What happens to my FERS supplement when I turn 62?

For eligible federal employees retiring early, the FERS supplement provides a vital financial bridge to Social Security eligibility. Understanding what happens to my FERS supplement when I turn 62 is a crucial step in planning for a smooth transition in your retirement income.

Quick Summary

The FERS supplement, a monthly benefit for federal retirees, stops automatically at age 62, regardless of when you begin claiming Social Security.

Key Points

• Automatic Termination: Your FERS supplement will automatically stop at the end of the month before you turn 62, regardless of your Social Security claiming plans.

• Not Tied to Social Security Claim: You are not required to begin collecting Social Security benefits when your FERS supplement ends, and delaying your Social Security will not extend your supplement.

• Income Gap: If you delay claiming Social Security past age 62, you will experience an income gap that must be covered by other savings, like your TSP.

• Earnings Test: If you continue working after retiring and before age 62, your FERS supplement is subject to an earnings test, which can reduce your payments.

• Eligibility for Social Security: The FERS supplement ends at age 62 because that is the earliest age at which you become eligible to start receiving Social Security retirement benefits.

FERS Supplement Termination at Age 62

The FERS Special Retirement Supplement (SRS) is designed to approximate the Social Security benefits you have earned during your federal career, bridging the financial gap for those who retire before they are eligible to collect Social Security at age 62. This supplement is a temporary benefit and ends on the last day of the month before you turn 62. The supplement's purpose is to replace potential Social Security income until you reach the earliest eligibility age for Social Security. This termination occurs automatically at age 62, even if you do not apply for or receive Social Security benefits at that time.

The Transition to Social Security

When your FERS supplement ends at age 62, you will need a plan for replacing that income. You can choose to start receiving Social Security benefits at age 62 or delay claiming.

Option 1: Start Social Security at Age 62

Claiming Social Security at 62 can provide a continuous income stream after your FERS supplement stops. However, taking Social Security at this age results in a permanently reduced monthly benefit compared to waiting until your Full Retirement Age (FRA).

Option 2: Delay Your Social Security Claim

Delaying Social Security past age 62 can increase your monthly benefit for life. For every month you wait past 62 up to age 70, your benefit grows. This strategy requires using other savings, such as your Thrift Savings Plan (TSP), to cover the income gap between the end of your FERS supplement and when you begin receiving Social Security.

Comparing Your Social Security Options

Feature	Claiming Social Security at 62	Delaying Your Social Security Claim
FERS Supplement Replacement	Immediate, continuous income stream.	Significant income gap between FERS supplement and Social Security.
Monthly Benefit Amount	Permanently reduced from what you would receive at Full Retirement Age.	Larger monthly payments, which increase up to age 70.
Financial Bridge	Smooth financial transition, but at a cost.	Requires other savings (like TSP withdrawals) to bridge the income gap.
Break-Even Point	The best option for those with shorter life expectancies.	Long-term strategy; takes many years to break even and reap the larger payments.

Other Factors Affecting the FERS Supplement

Beyond turning 62, other situations can impact your FERS supplement, especially if you retire before that age and continue working.

The Social Security Earnings Test

If you receive the FERS supplement after reaching your Minimum Retirement Age (MRA) and continue to work, the Social Security earnings limit applies. For every $2 earned over the annual limit, your supplement is reduced by $1. This earnings test applies until you reach age 62.

Recent Legislative Changes

Legislation has been proposed that could affect the FERS supplement, such as eliminating it for future retirees. Staying informed about legislative changes is important. You can consult with a federal benefits expert or the Office of Personnel Management (OPM) for the most current information.

Conclusion

Understanding that your FERS supplement ends at age 62 is key to effective federal retirement planning. It serves as a temporary bridge to Social Security eligibility. By carefully considering your Social Security claiming options and other financial resources, you can successfully navigate this transition in your retirement income.

For more detailed information on FERS benefits and regulations, including the latest legislative updates, visit the official OPM website.

Frequently Asked Questions

Does my FERS supplement automatically convert into Social Security at age 62?

No. The FERS supplement ends at age 62, and you must file a separate application with the Social Security Administration to begin receiving your Social Security benefits.

Can I keep my FERS supplement if I don't apply for Social Security at 62?

No, you cannot. Your FERS annuity supplement will terminate at the end of the month before your 62nd birthday, regardless of your decision to postpone your Social Security application.

How is the FERS supplement affected by the Social Security earnings test?

The supplement is subject to the Social Security earnings test once you reach your Minimum Retirement Age (MRA). If you earn more than the annual limit, your supplement will be reduced.

What is the difference between my FERS supplement and my FERS annuity?

Your FERS annuity is your primary retirement pension, which you receive for life. The FERS supplement is a temporary benefit for early retirees that ends at age 62, replacing Social Security until you can claim it.

Are special category employees, like law enforcement, exempt from the FERS supplement ending at 62?

No. While special category employees can retire earlier, their FERS supplement is also subject to termination at age 62, similar to other FERS retirees.

Will my FERS supplement be reduced if I continue to work after retiring?

Yes, if you continue working after you reach your MRA, your FERS supplement can be reduced based on the Social Security earnings test.

Why would someone choose to delay Social Security past age 62 if their FERS supplement is ending?

Delaying Social Security allows your benefit to grow, resulting in higher monthly payments later in life. This strategy can maximize your lifetime benefits, but requires careful planning to cover the income gap from age 62 until you claim.