What Happens to My Retirement If I Resign?

Are you wondering about the effect of your retirement savings if you resign now? There are three retirement scenarios that you could possibly be looking at. Let’s look at what benefits you are eligible to qualify for if you turn in your resignation letter at various levels and ages of service.

If You Resign Before Reaching Your Minimum Retirement Age

Let’s assume you are not disabled, eligible for discontinued service retirement, or being approved for discharge under VERA, it all comes down to the amount of years you have been employed for when you resigned:
• If you have been employes for less than 5 years of creditable civilian federal service, you aren’t eligible for retirement benefits. You can seek a refund of all your contributions to the Federal Employees Retirement System.
• For those with more than 5 years of service, you are eligible for deferred retirement benefits. However, you will not have access to any FERS supplement, credit for unused sick leaves while computing retirement benefits, or an entitlement for the reinstation of insurance benefits.
• Those who have served for 5 – 10 years can retire early at 62. The benefits can be computed using the formula 1% x average salary of most earning 3 years x years & months of services.
• Those who have served for 10 – 20 years qualify for reduced retirement benefits at the minimum retirement age. Benefits are decreased by 5% for each year you are below 62.
• The rule mentioned directly above is also applicable to those who have served for 20 – 30 years. Former employees can apply for unreduced benefits at age 60 but should possess at least twenty years of creditable services and 5 years of civilian service.
• Those who have been employed for at least 30 years can receive unreduced retirement benefits at MRA.

What if I am eligible to retire at the time I leave federal service?

FERS allows for optional, unreduced, immediate retirement, provided you’ve reached your MRA and have at least 30 years of civilian service under your belt or have reached the age of 60 with at least 20 years of service, or the age of 62 with at least 5 years of service. Once you’ve met the service and age requirements, you can apply for retirement at any time. You’ll also be eligible to obtain FERS supplement if you are younger than 62.

What if I stay until I’m 62 or older with at least 20 years of service?

FERS retirement benefits will be calculated as 1.1% x your high-three average salary x years and months of service (including credit for unused sick leave), resulting in 10% higher benefits. If you are 62 years or older at the time of retirement, FERS supplements are not payable. But Social Security benefits can be accessed by the age of 62, which makes up for it.

Those who are covered under the CSR System are eligible for immediate unreduced retirement upon reaching 55 if they have at least 30 years of service under their belt; or at age 60 if they have at least 20 years of service; or at age 62 if they have at least 5 years of service under their belt. Deferred retirement benefits are payable at age 62.