The FERS Annuity Supplement Calculator is a tool that helps federal employees estimate their potential Special Retirement Supplement (SRS). This supplement is a unique benefit for FERS employees who retire before age 62. It bridges the income gap until they become eligible for Social Security benefits.
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What is the FERS Supplement ?
The FERS Supplement, also known as the Special Retirement Supplement (SRS), is a monthly payment provided to eligible federal employees who retire under the Federal Employees Retirement System (FERS) before age 62.
This supplement serves as a temporary bridge to Social Security benefits, covering the gap until the retiree becomes eligible at age 62. The amount is calculated based on the retiree’s projected Social Security benefit at age 62 and ends once they reach that age.
How To Calculate Federal Retirement Pension?
To project the supplement amount, enter the following information:
1. Years of Service
Only enter your current years of service. You can add months with decimal points. For example, 20 years and 6 months = 20.5 years
2. Estimated Social Security
The project monthly benefit for your Social Security at Age 62 when you retire.
Example of FERS Annuity Supplement
The FERS Annuity Supplement is a unique benefit for federal employees who retire before age 62. It helps bridge the gap between your FERS annuity and your Social Security benefits, which start at age 62.
Here's a simple example:
Let's say you retire at age 57 with 30 years of FERS service. Your estimated Social Security benefit at age 62 is $2,000 per month.
To calculate your FERS Supplement:
Determine your FERS fraction:
Divide your years of service (30) by 40: 30/40 = 0.75
Multiply your FERS fraction by your estimated Social Security benefit:
0.75 * $2,000 = $1,500
So, in this example, you would receive a FERS Supplement of $1,500 per month from your retirement date until you turn 62.
Reduction in FERS Supplement
Here’s How the Reduction Works
Let’s go back to our example with Jane. Say Jane gets a part-time job after her federal retirement. That job pays her $30,000 a year, which is $12,360 over the income limit.
Half of $12,360 is $6,180, which is her annual reduction. Divide that by 12, and we get a reduction $515 a month.
Earlier, we estimated Jane’s Supplement to be $900 a month. Once we factor in her reduction, we see that Jane’s Supplement will really be closer to $385 a month.
What are the key features of the FERS annuity supplement?
- Purpose: The FERS Supplement aims to bridge the financial gap between early retirement and eligibility for Social Security benefits at age 62.
- Calculation: The supplement is determined using a formula that takes into account the retiree's years of federal service and their estimated Social Security earnings at age 62.
- Eligibility: The supplement ends on the earlier of the following: the last day of the month before the retiree becomes eligible for Social Security benefits or the last day of the month in which they turn 62.
- Earnings Test: The FERS Supplement is subject to an earnings test similar to Social Security. If a retiree's earnings exceed the exempt amount for the year, the supplement is reduced. In 2024, the exempt amount is $22,320.
- Cost-of-Living Adjustments (COLA): Unlike the basic FERS annuity, the FERS Supplement does not receive cost-of-living adjustments. This means the benefit amount remains fixed, regardless of inflation.
What are the eligibility requirements for the FERS annuity supplement?
To be eligible for the FERS Special Annuity Supplement, a retiring employee must meet one of the following age and service requirements:
Option 1:
- Minimum Retirement Age (MRA) + 30 years of service.
- The MRA varies depending on your year of birth. You can find a table of MRA ages on the OPM website or consult with a retirement counselor.
- You must have at least 30 years of creditable FERS service.
Option 2:
- Age 60 + 20 years of service.
- You must be at least 60 years old.
- You must have at least 20 years of creditable FERS service.