Retirement can be hard to plan for anyone. Federal employees are no exception. Considering the savings and income you must gather to retire without long-term concerns, the goal might seem impossible.
Remember that figuring out the perfect retirement age is even harder for federal employees. Most of the hurdles involve navigating the policies and consequences of certain decisions.
The Impact of Early Retirement
The retirement age makes a huge difference if you are a federal employee. In fact, retiring in your 50s can significantly impact your pension more than if you were to retire in your 60s.
Federal employees must have at least twenty years of service to be eligible. With less than twenty years of service, you might not qualify for a pension in your 50s. You might have to wait until you are at least 62.
Deciding to retire at 61 or waiting a year until 62 can greatly impact your pension. A person who retires at 61 with twenty-three years of service versus one who retires at 62 with the same years will have different pensions.
At 62 years, you can be eligible for a 1.1% multiplier that increases the pension. Below 61, you only get a 1.0% multiplier which doesn’t amount to a lot. This means it isn’t realistically possible for federal employees to retire in their 50s if they are looking for better benefits.
The Hurdles to Retiring in Your 50s
As a federal employee trying to retire in your 50s, you’ve already met many minimum requirements. At 62, you can retire with five years of service. At 60, it is possible to retire with twenty years of service.
However, you must contribute at least thirty years of service at your minimum retirement age (55-57 depending on your birth year). Moreover, retiring at the minimum retirement age with less than thirty years of service will reduce benefits.
Remember, you might want to leave as soon as you can. However, your benefits will take a hit if you aren’t careful.
Planning that retirement can lead to a lot more benefits than before. For example, if you plan to retire when you are 50 with 30 years of service, holding it off for seven more years will qualify you for all your benefits. It is essential to plan carefully.
Final Thoughts
Federal employees can retire in their 50s. However, it might not be realistic as most of their benefits may be nullified. It is smarter to wait for the right time and retire when you can get all the benefits.
However, in case you want to retire early, there are certain loopholes that you can use. You need an experienced professional to guide you through the process and help you achieve your deserved benefits.
You can still achieve retirement in your 50s without letting go of most of your benefits! Contact the Federal Educators at (813) 755-7037 today and get one step closer to early retirement.
