VERA and the FERS Supplement: What You Need to Know

For federal employees considering early retirement under the Voluntary Early Retirement Authority (VERA), one of the most common questions is: Am I eligible for the FERS Supplement? The answer is yes—but with important conditions. In this post, we’ll break down how the FERS Supplement works if you retire early under VERA, when you can expect to receive it, and what to watch out for.

What Is VERA?

The Voluntary Early Retirement Authority (VERA) allows federal agencies undergoing restructuring, downsizing, or workforce reshaping to offer early retirement to eligible employees. It’s a tool used to encourage voluntary separation by lowering the standard age and service requirements.
Under VERA, you can retire as early as age 50 with 20 years of creditable service, or at any age with 25 years of service.

What Is the FERS Supplement?

The FERS Annuity Supplement—often just called the “FERS Supplement“—is a benefit designed to bridge the gap between when you retire under FERS and when you’re first eligible for Social Security at age 62. It approximates what you would receive from Social Security if you could claim it before age 62 and is paid in addition to your basic FERS annuity.

Are VERA Retirees Eligible for the Supplement?

Yes, FERS retirees under VERA are eligible for the FERS Supplement, but only once they reach their Minimum Retirement Age (MRA). Your MRA depends on your year of birth and ranges between 55 and 57.
So, if you retire under VERA at age 52 and your MRA is 57, you won’t start receiving the supplement until you turn 57. You will then receive it from MRA until age 62, assuming you meet all other eligibility requirements.

Key Requirements to Receive the Supplement
To qualify for the FERS Supplement under VERA, you must:

• Have completed at least one full year of FERS-covered service.
• Retire under an immediate retirement, which VERA provides.
• Reach your Minimum Retirement Age (MRA) before the benefit begins.
  If you do not reach your MRA at the time of retirement, the supplement will be deferred until you do.

Important Considerations

1. Earnings Test Applies
Like Social Security, the FERS Supplement is subject to an earnings test. If you earn more than the exempt amount from wages or self-employment (not including pensions, TSP withdrawals, or investment income), your supplement may be reduced or eliminated.

2. No COLAs
Cost-of-living adjustments (COLAs) are not applied to the supplement.

3. Ends at Age 62
The FERS Supplement automatically stops at age 62, regardless of whether you begin collecting Social Security.

Example Scenario
Let’s say Lisa retires under VERA at age 50 with 25 years of service. Her MRA is 56. Here’s what her timeline looks like:

• Age 50 to 56: She receives only her basic FERS annuity.
• Age 56 to 62: She receives her basic annuity plus the FERS Supplement.
• After 62: The supplement ends. If she qualifies, she may apply for Social Security benefits.

Final Thoughts

The FERS Supplement can be a valuable income bridge for early retirees, but understanding the timing and limitations is key. If you’re considering VERA, be sure to plan around your MRA and know when you can expect to receive the supplement.

At Create Your Path, we specialize in helping federal employees make informed retirement decisions. If you’re navigating VERA or wondering how early retirement will affect your benefits, let’s talk.

Need help running the numbers or mapping out your early retirement income? Schedule a free consultation and let’s create a clear strategy together.

---

Get Tips On Maximizing Your Federal Employee Benefits!

Start on your path to financial freedom by getting our monthly articles full of tips on maximizing your benefits and the occasional freebie.

Privacy Policy: We do not sell or share your information with anyone.

---