Q. I retired from the Navy last year (I have 20 years in) and am receiving my pension. I took a GS-12 job and am under FERS. I’ll be 39 in a few weeks. If I wanted to retire at age 57, what would be my monthly payout? For how long? I understand that there is a three-tier system using the Thrift Savings Plan and Social Security. Am I allowed to draw on those at age 57, or do I have to wait until age 62?
Mike Miles: You may begin drawing from your TSP account immediately and without penalty after you retire at age 57.
Reg Jones: You could retire at age 57 under the MRA+10 provision (minimum retirement age with at least 10 but fewer than 30 years of service). Your annuity would be computed as follows: 0.01 x your highest three consecutive years of average salary x your years and full months of actual FERS service. However, your annuity would be reduced by 5 percent for every year (5/12 percent per month) that you were under age 62. You could reduce or eliminate that penalty by postponing the receipt of your annuity to a later date.
Alternatively, you could make a deposit to the civilian retirement system for your years of active-duty service and get credit for that time. Then, instead of the 18 years used in your annuity computation, you’d have 38.
And there wouldn’t be any age reduction. Of course, there’s a downside to doing that. You’d have to waive your military retired pay when you retire from your civilian job. Whether that makes sense financially is a decision you’ll have to make after running the numbers.
