a widower. I have taken no employment to supplement my retirement income, since I do not want to go anywhere near $18, 260 annually regarding my FERS annuity supplement. However, I am considering taking part time employment or employment on a per diem basis for retirement income supplementation after I turn 62 years old on 02/08/2024, since this is when FERS annuity supplement payments will stop. My GEHA standard payment deduction will increase from $149.01 per month in 2023 to $151.99 per month in 2024. Once my FERS annuity supplement stops after turning 62 on 02/08/2024, I will be left with about $1749 monthly surviving spouse widower benefits from social security regarding the 3,2 % cost of living adjustment increase and $890.01 monthly net amount from my FERS pension after my $855 monthly annuity supplement ends, causing a large reduction in pension benefits as single with $1810 per month rent to pay with $20 monthly lease increases each year. Retirement can also be quite stressful to manage when it comes to expenses.
Hello. I started working for the federal government at age 21. My goal is to only work 20 years and then move to the private sector or start my own business. If I leave federal service at 42, will I still be able to get my fers at 60? Does the 20 year gap affect this?
Is the SRS reduced based on just my work earnings in retirement, or based on my wife also?
Good to know, I never knew there was a restriction on the supplement.
That was very clear and concise and has bolstered my understanding of my impending retirement. Thank you.
Ok, this video seems to be for somebody retiring early. I've will have been in Fed employment for 10 years, 3 months when I retire next January. I'm 66 and 10 months at that time. I'll have full Social Security. Does this video pertain to me?
Interesting can you address the earnings tax under S.S. Does the S.S. earnings calculation also include TSP distribution? Thanks
From my understanding those military retirees who are getting a military retirement isn’t eligible for the FERS supplement .. if I’m incorrect someone please let me know.
You can also add with a VERA/VSIP with 25 years, this makes you eligible for an immediate pension.
Video: How to avoid getting your pension cut in half?
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So what happens if you earn a lot more-let’s say 50k-75k then do you lose your entire FERS Supplement?
Micah, you and Tammy have been so helpful. Would you consider a video on how to fill out the Federal retirement application to help avoid any delays in the process? Thanks.
Assuming I retired at the age of 60 at the end of the year with 400 hours of unused annual leave and the year after I receive a check of 26k for leave hours, does the 26k count against the FERS supplement earnings limit?
Thanks for the information. My question. As an air traffic Controler. If I retire at 53 I’m not limited to 18k Rt? I don’t start getting penalized till my MRA 57?