Eligibility for CSRS Retirement
Most federal employees covered by the Civil Service Retirement System (CSRS) are likely to be eligible for retirement, and probably have been for quite some time. Due to the current changes in the government, it is important to understand the rules and regulations that regarding your eligibility for retirement.
Immediate annuity – CSRS
You can retire on an unreduced, immediate annuity with the following age and years of service combinations:
- Age 55 – 30 years of service
- Age 60 – 20 years of service
- Age 62 – 5 years of service
If your organization offers early retirement through VERA (Voluntary Early Retirement Authority), you can retire with any of the following age and years of service combinations:
- Any age – 25 years of service
- Age 50 -20 years of service
No matter the age at which you retire, you are eligible to receive cost of living adjustments that are added to the annuities of CSRS retirees.
If you retire before you reach the age of 55, the law states that there will be a 2% reduction of your annuity for every year till you reach the age of 55. Many CSRS retirees would not currently be bound by this rule.
Instant annuity – CSRS Offset
The age and service requirements for CSRS employees and that of CSRS offset employees are the same except for the difference in the annuity payment. By the time you are 62, or if you retire later, there will be a reduction of your CSRS annuity by the total Social Security benefits earned over the course of time that you were a CSRS employee. Whether you applied for a Social Security benefit or not the reduction will still be made, so it’s advisable that you apply for it at the age of 62, or at retirement (if later).
if you are not yet eligible for retirement on an immediate annuity, but ready to leave employment, then you can have your annuity deferred. The criteria for deferred annuity includes the following age and service combinations:
- Age 62 with 5 years of service
- Age 60 with 20 years of service
- Age 55 with 30 years of service
At least 5 years of service is required for eligibility.
For a CSRS Offset employee, the reduction of your CSRS annuity to offset Social Security benefits is the same as that stated under Instant annuity – CSRS Offset.
Health benefits and life insurance
If your retirement is based on an immediate unreduced annuity, your FEGLI and FEHB coverage can be extended until retirement, but if you retire before you’re eligible for an immediate annuity, your coverage expires after a free extension of 31 days. After that you choose to fund the expenses of your health benefits coverage with a 2% increase for up to 18 months or subscribe for the individual life insurance package (funded by you).
However, if you do apply to have your annuity deferred then you will not be eligible to enroll for FEGLI or FEHB programs.
For more information regarding retirement options, it’s best to seek advice from your financial professional.