FERS Retirees Are Eligible to Collect Social Security and a Supplement if They Retire Early.
FERS employees who retire After their Minimum Retirement Age (MRA) with 30 years of service will receive a Special Retirement Supplement which is paid as an annuity until you reach age 62 and become eligible for Social Security.
To become eligible for benefits, you and your family must meet different sets of requirements for each type of benefit. An underlying condition of payment of most benefits is that you have paid Social Security taxes for the required period of time.
The amount of monthly benefits you receive is based on three fundamental factors:
Benefits are subject to individual and family maximums.
If you meet certain requirements, you will receive a Special Retirement Supplement which is paid as an annuity until you reach age 62. This supplement is somewhat similar to the Social Security benefit earned while you were employed by the Federal government. However, since the formula for the Special Supplement assumes a working life of 40 years, each year of FERS service is worth one-fortieth of the estimated Social Security benefit. Therefore, the FERS Supplement is often significantly less than your Social Security benefits. The supplement ends at age 62 even if you elect to wait to apply for Social Security benefits.
You may be eligible for a Special Retirement Supplement if you retire:
If you transfer to the Federal Employees Retirement System (FERS) from the Civil Service Retirement System (CSRS), you must have at least one full calendar year of FERS-covered service to qualify for the supplement.
Earnings from wages or self-employment that exceed the Social Security annual exempt amount ($17,040/year in 2018), your Special Retirement Supplement will be reduced or stopped.
If you have active military time, and are eligible to collect Social Security at age 62, your annuity will decrease unless you buy back your military time.
If you retire with a FERS supplement and go back to work in retirement your supplement is subject to the same Social Security earnings rules. Basically, if you are receiving a supplement and earn more than $17,040 a year in 2018 you would have to give back $1 for every $2 you earn over this limit. CSRS employees that worked 40 quarters or more in the private sector and collect Social Security at age 62 are also subject to these same income limitations until they reach full retirement age, currently age 66.
To estimate your Social Security Supplement use Decision Support Software's Personl Version CSRS and FERS Retirement Software. The software includes an easy-to-use supplement calculator and integrates the supplement into your overall federal retirement analysis. They offer a desktop or online version.