Question
At age 60 would I have to take out a TSP annuity to get the “annuity supplement”?
Answer
Great question. I believe the question stems from a confusion in the words we are using for the different benefits. The FERS pension that many FERS get is the monthly retirement check that you receive once you retire. This benefit is often called an “annuity”. The annuity supplement (aka FERS Supplement) is a supplement to your FERS pension.
A TSP annuity is not connected at all to your FERS pension or FERS Supplement. As long as you have at least 20 years of service at age 60 then you are eligible to receive the FERS supplement for 2 years when you retire at age 60.
A TSP annuity is when you give your money over to MetLife (insurance company) and they guarantee you a certain monthly benefit. In my experience the TSP annuity is not the best option for the vast majority of FERS.
Question
Love your channel. Thank you so much for making the videos and sharing your expertise. I am a 62 year old nurse and a first time federal employee working in the VA health system. Prior to this I worked all of my life in the private sector.
What will I be eligible for at full retirement age 66 and 8 months? i.e. FERS and medical benefits.
Answer
As long as you have at least 5 years of creditable FERS service then you are eligible to an immediate retirement at age 62 or later. This means that you are eligible for a pension as well as to keep your health insurance (FEHB) assuming you meet the other eligibility rules.
Age 66 and 8 months is your full retirement age for Social Security benefits and that age has no direct effect on your FERS benefits.
Question
I am covered by traditional FERS. I will have approximately 19 years and 6 months of service when I reach age 62. If I have more than 6 months of sick leave accrued at the time I reach age 62 can I retire and use my sick leave to qualify for the 1.1% calculation in my FERS annuity if I retire at 62.
Answer
Good news! The answer is yes. If you have at least 20 years of service (counting sick leave) at age 62 then you are eligible for the 1.1% calculation.
This gets confusing because sick leave can’t be used to be eligible for an immediate retirement but at age 62 you only need 5 years of service to be eligible for retirement. I repeat, sick leave can be used to qualify for the 1.1% multiplier.
