FERS deferred retirement in 2026: what you keep when you leave before retirement age
You resign or move to the private sector before you can retire. Your FERS service still buys an annuity later. Set the age you leave, your years and the age the annuity starts.
Deferred annuity, from age 62
$1,125/mo
$13,500 a year.
| Basic annuity (15 years counted) | $13,500 |
| Your MRA | 57 |
Deferred: you leave with 5 years or more, the annuity starts later · 1 %. Social Security at 62 estimated at $1,386/mo from your high-3; type your SSA figure for a better supplement.
Prepared by Radif Partners · How the figures are built · read on opm.gov, ecfr.gov and ssa.gov · not an official determination
A FERS deferred annuity is the pension you keep when you leave federal service before you are eligible to retire, under 5 U.S.C. 8413. With at least 5 years of creditable service, it starts at 62. With at least 10 years, you can ask for it as early as your minimum retirement age, but it is then reduced by five-twelfths of 1 % for each month under 62, 5 % a year, unless you would have 30 years at the MRA or 20 years at 60 when it begins. A worker born in 1980 who leaves at 40 with 15 years and a $90,000 high-3 gets $13,500 a year from 62, or $10,125 from the MRA of 57, 25 % less. A deferred annuity uses the 1 % multiplier, carries no FERS supplement, no credit for unused sick leave and no COLA before 62, and in general you cannot return to FEHB health coverage through it. Taking a refund of contributions instead cancels the annuity for that service.
Two rules in section 8413
Section 8413 of title 5 covers employees who are separated, or transferred to a position outside FERS, before they qualify for an immediate retirement. Paragraph (a) gives anyone with 5 years of service an annuity beginning at 62. Paragraph (b) gives an employee with 10 years who leaves before the MRA the option of a written election to start the annuity at the MRA or at any later date before 62. A worker who leaves after reaching the MRA with 10 years is not deferred: that is an MRA+10 retirement, with its own rules.
The annuity is not automatic: you apply to OPM for it. The amount is computed from your federal record alone: your high-3 from your years in service, your creditable service and the 1 % multiplier. The 1.1 % rate is for employees who retire under section 8412 at 62 or later with 20 years, so it does not apply to a deferred annuity.
The reduction under 62 and when it disappears
An annuity started under paragraph (b) before 62 is reduced by five-twelfths of 1 % for every full month between its start and your 62nd birthday, as written in section 8415(h). The same paragraph lists an exception: no reduction if, on the start date, your age and service would satisfy an unreduced retirement under section 8412(a) or (b). In practice, that is 20 years of service with an annuity starting at 60 or later, or 30 years with an annuity starting at the MRA or later.
| Leaves at | Service | Starts at | Reduction | Annuity per year |
|---|---|---|---|---|
| 40 | 15 years | 57 | 25 % | $10,125 |
| 40 | 15 years | 60 | 10 % | $12,150 |
| 40 | 15 years | 62 | 0 % | $13,500 |
| 45 | 20 years | 57 | 25 % | $13,500 |
| 45 | 20 years | 60 | 0 % | $18,000 |
| 35 | 8 years | 62 | 0 % | $7,200 |
The choice is a trade. In the first case, starting at the MRA gives $10,125 a year for five more years than waiting, but the cut is permanent. Waiting to 62 raises the annuity by $3,375 a year. Five years of the reduced annuity add up to about $50,625, which the higher annuity takes roughly 15 years to recover, ignoring COLAs and taxes.
Your deferred annuity
Deferred annuity, from age 62
$1,125/mo
| Basic annuity (15 years counted) | $13,500 |
| Your MRA | 57 |
What a deferred annuity does not include
Four things that come with an immediate retirement are missing. The FERS supplement is paid only to immediate retirements and early outs, so a deferred annuitant who starts at the MRA has no bridge to Social Security. Unused sick leave is not credited. The COLA follows the age 62 rule, since section 8413 annuities are among those it covers. Health insurance is the fourth: OPM's FEHB guidance for annuitants says individuals generally are not eligible for FEHB when receiving a deferred annuity, and a surviving spouse is not eligible as a survivor annuitant even if covered as an employee.
Refund or deferred annuity
When you leave, you can also ask for the lump-sum credit, built from the retirement deductions withheld from your pay. Section 8424 allows it once you have been separated for at least 31 consecutive days, are not back in a FERS job and will not become eligible for an annuity within 31 days. The price is stated in the statute: payment voids all annuity rights based on that service until you are reemployed under FERS. Your spouse and any former spouse are notified, and a court order can block the payment.
The comparison is rarely close for anyone with 10 years or more. An employee hired in 2014 or later contributes 4.4 % of basic pay; the annuity those deductions help fund is worth many times that sum. A refund mostly makes sense with fewer than 5 years, when there is no annuity at all, or when you need the money now and accept losing the pension. Your TSP account is a separate matter, not part of this choice.
If you come back
Returning to a FERS position puts you back in the system. Your earlier service counts toward retirement again, and if you leave a second time, eligibility and the annuity are computed on the whole career. A worker who left at 40 with 15 years and returns for 15 more can retire at the MRA with 30 years, with an immediate unreduced annuity, the supplement and the sick leave credit. The FERS retirement calculator computes any combination of age and service.
Planning the start date
Write down three dates before you resign: your MRA, your 60th birthday if you will have 20 years, and your 62nd birthday. The annuity cannot start before the first, is unreduced from the second with 20 years, and is unreduced for everyone from the third. Keep a copy of your last SF-50 and your leave and earnings statements; OPM will rebuild your record from them when you apply years later.