Category: FERS

Last verified: October 16, 2026, against the sources linked below. Written by Casey Steward.

The usual advice: leave after 5 years for similar private pay and it’s no big deal; leave at 25 years and you’d need maybe $20,000 a year more to break even. First, the good news: leaving early never means losing everything. Leave with 5+ years and no refund and you keep a deferred pension for life. The question is how much of the full-career package you give up, and what that costs in salary. Here’s the model, every assumption, and the numbers.

The short version

• You keep a pension. Leaving before your minimum retirement age (MRA) with 5+ years gives you a deferred annuity for life: in our example, $3,279/yr from 62 after 5 years, up to $29,612/yr from 60 after 25 years (OPM).
• You give up the bigger full-career annuity, the FERS supplement, and FEHB in retirement. The deferred annuity also uses a high-3 frozen at the day you leave.
• Extra pay needed, if you’d work to 62 either way: about 12% of salary if you leave at 5 years and 28% at 25 years (about $19,000 a year in 2027 dollars).
• If you’d retire at 57 either way, leaving at 25 years means replacing the lost value in just 5 years: about 86% of pay. That’s the cliff.

The hypothetical and the assumptions

One made-up employee, regular FERS, hired in 2027 at age 27, so the MRA of 57 arrives with exactly 30 years. Every number below is this person; yours will differ. Run your own in our FERS pension calculator.

Assumption	Value	Why
Starting salary	$60,000 (2027)	A round number
Raises	3% a year	Stated assumption, not a forecast
Discount rate and savings return	5% a year (sensitivity: 4% and 6%)	Same rate both ways, so the comparison is fair
Life expectancy	Payments to age 85	Simple planning horizon
COLA	2% a year from age 62	The FERS “diet COLA” gives 2% when inflation runs 2% to 3% (5 U.S.C. 8462(b))
FEHB value	Government share, Self Only, ages 57 to 65, growing 4% a year	2027 maximum government contribution is $352.04 biweekly × 26 = $9,153 a year (OPM premiums). We stop at 65 because Medicare takes over as primary; counting FEHB to 85 would make staying look even better.
FERS supplement	30/40 × an assumed age-62 Social Security benefit of 30% of the high-3, ages 57 to 62, no earnings-test reduction	OPM computes it as years of FERS service ÷ 40 × the estimated benefit (OPM). The 30% is our assumption.
Private job	Same pay path, no pension, 401(k) match equal to the TSP match, employer health coverage while working	So the only difference is the pension, supplement, and retiree FEHB
Inflation (for 2027-dollar figures only)	2.5% a year	Converts future dollars to today’s
Retirement age	Same for both paths: 57, or 62	Comparing someone who retires at 57 with someone who works to 62 isn’t fair to either

The model runs in nominal dollars; we convert the headline figures to 2027 dollars so they’re comparable with today’s pay. “Value at 57” means a lump sum at age 57 that would fund the same payments. Survivor reduction is ignored on both paths.

Staying to 57: the full-career benefit

High-3 at 57: the average of the last three salaries, $137,316 (see how the high-3 works). With 30 years at the MRA, this is an immediate, unreduced MRA+30 retirement (5 U.S.C. 8412(a)), at 1% because they’re under 62 (5 U.S.C. 8415; FERS pension calculation):

• Annuity: $137,316 × 30 × 1% = $41,195/yr. Present value at 57: $736,988.
• FERS supplement: 30/40 × (30% × $137,316) = $30,896/yr until 62 (5 U.S.C. 8421). Present value: $140,452.
• FEHB government share: $9,153 × 1.04³⁰ = $29,687 in the first year of retirement, ages 57 to 65. Present value: $229,728.
• Total: $1,107,168.

Leaving early: the deferred annuity

Leave before your MRA with 5+ years and no refund, and you get a deferred annuity based on the high-3 at separation, with no supplement and no FEHB or FEGLI re-enrollment (OPM; 5 U.S.C. 8413). With under 10 years it starts at 62; with 10+ it can start at the MRA, reduced 5% per year under 62; with 20+ it’s unreduced at 60. For each case we used the start age with the highest present value at 5%. The mechanics are in our guide to quitting at 45.

No COLAs accrue between leaving and the start date, and the high-3 is frozen, so a 2032 salary pays a 2062 pension. That’s the main COLA difference, and it’s already in the numbers. Both paths get the same diet COLA from 62.

The numbers: you keep, you give up

Retire at 57 either way. The stay path is worth $1,107,168 at 57 (about $528,000 in 2027 dollars). “Value lost” is that minus the value of what you keep.

Leave after	You keep (deferred annuity)	Value kept at 57	You give up (value at 57)	Extra pay to 57	First-year extra, 2027 $
5 yrs (age 32)	$3,279/yr from 62	$43,758	$1,063,410	19.3%	$11,838
10 yrs (age 37)	$5,702/yr from 57 (−25%)	$102,013	$1,005,155	25.0%	$15,766
15 yrs (age 42)	$9,915/yr from 57 (−25%)	$177,392	$929,776	33.8%	$21,806
20 yrs (age 47)	$20,435/yr from 60	$307,160	$800,008	47.4%	$31,354
25 yrs (age 52)	$29,612/yr from 60	$445,103	$662,065	85.7%	$58,059

The start age shown is the one worth the most at 5%. For the 25-year leaver: $29,612 unreduced at 60 is worth $445,103, beating a 25%-reduced start at 57 ($397,333) or waiting to 62 ($395,161). The annuity amount is frozen in the year you leave; it isn’t inflation-adjusted.

Work to 62 either way. This is the more realistic comparison for most people who leave at 47 or 52: they take another job, not a hammock. The stayer works to 62 with 35 years, which unlocks the 1.1% multiplier (62+ with 20 years at separation; 5 U.S.C. 8415): $159,186 × 35 × 1.1% = $61,287/yr from 62, with FEHB from 62 to 65 and no supplement (it’s only paid to people who retire before 62). Value at 62: $1,151,117.

Leave after	You keep	Value kept at 62	You give up (value at 62)	Extra pay to 62	First-year extra, 2027 $
5 yrs	$3,279/yr from 62	$55,848	$1,095,270	12.2%	$7,514
10 yrs	$5,702/yr from 57	$130,198	$1,020,920	15.2%	$9,569
15 yrs	$9,915/yr from 57	$226,402	$924,716	19.0%	$12,233
20 yrs	$20,435/yr from 60	$392,023	$759,095	22.5%	$14,875
25 yrs	$29,612/yr from 60	$568,077	$583,040	28.2%	$19,089

How “extra pay” is computed

The extra pay is a fixed share of a private salary that grows 3% a year, saved in a tax-deferred account earning 5% from the year after you leave until the shared retirement age. Required share = value given up ÷ the sum of each future salary grown at 5% to that age, minus 4.4%: the FERS contribution you stop paying (employees first hired after December 31, 2013: 10.6% minus the 6.2% Social Security tax rate; 5 U.S.C. 8422(a)(2) and (a)(3)(C); OPM BAL 14-102). The first-year dollar figure is that share of the first private salary, converted to 2027 dollars.

Example, 25 years, work to 62: $583,040 has to be built over 10 years. That’s 32.6% of pay, minus 4.4% = 28.2%, or $35,391 in the first year (2052 dollars), about $19,089 in 2027 dollars. Retire at 57 instead, and the same job has only 5 years to do it: 85.7%.

Sensitivity: discount rate

Leave after	To 57: 4% / 5% / 6%	To 62: 4% / 5% / 6%
5 years	24.6% / 19.3% / 14.9%	16.6% / 12.2% / 8.7%
10 years	30.7% / 25.0% / 20.3%	19.7% / 15.2% / 11.5%
15 years	39.7% / 33.8% / 28.7%	23.6% / 19.0% / 15.0%
20 years	53.5% / 47.4% / 42.2%	27.1% / 22.5% / 18.6%
25 years	92.4% / 85.7% / 79.8%	32.9% / 28.2% / 24.2%

Lower rates make a guaranteed pension worth more.

What the model leaves out

• Coming back. This assumes you never return. The redeposit and reinstatement rules from our quit-at-45 guide don’t apply here.
• Longer careers. Staying past 57 adds more: higher high-3, more years, and 1.1% if you’re 62+ with 20 years at separation (5 U.S.C. 8415).
• The supplement earnings test. If you’d work after retiring at 57, the supplement drops $1 for every $2 above Social Security’s exempt amount (OPM). Set it to zero and leaving at 25 years (retire at 57) needs about 65%, not 85%. The 30% Social Security assumption behind it is ours; use your SSA statement.
• Survivor reduction, sick leave credit, taxes, and job risk. All ignored. A pension can’t be laid off with you; a private salary can.
• Your Social Security. It’s earned either way, so it’s a wash.

FAQ

Is it worth staying in federal service for the pension?

It depends heavily on when you’d retire. If you’d work to 62 anyway, a raise of roughly 12% to 28% of pay (more the later you leave) covers it in our example. If you’d retire at your MRA, the last years are worth far more.

Do I lose my FERS pension if I leave early?

No. With 5+ years and no refund you keep a deferred annuity for life: $3,279 a year from 62 after 5 years in our example, $29,612 a year from 60 after 25 years.

Why does leaving at 25 years cost so much more if I retire at 57?

You give up less in total, but you only have 5 working years to replace it, and you lose the supplement and retiree FEHB that come with retiring at your MRA. Spread over 10 years to 62, the cost drops to about 28% of pay.

What discount rate should I use?

There’s no single right one. We show 4% to 6%. A lower rate (closer to safe bond yields) values a guaranteed, COLA-protected pension more.

Run your numbers: FERS pension calculator

Related: Quitting at 45 With 20 Years · How Your FERS Pension Is Calculated · How the High-3 Works

Run your own version: the Should I Leave Federal Service? calculator compares your pension and FERS supplement for leaving now vs. later. No login, nothing stored.

Sources

• OPM, Types of Retirement (Deferred, MRA+30, FERS Annuity Supplement, MRA table)
• OPM, FEHB premiums and 2027 government contribution
• 5 U.S.C. 8412, 8413, 8415, 8421, 8422(a)(3)(C), 8462
• OPM BAL 14-102, FERS-FRAE contribution rates
• Model: The High Three’s own calculations from the assumptions above.

Last verified: October 15, 2026, against the sources linked below. Written by Casey Steward.

“I have 20 years in, I’m 45, and I want out.” Short answer: you don’t lose the pension you’ve earned and you keep your TSP, but you lose more in health insurance than most people expect, and the pension is much smaller than if you stayed to your minimum retirement age (MRA). Here are the rules, the math, and the side-by-side comparison. This guide covers regular FERS employees, not special-provision employees (law enforcement, firefighters, air traffic controllers).

The short version

• Pension: With 5+ years and no refund taken, you get a deferred annuity. With 20 years it can start reduced at your MRA or unreduced at 60 (OPM).
• Amount: 1% × high-3 at separation × years. The high-3 is frozen, and the 1.1% multiplier is off the table because it requires being 62+ at separation (5 U.S.C. 8415(i)).
• No FERS supplement, no FEHB/FEGLI in retirement. Temporary Continuation of Coverage (TCC) bridges 18 months at full cost plus 2%.
• TSP: Yours to keep, but the age-55 penalty exception doesn’t apply when you leave at 45.
• Staying to 57 instead: 32 years, an immediate unreduced MRA+30 annuity of $30,400/yr in our example, plus FEHB, the supplement, and penalty-free TSP access. See the comparison.

Our hypothetical employee

Born in 1981, age 45, exactly 20 years of creditable civilian service under regular FERS, a high-3 of $95,000, married, never took a refund. Every number below uses this made-up person. Yours will differ.

Deferred vs. postponed: which one applies to you

	Deferred retirement	Postponed (MRA+10) retirement
Who	You separate before you’re eligible for an immediate annuity, e.g., before your MRA	You separate at or after your MRA with 10 to 29 years, and choose a later start date
Can re-enroll in FEHB/FEGLI when the annuity starts?	No	Yes, if you had coverage for the 5 years right before separation
FERS supplement	No	No

Our 45-year-old is nowhere near an MRA of 57, so they’re in the deferred column (OPM).

When a deferred annuity can start

You need at least 5 years of creditable civilian service, no eligibility for an immediate annuity, and no refund of your deductions (OPM; 5 U.S.C. 8413).

Service at separation	Earliest start	Age reduction?
5 to 9 years	Age 62	None
10 to 19 years	MRA (any date from MRA to 62)	5/12 of 1% per month under 62 (5% per year)
20 to 29 years	MRA	Same reduction if it starts before 60; none at 60 or later
30+ years	MRA	None

The reduction is waived if you’d meet an unreduced age/service combination (60 with 20, MRA with 30) at the start date (5 U.S.C. 8415(h)). Apply through OPM’s Online Retirement Application at least 60 days before you want payments to begin. Your MRA is 57 if you were born in 1970 or later, which includes anyone who is 45 in 2026 (OPM MRA table).

Worked example: quit at 45

The deferred annuity uses your service and high-3 at separation (OPM). Raises after you leave don’t count, and no COLAs accrue before the annuity starts; after that, regular FERS COLAs begin only at 62 (5 U.S.C. 8462). Base annuity: $95,000 × 20 × 1% = $19,000/yr.

Start age	Age reduction	Annual	Monthly
57 (MRA)	60 months × 5/12% = 25%	$14,250	$1,187.50
60	None (20 years at 60)	$19,000	$1,583.33
62	None (still 1%)	$19,000	$1,583.33

These are gross and before the survivor reduction: a married annuitant gets a full survivor annuity by default, which costs 10% unless the spouse gives notarized consent to less (OPM). Waiting from 60 to 62 gains nothing here; starting at 57 trades a permanent 25% cut for 3 extra years of checks.

What if you stay until 57?

Same employee, but they keep working to their MRA of 57: 32 years of service. We hold the high-3 at $95,000 to keep the comparison clean; 12 more years of raises would likely make it higher, so these numbers are conservative.

• Immediate, unreduced annuity. MRA with 30+ years is a voluntary immediate retirement with no age reduction (OPM; 5 U.S.C. 8412(a)). Under 62, the multiplier is still 1% (5 U.S.C. 8415(a)): $95,000 × 32 × 1% = $30,400/yr ($2,533.33/mo), or $27,360/yr ($2,280/mo) after the 10% full-survivor reduction. Unused sick leave would add to this; an immediate annuity credits it, a deferred one doesn’t (5 U.S.C. 8415(m)).
• FEHB and FEGLI continue into retirement if you had the coverage for the 5 years before retiring (5 U.S.C. 8905(b)).
• FERS supplement until 62. MRA+30 retirees get the annuity supplement, which ends no later than the month you turn 62 (5 U.S.C. 8421(a)). It approximates the Social Security benefit earned under FERS and is reduced $1 for every $2 you earn above Social Security’s annual exempt amount (OPM: FERS Annuity Supplement; 5 U.S.C. 8421a). The amount depends on your earnings record, so we don’t estimate it.
• COLAs start at 62 (5 U.S.C. 8462(c)(3)): the full CPI change if 2% or less, 2% if it’s 2% to 3%, and CPI minus 1 point above 3% (8462(b)). The first one is prorated by months retired (8462(c)(1)).
• TSP without the 10% penalty. Separating in or after the year you turn 55 lets you withdraw without the 10% early-withdrawal tax (income tax still applies) (TSP: Tax Rules about TSP Payments). Plus 12 more years of contributions and matching.

Quit at 45 vs. stay to 57

	Quit at 45, start at 57	Quit at 45, start at 60	Quit at 45, start at 62	Stay to 57 (32 years)
Type	Deferred	Deferred	Deferred	Immediate (MRA+30)
Age reduction	25%	None	None	None
Annual / monthly (before survivor)	$14,250 / $1,187.50	$19,000 / $1,583.33	$19,000 / $1,583.33	$30,400 / $2,533.33
Annual / monthly (full survivor, −10%)	$12,825 / $1,068.75	$17,100 / $1,425	$17,100 / $1,425	$27,360 / $2,280
FEHB/FEGLI in retirement	No	No	No	Yes (5-year rule)
FERS supplement	No	No	No	Yes, to 62 (earnings test)
Sick leave credit	No	No	No	Yes
TSP 10% penalty	Applies to withdrawals before 59½			Age-55 exception applies

The trade: 12 more years of work for a pension about 60% larger than the best deferred option, plus health insurance for life and the supplement. Run both before you resign.

Health and life insurance if you quit

“If you receive a deferred annuity, you are not eligible to reenroll in any health benefits, life insurance coverage, or dental and vision benefits” (OPM). After separation, TCC keeps FEHB for up to 18 months at the full premium plus 2%; enroll within 60 days (OPM: TCC; 5 U.S.C. 8905a). FEGLI ends at separation with a 31-day free extension and a right to convert to an individual policy (OPM: FEGLI).

Don’t take the refund

After 31 days you can request a refund of your own FERS deductions (SF 3106), but it “voids all annuity rights under FERS” (OPM FERS Refund Fact Sheet). Here that means giving up $19,000 a year for life from 60 in exchange for a small sum. If you return to FERS later, you can generally redeposit it with interest (OPM: Creditable Service).

TSP, leave, and coming back

• TSP: Keep it, roll it over, or withdraw (TSP: Leaving Federal Employment). At 20 years everything is vested (5 U.S.C. 8432(g)). Leaving at 45, withdrawals before 59½ generally owe the 10% penalty unless another IRS exception applies (TSP; IRS).
• TSP loans: Pay off or keep paying after you leave; a foreclosed loan is taxable and, at 45, penalized (TSP Loans).
• Leave: Annual leave is paid as a lump sum (5 U.S.C. 5551). Sick leave doesn’t count toward a deferred annuity but is generally recredited if you return (5 CFR 630.407).
• Coming back: Without a refund, your 20 years still count if you return, and career employees generally have reinstatement eligibility (5 CFR 315.401).
• Social Security: Your credits stay on your record (SSA).

Checklist before you quit

1. Confirm service and high-3 with HR; run both scenarios in our FERS pension calculator.
2. Compare leaving now with staying to your MRA (immediate annuity, or at least a postponed MRA+10 that keeps FEHB eligibility).
3. Line up health coverage: new employer plan, TCC (60-day window), or marketplace.
4. Don’t file the SF 3106 refund unless you’ve decided the annuity isn’t worth keeping.
5. Handle any TSP loan; keep your SF 50s and final LES for the OPM application, due 60+ days before your start date.

FAQ

Do I lose my FERS pension if I quit at 45?

No, with at least 5 years of creditable service and no refund, you get a deferred annuity. With 20 years it starts at your MRA (reduced 5% per year under 62) or unreduced at 60.

Can I keep FEHB with a deferred retirement?

No. You get up to 18 months of TCC at full cost plus 2%. Retiring on an immediate annuity, or a postponed MRA+10 after separating at or after your MRA, preserves FEHB if you had 5 years of coverage.

Do I get the 1.1% multiplier if my deferred annuity starts at 62?

No. It requires being 62 with 20 years at separation.

How much more would I get if I stayed to my MRA?

In our example (high-3 held at $95,000), staying to 57 with 32 years gives $30,400 a year unreduced versus at most $19,000 if you quit at 45, plus FEHB, the FERS supplement to 62, and penalty-free TSP access.

Run your numbers: FERS pension calculator · TSP growth calculator

Related: How Your FERS Pension Is Calculated · How the High-3 Works

See what your pension is worth if you leave early

Want your own numbers instead of our hypothetical? The Should I Leave Federal Service? calculator compares your plan with leaving now and with retiring at 62.

Sources

• OPM, Types of Retirement (Deferred, MRA+10, Postponed, Supplement, MRA table)
• OPM RI 90-8, FERS overview
• OPM, Creditable Service (redeposit); FERS Refund Fact Sheet; Temporary Continuation of Coverage
• 5 U.S.C. 8412, 8413, 8415, 8421, 8421a, 8432, 8462, 8905, 8905a, 5551
• eCFR: 5 CFR 315.401, 5 CFR 630.407
• TSP: Leaving Federal Employment; Tax Rules about TSP Payments; TSP Loans
• IRS, Exceptions to Tax on Early Distributions; SSA, Social Security Credits