Home Finance Postponed and Deferred FERS Retirement: Know the Difference

Postponed and Deferred FERS Retirement: Know the Difference

106
0

Going to the office each day may feel the same no matter where your work. But if you work as a federal employee, there are some big differences in your working lives compared to others. The retirement system is one of the important things that differentiate an individual’s career. After all, Federal Employee Retirement System or FERS is the best benefit desired for federal workers. But it comes with complex rules.

If you don’t understand these rules, you will likely make many mistakes that will prevent you maximize your retirement benefits. If we talk about the most important rule that you need to include in your federal employee retirement planning checklist know about early retirement.

There are mainly two types of federal retirement systems: postponed retirement and deferred retirement. These retirement systems are often confused with one another. All these methods have their own set of rules. So, you should be clear about them.

FERS Postponed Retirement 

If you want to retire through a postponed retirement system, you need to consider curtained guidelines:

  • You should have spent ten years of credible service in a position that comes under FERS.
  • You should be at your MRA or minimum retirement age before leaving your position.
  • Make sure you have made all your contributions to the FERS system.

If you meet all these three requirements, you become eligible to retire before age 62. You can also receive your pension immediately. Your benefits will be decreased by a certain percentage every year if you do so. Further, retiring through a postponed retirement system allows you to maximize your pension. Call a federal consultant to learn more about this retirement system. They will also help you calculate your benefits with the federal retirement calculator.

FERS Deferred Retirement

You should include the FERS Deferred Retirement system in your federal employee retirement planning checklist if you want to take early retirement. While the words ‘postpone’ and ‘defer’ look synonymous, they don’t carry the same meaning for FERS retirement. After all, you want to retire through this system; you will need to be eligible for:

  • Five years of credible service for the federal government
  • Make sure you have made all your contribution to the FERS.

Here, the big difference you need to know is that you can retire from your federal career at any age. You are not entitled to meet your MRA. Apart from this, there is a drawback. You can’t reinstate FEHB while applying for a pension. So, it is good to call a federal consultant to help you decide the right retirement system. They will also help you calculate your benefits with the federal retirement calculator. That’s all.