If you retire before 62 under FERS, the FERS Supplement can be a big part of your early retirement income. But it doesn’t last forever. It stops at the end of the month you turn 62, and at that point you face one of the biggest decisions in retirement: start Social Security right away, or wait for a bigger check?
In my work as a financial planner for federal employees, this is one of the questions I hear most. There’s no single right answer, but there is a right way to think about it.
Two separate decisions
Many feds assume the Supplement and Social Security are tied together. They aren’t. The Supplement is part of your FERS annuity, and it’s meant to approximate the Social Security you earned during your federal career. It ends at 62 no matter what you do with Social Security.
When you claim Social Security is a completely separate choice. You can start it at 62, at your full retirement age, at 70, or any month in between.
How claiming age changes your check
For anyone born in 1960 or later, full retirement age is 67. Claiming at 67 gets you 100% of your benefit. Claim earlier and you get less. Wait longer and you get more:
- At 62: about 70% of your full benefit
- At 67: 100%
- At 70: about 124%
Say your full-retirement-age benefit is $3,200 a month. At 62, that’s about $2,240. At 70, it’s about $3,970. Waiting from 62 to 70 pays roughly 77% more per month. The catch is that you go eight years without a check. If you compare claiming at 70 with claiming at 62, the break-even is roughly age 80.
Reasons to claim at 62
- No income gap. Social Security can replace the Supplement right away, so your income doesn’t drop and your TSP doesn’t have to pick up the slack.
- Health. If your health or family history suggests a shorter life expectancy, waiting may never pay off.
- You’re the lower earner. When one spouse dies, the survivor keeps the larger of the two benefits and the smaller one goes away. If yours is the smaller benefit, there’s less reason to delay it.
- You want to use it. Your early retirement years are usually your healthiest and most active. Money is often most valuable then.
Reasons to wait
- You’re the higher earner. Delaying locks in a bigger check for your life and for your spouse’s, if they outlive you. That matters even more if your spouse is younger.
- You have a healthy TSP. You can take a little more from the TSP between 62 and 70 and, in effect, buy a bigger, inflation-adjusted Social Security check for life.
- A Roth conversion window. Years with lower income can be a good time to convert some traditional TSP or IRA money to Roth at lower tax rates.
- Longevity. If you expect to live a long time, the bigger check usually wins. There’s no benefit to waiting past 70.
Two traps to watch
The earnings test. If you claim before full retirement age and keep working, Social Security withholds $1 for every $2 you earn over $24,480 in 2026. It counts wages and self-employment income, not your pension or TSP withdrawals. The money isn’t lost; your benefit is recalculated upward at full retirement age. But if you’re still earning a solid paycheck, claiming early often doesn’t make sense.
Taxes. Up to 85% of your Social Security can be taxable, depending on your total income. With a FERS pension and TSP withdrawals, many retired feds end up at or near that 85% maximum. The number on your Social Security statement isn’t what you’ll actually keep.
Final thoughts
Some people online will tell you to always claim at 62. Others will tell you to always wait until 70. Both are wrong as a rule. The right answer depends on your health, your marriage, your savings and what you want your retirement to look like. This is one decision you can’t undo, so run the numbers for your household before you file.
If you’re a federal employee within 5 years of retirement and want a plan built around your FERS benefits, book a free call to see if we’re a fit.
Dallen Haws, CFP®, is the founder of Haws Federal Advisors, which helps federal employees plan their retirement. This article is educational only and is not tax, investment or legal advice. HawsFederalAdvisors.com