What is MRA+10 and how can federal employees access this option?
“If you are a federal employee covered by FERS who needs or wants to retire earlier than planned, MRA 10+ may be an option. MRA + 10 allows Feds who have met minimum age requirements and have at least ten years of service to retire sooner than expected.” Brian Swerdlow
Federal employees under the Federal Employees Retirement System (FERS) have numerous types of retirement available to them. One of these, MRA+10, lets government employees retire at their minimum retirement age (MRA) with as little as ten years of service.
Who is eligible for MRA+10?
To access the MRA+10 option:
• You must be a FERS-covered employee
• You contribute a portion of your gross salary to the FERS Retirement and Disability Fund every pay period. (Your contribution to the fund will be 0.8, 3.1, or 4.4% of your salary).
• You’ve attained at least your minimum retirement age (MRA) but are younger than 62.
• You are required to have at least ten years of creditable service but fewer than thirty years.
• At least five years of the minimum ten years’ service must be FERS-covered. The balance may be “bought-back” military service.
How do I determine my MRA?
MRA+10, as with other forms of federal retirement, has unique eligibility criteria, benefits, and pros and cons. To choose this option, you must have reached FERS minimum retirement age based on your birth year.
The chart below will help you find your MRA.
Birth Year Minimum Retirement Age
Before 1948 55
1948 55 and 2 months
1949 55 and 4 months
1950 55 and 6 months
1951 55 and 8 months
1952 55 and 10 months
1953 through 1964 56
1965 56 and 2 months
1966 56 and 4 months
1967 56 and 6 months
1968 56 and 8 months
1969 56 and 10 months
After 1969 57
When you retire under the MRA+10 provision, your annuity benefit is calculated using the standard formula: 0.01 x your high-3 x your years and full months of service.
Unfortunately, early retirement comes with a price tag. By choosing to retire early, you’ll get less money. Your annuity is reduced by 5/12 of 1 percent every month you are under 62. That adds up to a significant 5% annually! Losing even 1% per year could create economic hardship for many people.
It is, however, possible to reduce or eliminate that penalty. You could still retire but defer receipt of your pension to a later date. This strategy only makes sense if you are in an excellent financial situation and won’t have to wait too long to get an annuity that isn’t reduced. You will not be entitled to the special retirement you get when retiring at 62. However, you will receive any Social Security benefits you earned, whether under FERS or working on other jobs.
More on postponing your pension
If you determine that you are eligible for MRA+ and wish to pursue this option, you must first inform your agency that you intend to leave federal service. When you leave, your agency will complete Form SF 3103 (Register of Separations and Transfers). At least one month after leaving service, you must complete and submit RI 92-12, the Application for Deferred or Postponed Retirement and mail it to OPM’s Retirement Office.
After receiving your application, the OPM computes your FERS annuity. OPM bases this computation on your total years of service, including your actual FERS service and any bought-back military. The calculation also includes any service time for which FICA taxes and reduced CSRS contributions were taken through payroll deductions and not refunded and any temporary time that you may have accrued before Jan 1, 1989, and for which you made a full deposit. Also, for computing your FERS annuity, OPM includes any unused sick leave at the time of leaving service and your high-three average salary.
Pros and cons of MRA+10
Feds typically choose an MRA+10 retirement for its primary benefit: the ability to get a pension right away, assuming you don’t decide to postpone it.
Other benefits include:
• FEHB Health Insurance
• FEGLI Life Insurance
Possible downside:
• Your pension will be reduced.
• You will not receive the FERS Supplement
Summing it up:
If you are considering early retirement from federal service via MRA+10, you must allow yourself enough time to crunch numbers and do the necessary research. You and your financial advisor will want to run various scenarios to ensure that MRA+10 or any other retirement you choose makes good economic sense. Also, you want to be honest about your expectations and goals. Are you prepared for the psychological and emotional challenges of early retirement? Will retiring impact your lifestyle in unintended ways? Do you have plans for what you’ll do with your time once you’ve left service? Understanding your government benefits is a complicated process. Before making any decisions about your federal benefits, you should connect with an advisor with the specialized training, tools, and skills to advise you properly.
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