Federal employees covered under the FERS retirement system are offered a unique retirement option, the MRA+10. The MRA+10 option allows you to retire at your minimum retirement age (MRA) with as few as 10 years of service. Hence, if you want to retire but aren’t eligible for an immediate unreduced retirement under the standard age and years of service requirements, the MRA+10 gives you an additional option. Although this provision gives you more optionality in entering retirement, it’s crucial that you thoroughly understand the MRA+10, as it carries some distinct features.
KEY FACTS
- MRA + 10 eligibility requirements include coverage under FERS, minimum civilian service requirement, minimum retirement age (MRA), and a minimum of 10-years of service requirement.
- MRA + 10 includes a permanent pension reduction of 5% for every year the retiree is under age 62.
- The reduction can be avoided by postponing receipt of the pension until the retiree has 20 years of service and has reached age 60, or until the retiree has reached age 62.
- MRA + 10 retirees are not eligible for the Special Retirement Supplement.
Eligibility
To be eligible for the MRA+10, you must be a FERS employee, have reached your minimum retirement age (MRA), and have at least 10 years of service but fewer than 30.
Years of Service: Your years of service may include a combination of your FERS years and your military service years for which you have made deposits (bought back). However, you must have at least five years of creditable civilian service.
What is the MRA
Your minimum retirement age (MRA) is the earliest age at which you may retire with 10 to 29 years of service and receive an immediate reduced pension or an unreduced pension after 30 years of service. The MRA ranges between ages 55 and 57 and is based on your birth year.
You can find your MRA by checking the table below:
Reduction
If you thought that retiring with only 10 years of service was too good to be true, you were partially right; there is a catch. If you retire at your MRA with at least 10 years of service but less than 30, your pension will be permanently reduced by 5 percent a year for each year under age 62 or 5/12ths of 1 percent per month.
To avoid the reduction, you can postpone the receipt of your pension until you have 20 years of service and have reached age 60 or until you are age 62.
No Supplement
No matter when you begin receiving your pension, you won’t be eligible for the Special Retirement Supplement (SRS). The SRS or FERS Supplement is a pension supplement for FERS retirees under age 62. Because Social Security is a major component of the FERS retirement, the Supplement is designed to bridge the gap between when you retire and when you become eligible for Social Security (age 62). However, the Supplement is not available to those who retire under the MRA+10 option. To learn more about the FERS supplement, read this article.
Final Thoughts
As a Federal employee, you have a distinct pension benefit that allows you some optionality in achieving your retirement goals. However, as with most things in financial planning, there is no one size fits all approach, and the right option depends on your situation and life goals. Therefore, you should thoroughly understand each available option to make the best decision for you and your family. If you don’t feel confident creating your financial plan or want a professional opinion, you should consult with a qualified financial planner.
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2023 Legislative Change Notice
The SECURE ACT 2.0 passed and impacted many of the articles on this website. While the articles were correct when written, it’s impossible to re-write every article. Please consult a qualified professional (i.e., CFP®, CPA, or attorney) before implementing any strategy.
