As a FERS employee there are numerous rules and nuances to understanding when thinking about retirement. First and foremost, you have to understand what type of retirement you are going to qualify for and what type of benefits you will get under that type.
The MRA+10 retirement is a very popular option for those feds that are looking to retire early with most of their benefits still intact.
This guide is meant to help you understand all the relevant details about MRA+10 retirement so that you can make an informed decision for yourself.
Feel free to skip to the relevant parts of the article with the table of contents below.
Table of Contents
–Who is Eligible for a MRA+10 Retirement?
-Benefits That You Do (And Don’t) Get Under MRA+10 Retirement
-Pension Reductions for MRA+10 Retirement
-How to Avoid the MRA+10 Pension Reduction
-How to Calculate Your MRA+10 Retirement Pension
-MRA+10 Retirement Pension Calculation Examples
-Do I Get the FERS Supplement under a MRA+10 Retirement?
-Do I get COLA’s under a MRA+10 Retirement?
-Can I keep my FEHB (health insurance) under a MRA+10 Retirement?
-Can I keep my FEGLI (life insurance) under a MRA+10 Retirement?
What is MRA+10 Retirement?
There are a number of different types of retirement that are available under the FERS system. Some of these include an immediate retirement, an early-out retirement, a deferred retirement, and a MRA+10 retirement.
Each type of retirement has their own eligibility criteria as well as benefits for those that are eligible.
This guide is just going to be about the MRA+10 retirement (and a little about postponed retirement) but you can find more info about the other types of retirement at the following links.
-Deferred Retirement and Postponed Retirement (There’s a big difference!)
Who is Eligible for a MRA+10 Retirement?
There are two main criteria to be eligible for a MRA+10 retirement.
You have to have met your MRA (minimum retirement age) and you have to have at least 10 years of creditable service.
Note: At least 5 years of your creditable service has to be civilian service time and not military service that you bought back.
Your MRA is based on your birth year per this chart.
If you have met your MRA and have at least 10 years of creditable service then you are eligible for a MRA+10 retirement! The next important thing to understand is what benefits you get (and don’t get) under this type of retirement.
Benefits That You Do (And Don’t) Get Under MRA+10 Retirement
Let’s start with the benefits that you do get under this retirement.
Benefits you get:
An Immediate Pension (assuming you don’t postpone it).
FEHB Health Insurance (See the Q+A at the bottom of this article for more information on this).
FEGLI Life Insurance (See the Q+A at the bottom of this article for more information on this).
Benefits you DON’T get:
A Full Pension (your pension will be reduced)
The FERS Supplement (Here is more information about the FERS Supplement).
Pension Reductions for MRA+10 Retirement
The main benefit of a MRA+10 retirement is the fact that you can get a pension right away but the main downside is that your pension will be reduced depending on your age and years of service.
This is how the reduction works.
Basically, your pension will be reduced by 5% for every year (or 5/12 of a % for every month) that you retire before age 62.
For example, if you retired at 57 with only 20 years of service then your pension would be reduced by 25% because you retired 5 years before age 62.
This reduction is one of the main reasons that people shy away from this type of retirement. For some, it will still be worth being able to retire early even with the reduction but for others it won’t be.
I’ll run through some example calculations below to show what this might look like in numbers.
How to Avoid the MRA+10 Pension Reduction
There is only one way to avoid the MRA+10 pension reduction and it is by using a postponed retirement. But we want to make sure we don’t confuse a postponed retirement with a deferred retirement because there are some major differences which you can learn about here if interested.
Postponed Retirement
In a nutshell, a postponed retirement is when you delay your MRA+10 pension until a later time or order to avoid the pension reduction if you took your pension right away.
If you have at least 20 years of service then you would have to postpone your pension until age 60 to completely avoid a reduction. If you have less than 20 years of service then you would have to postpone your pension until 62 to completely avoid a reduction.
For example, if you retire at 57 and with 22 years of service then you could delay your pension for 3 years and start it at age 60 without any reductions.
If you have 19 years of service and retire at 57 then you could restart your pension at age 62 to avoid the reductions.
But Just Make Sure…
One major thing to note about a postponed retirement is that you will not be covered under your FEHB health insurance or FEGLI life insurance during that time that you are not receiving a pension.
You will want to make sure you have a plan to get the coverage you need during the gap years if you are considering a postponed retirement.
But (assuming you meet all the eligibility requirements) you are able to start back up your FEHB health insurance and FEGLI life insurance when you start your pension back up at 60 or 62.
How to Calculate Your MRA+10 Retirement Pension
The first step to calculating the pension for a MRA+10 retirement is the same as other types as well.
You take your creditable years of service and multiply it by your high-3 (average annual salary for the 3 years of your career you got paid the most) and your multiplier which would be 1% for this type of retirement.
Once you find your gross annual pension with the above formula then you have to think about the reduction for taking the MRA+10 retirement as I’ll show in the examples below.
MRA+10 Retirement Pension Calculation Example
For this example let’s assume that you retire at age 57 with 20 years of service and a high-3 of $100,000.
Your gross annual pension would be calculated as follows:
$100,000 X 20 X 1% = $20,000
But like we stated above, you have to now take into account the reduction for retiring under MRA+10 retirement. Because you have 20 years of service and retired at 57 then you’ll see a 25% reduction for retiring 5 years before age 62.
This reduction would look like this:
$20,000 X 75% = $15,000
But as I stated above in the section on postponed retirement, you would be able to avoid these reductions if you do choose to postpone your pension.
Common Questions
Do I Get the FERS Supplement under a MRA+10 Retirement?
Nope, unfortunately you don’t. You would have to have at least 30 years at your MRA or 20 years at 60 to qualify for the FERS Supplement. You can find more information on the FERS Supplement here.
Do I get COLA’s under a MRA+10 Retirement?
Under FERS, you are eligible for COLA’s or cost of living adjustments but they won’t start until you turn 62.
Can I keep my FEHB (health insurance) under a MRA+10 Retirement?
There is nothing about a MRA+10 retirement that would stop you from keeping FEHB in retirement but there are some requirements to keep FEHB into retirement regardless of which type of retirement you pick.
The two main requirements are:
Be covered under FEHB for the 5 years before retirement
Retire with an immediate retirement (MRA+10 is considered a type of immediate retirement).
Can I keep my FEGLI (life insurance) under a MRA+10 Retirement?
There is nothing about a MRA+10 retirement that would stop you from keeping FEGLI in retirement but there are some requirements to keep FEGLI into retirement regardless of which type of retirement you pick.
The two main requirements are:
Be covered under FEGLI for the 5 years before retirement
Retire with an immediate retirement (MRA+10 is considered a type of immediate retirement).
