FERS Early Retirement Calculator
Early retirement under the Federal Employees Retirement System (FERS) can significantly impact your lifetime income. If you are considering leaving federal service before age 62, it’s essential to understand eligibility rules, reduction penalties, and how much your annuity may decrease.
Our FERS Early Retirement Calculator helps you:
- ✅ Check early retirement eligibility
- ✅ Estimate unreduced annual pension
- ✅ Calculate reduction percentage
- ✅ See reduced annual benefit
- ✅ View projected monthly income
This tool is especially helpful for federal employees evaluating MRA+10 retirement or Discontinued Service Retirement (DSR) options.
What Is Early Retirement Under FERS?
FERS allows certain employees to retire before reaching full retirement eligibility. However, early retirement often comes with a permanent reduction in benefits, depending on the retirement type.
There are two primary early retirement categories covered in this calculator:
- Voluntary Early Retirement (MRA+10)
- Discontinued Service Retirement (DSR)
These options differ in eligibility rules and benefit reductions.
1️⃣ Voluntary Early Retirement (MRA+10)
Under MRA+10 rules, you can retire if:
- You have reached your Minimum Retirement Age (MRA)
- You have at least 10 years of creditable service
For most federal employees, the MRA is between 55 and 57, depending on birth year.
The Major Catch: Permanent Reduction
If you retire under MRA+10 before age 62, your pension is reduced by:
5% per year (or 5/12 of 1% per month) under age 62
This reduction is permanent.
Example:
If you retire at 57 (5 years before 62):
5 years × 5% = 25% permanent reduction
That is a significant lifetime impact.
2️⃣ Discontinued Service Retirement (DSR)
Discontinued Service Retirement applies if you are separated involuntarily (e.g., RIF).
You may qualify if:
- You have 25 years of service at any age
OR - You are age 50 with at least 20 years of service
The key advantage:
✔ No early age reduction penalty
This makes DSR significantly more favorable than MRA+10.
How the FERS Early Retirement Formula Works
The base annuity formula remains:
High-3 Salary × Years of Service × Multiplier
Multiplier:
- 1% standard
- 1.1% if age 62+ with 20+ years
After calculating the unreduced pension, any applicable early retirement reduction is applied.
How to Use the FERS Early Retirement Calculator
Using the calculator is simple and fast.
Step 1: Enter High-3 Average Salary
Input your highest-paid consecutive three-year average.
Example:
$95,000
Step 2: Enter Years of Service
Add your total creditable federal service.
Example:
22 years
Step 3: Enter Current Age
Input your age at retirement.
Example:
57
Step 4: Select Retirement Type
Choose:
- Voluntary Early (MRA+10)
- Discontinued Service Special
Step 5: Click “Calculate”
The calculator displays:
- Eligibility status
- Reduction percentage
- Annual benefit (unreduced)
- Annual benefit (reduced)
- Monthly benefit
You can reset and test multiple scenarios to compare outcomes.
Example Calculations
Example 1: MRA+10 at Age 57
- High-3 Salary: $90,000
- Service Years: 20
- Age: 57
- Retirement Type: Voluntary Early
Step 1: Unreduced Benefit
90,000 × 20 × 0.01 = $18,000
Step 2: Reduction
5 years under 62
5 × 5% = 25% reduction
Step 3: Reduced Annual Benefit
18,000 × 0.75 = $13,500
Monthly Benefit:
$1,125
That’s a $4,500 annual loss for life.
Example 2: Discontinued Service Retirement
- High-3 Salary: $90,000
- Service Years: 25
- Age: 50
- Retirement Type: Discontinued Service
Unreduced Benefit:
90,000 × 25 × 0.01 = $22,500
Reduction: 0%
Monthly Benefit:
$1,875
No penalty applies under DSR.
Key Differences: MRA+10 vs DSR
| Feature | MRA+10 | DSR |
|---|---|---|
| Minimum Service | 10 years | 20 or 25 years |
| Age Requirement | MRA | 50 or any age (25 yrs) |
| Reduction Penalty | Yes | No |
| Best For | Voluntary early retirement | Involuntary separation |
Understanding which category applies to you is critical before making a decision.
Important Considerations Before Early Retirement
1️⃣ Permanent Reduction
MRA+10 reductions never go away.
2️⃣ Survivor Benefits
Choosing a survivor annuity further reduces your payment.
3️⃣ COLA Eligibility
FERS retirees generally do not receive COLA until age 62 (except special groups).
4️⃣ Social Security Timing
Early retirement may impact when you claim Social Security.
5️⃣ TSP Planning
You may rely more heavily on your Thrift Savings Plan if your pension is reduced.
Why Use This FERS Early Retirement Calculator?
✔ Automatically calculates reduction percentage
✔ Shows both unreduced and reduced benefits
✔ Checks eligibility instantly
✔ Helps compare retirement types
✔ Free and easy to use
It allows you to make informed financial decisions before leaving federal service.
Who Should Use This Tool?
- Federal employees considering early retirement
- Employees facing possible RIF
- HR advisors
- Federal retirement planners
- Employees nearing Minimum Retirement Age
Even a small age difference can significantly affect your pension.
15 Frequently Asked Questions (FAQs)
1. What is MRA under FERS?
Minimum Retirement Age, usually between 55 and 57.
2. What is the MRA+10 penalty?
5% per year under age 62.
3. Is the reduction permanent?
Yes, it lasts for life.
4. Can I avoid the reduction?
Only by postponing your annuity start date.
5. What qualifies for Discontinued Service Retirement?
25 years at any age or age 50 with 20 years after involuntary separation.
6. Does DSR have a penalty?
No, it does not.
7. What is the FERS multiplier?
1%, or 1.1% at age 62+ with 20+ years.
8. Does this include Social Security?
No, it estimates only the FERS Basic Benefit.
9. Does this include TSP income?
No, TSP is separate.
10. Is COLA included?
Not automatically before age 62 in most cases.
11. Can I test multiple scenarios?
Yes, simply reset and enter new values.
12. What if I retire at 60 with 20 years?
No MRA+10 reduction if eligible for immediate retirement.
13. Is this calculator official?
It follows official formulas but is for estimation only.
14. Is early retirement worth it?
It depends on your financial situation and long-term goals.
15. Should I consult HR?
Yes, always confirm final eligibility and calculations with your agency.
Final Thoughts
Early retirement under FERS can provide flexibility — but it may come at a cost. Understanding eligibility rules, reduction penalties, and lifetime income impact is essential before making a decision.
This FERS Early Retirement Calculator gives you a clear picture of:
- Your eligibility
- Your unreduced pension
- Your reduction penalty
- Your true monthly retirement income
Use the calculator today to explore your options and plan your federal retirement wisely.