Federal employees weighing retirement in 2025 face a tough decision. Do you leave at your minimum retirement age (MRA) and take the FERS Supplement until 62, or do you push through to 62 or later and secure the permanent 1.1% pension multiplier — a 10% lifetime boost?
The choice isn’t abstract. Many Feds this year are looking at RIFs, reorganizations, or plain burnout. While working until 62 has clear advantages, not everyone will be able or willing to stay. Understanding the trade-offs helps you make a decision that fits both your finances and your reality.
Who Qualifies for the FERS Supplement
The FERS Supplement acts like a Social Security bridge. It’s payable to those who retire under an immediate, unreduced pension: MRA with 30 years, or age 60/61 with 20 years. Early retirement programs, like Voluntary Early Retirement Authority (VERA) or reduction-in-force (RIF) separations, may also qualify once you reach MRA.
On the other hand, the supplement does not apply if you retire under MRA+10, disability retirement, or a deferred pension. And remember, payments stop the month before you turn 62, regardless of when you file for Social Security.
The 2025 Earnings Test (Know the Limits)
The supplement is subject to an earnings test, just like Social Security. In 2025, the threshold is $23,400. Earn more than that from wages or self-employment, and your supplement drops by $1 for every $2 over the limit. The higher “final year” limit of $62,160 applies only in the calendar year you reach your Social Security full retirement age.
This means part-time work or post-federal consulting could shrink your benefit. Run the numbers before you count on the supplement as a steady bridge.
The 10% Pension Multiplier at 62+ (Why Waiting Can Pay)
Here’s where patience can really pay off. If you retire at age 62 or later with at least 20 years of service, your pension multiplier jumps from 1.0% to 1.1%. That “bonus” may sound small, but it increases your base annuity and any survivor benefit by 10% for life.
This higher benefit also starts receiving cost-of-living adjustments (COLAs) immediately at 62. By contrast, the FERS Supplement never receives COLAs. For those who can hold out, this difference compounds over decades.
Using the FERS 1.1% multiplier at 62 as part of your calculations can highlight how much stronger your long-term income picture looks when compared with leaving earlier.
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Quick Comparison — MRA Retirement vs Waiting to 62
Retiring at your MRA offers flexibility. You can leave federal service earlier, tap the FERS Supplement, and bridge to Social Security. But you must respect the earnings test and accept that the supplement vanishes at 62.
Waiting until 62 or beyond trades those early years of freedom for a stronger pension base. The MRA retirement vs waiting to 62 comparison isn’t about better or worse — it’s about which option aligns with your needs.
Action Steps Before You Decide
Before locking in your retirement date, it helps to run through a few practical checks. We believe taking these steps now can clarify which option truly supports your long-term plans.
- Confirm your creditable service and eligibility rules.
- Model both scenarios: MRA with supplement vs. 62+ with the 1.1% multiplier.
- Stress-test cash flow under the 2025 earnings test.
- Coordinate the timing with your Thrift Savings Plan(TSP) withdrawals and Social Security filing.
Working through these details can help put you in a stronger position to choose the retirement path that matches both your financial security and your confidence.
Making the Timing Work for Your Life
At the end of the day, either path can work. If you can’t stay to 62, the FERS Supplement still provides a meaningful bridge. If you can work longer, the 1.1% multiplier builds lifetime security. What matters most is aligning your retirement timing with your cash-flow needs, risk tolerance, and long-term goals.
Reach out to the team at Serving Those Who Serve at [email protected] for a personalized run-through. A CERTIFIED FINANCIAL PLANNER™ (CFP®) can help you see how the math plays out in your situation, because the right answer isn’t just about the numbers — it’s about your life.
The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Serving Those Who Serve writers and not necessarily those of RJFS or Raymond James. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy suggested. Every investor’s situation is unique and you should consider your investment goals, risk tolerance, and time horizon before making any investment or financial decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. **
