Would You Want To Retire Under MRA+10? by Joe Carreno
For federal workers under the Federal Employees’ Retirement System (FERS) that wish to go into retirement but are not able to receive an immediate annuity that is not reduced may have another way with the MRA+10 provision by Joe Carreno.
FERS workers that are at least the minimum retirement age (MRA) can hang up their hats if they have a minimum of 10 years worked, but less than 30 under the MRA+10.
As per Joe Carreno those that have a birth year before 1948 will have a minimum retirement age of 55. Each year from 1948 will have two months added for each year until 1952. Individuals born from 1953 to 1964 will have an MRA of 56. Anyone with the birth year of 1965 or later will see an increase of 2 months for each additional year until the minimum reaches 57 for people born in 1970 and on.
In regard to the ten years of work, this can be a mix of any creditable service as long a deposit was put into such as FERS or CSRS (Civil Service Retirement System), active duty military service, and more.
Though it may be good news to hear that you can retire with less than 30 years of creditable service, there is a snag. Those that retire under the MRA+10 will have their annuity payments lessened by 5% for each year that you are under 62 years of age.
This reduction can be lessened or avoided by delaying receiving your annuity until much later. For individuals that have a minimum of 20 years worked will be able to receive their annuity payments at 60 without the penalty.
So how is the annuity for someone under the MRA+10 provision calculated? By using the following calculation:
.01 x your high-3 x years and full months of creditable service. Joe Carreno said but remember that you will be facing a reduction based on when you start receiving your annuity payments.
If you retire under MRA+10, you will not be qualified to receive a special retirement supplement. Also, you will not receive a COLA (cost-of-living adjustment) until the age of 62.
For workers that have had FEGLI (Federal Employees’ Group Life Insurance) and/or FEHB (Federal Employees’ Health Benefits) for at least five years straight when you claim retirement, you will be able to carry those benefits over into retirement without a gap in your coverage if you start receiving your annuity as soon as possible as per described by Joe Carreno.
If you do not start your annuity immediately, the benefits will stop after 31 days of coverage that is premium-free. Once you start getting your annuity payments, you will be eligible to enroll once again into these benefit programs.