The Special Retirement Supplement for Feds who retire before 62
For eligible FERS* workers who retire prior to reaching the age of 62, there is an added level to social security they may need to consider. The Special Retirement Supplement (SRS) is a program that borrows some features from social security, but despite a prominent misconception, it is not paid or administered by the Social Security Administration in any form. The Office of Personnel Management handles all of the operational procedures involved with the SRS.
Here’s how it works: a FERS employee with 30 years of service is eligible to retire at their minimum retirement age (MRA), which is between 55 and 57, depending on the year of birth (very similar to social security’s “full retirement age”). Because 62 is the youngest someone can be before withdrawing their own social security benefits, the SRS acts as a bridge for those who leave service before then. The extra benefit ends once the retiree reaches 62, though, whether or not they elect to start or delay receiving the usual social security withdrawals at that time. Unlike normal Social Security benefits, there are no COLAs for the SRS, but there is an earnings test. So if the retiree starts a job outside of the Federal Government, their payment might be reduced or nonexistent depending on the amount of earned income they’re receiving.
Additional guidelines apply for specific classes of federal employees such as law enforcement officers and firefighters, who are usually subject to mandatory retirements before turning 60. When Trump took office, there was escalated talk of eliminating the SRS altogether. While an argument can be made that if a given retiree absolutely needs the money, they should just stay in service longer, the mandatory retirements imposed on some Federal workers, like Air Traffic Controllers, limit the breadth of such a debate. The SRS can be a vital component to the cash flow of a federal employee, who left service because regulations impose a mandated retirement before Social Security payments can be taken.
Until Next Time,
**Written by Benjamin Derge, Financial Planner. 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 Benjamin Derge and not necessarily those of RJFS or Raymond James. Links are being provided for information purposes only. Expressions of opinion are as of this date and are subject to change without notice. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors.
The Special Retirement Supplement for FERS